Include seasonal labor in the budget
Description
Including seasonal labor in the budgeting component of Corporate Performance Management (CPM) software enables businesses to accurately plan and manage finances related to fluctuating workforce requirements. This requirement is particularly applicable in retail and distribution industries where staffing needs change according to the season.
Example Use Case
Scenario: A retail company operates with variable manpower requirements based on different seasons. During the holiday season, it usually hires additional temporary workers to manage increased demand. However, planning and budgeting for this fluctuating workforce becomes challenging with the standard capacities of its current CPM software.
Solution: Implementing a CPM system that allows for the inclusion of seasonal labor in the budget. This functions by adding labor by function, allocating more labor based on seasonal trends, down to specific locations. This allows the business to better predict expenses during busy season, and more accurately forecasts margins during this time.
Considerations
These models usually do not plan for staff by name. They operate more as a demand-focused workforce model, meaning that seasonal labor expenses are calculated based on a specific driver. That driver could be unit sales, a sales metric, customer volume per location, and so on. It is highly dependent on the type of industry.
Questions to Ask a Vendor
- Calculation Flexibility: How does your system accommodate variations in workforce numbers, like seasonal labor increases? Can those be adjusted with different predictive methods?
- Data Integration: Can we create different seasonal workforce scenarios in conjunction with our seasonal sales models, all in one model that rolls up to a P&L for comparative analysis?
- Real-time Adaptability: How easily can the system adjust the budget for seasonal labor based on real-time performance data?