When a services firm lays out the costs that it incurs over the financial year, the one cost that dominates and overshadows the rest of them, are the compensation costs for its workforce. Compensation is a rather crafty eel to handle. The firm can try to simplify a lot of the calculations by using average salary figures, across grades and then calculating the final cost based on the planned headcount. While this might suffice for an up and coming business, with a limited range of operations and the headcount that goes with it; it most definitely will not work for a larger firm trying to navigate the treacherous waters of adequate staffing for prospective projects and spiralling costs.
The need to be able to maintain a fighting force that is lean and yet effective, is one that has ailed organisations of all kinds through the centuries. How do you scale up quickly when a deluge of work is apparent? Having scaled up, are there clear indications and understandings of the cost involved? A simple illustration would be to consider a firm which deploys workforce across multiple geographies. The list of factors that then need to considered make for a daunting list:
- Head count planning (to determine the number of resources to deploy for the engagement)
- Grade(s) of the employees deployed (based on skill, experience and hopefully, wisdom they bring to the table)
- Start and End date of contracts for the employees engaged (needs to take into consideration the timelines of the engagement at hand)
- Bonuses to be paid out (based on the salary, grade, KPIs pertinent to type of project, revenue forecasted for the project, SBU and firm)
- Benefits (which might include perquisites, health cover, pension contribution etc. which are calculated on the basis of the all the factors listed earlier)
- Increment values, for subsequent periods (based on either a simple annual cycle, or staggered across quarters)
To try and incorporate all of these when calculating the total compensation package, can prove to be nerve wracking. And to have to recalculate the figures multiple times during a what-if scenario analysis exercise, positively excruciating. And if one considers a firm specialising in outsourced business processes, where the margins are wafer thin, the need to be exact with the calculations is paramount.
It is quite simple to understand, then, the torturous processes that planners need to go through before they can arrive at the appropriate figures for the compensation costs, especially when they use traditional tools like spreadsheets. Multiple drivers and results only add to the clutter that can cloud judgement all too easily.
Adaptive Insights addresses these issues with methods and functionalities which are not only easy to implement, but extremely intuitive to use. The platform allows for compensation drivers to be planned centrally and cohesively, after which they are available to be used across the various projects, geographies, verticals and service offerings that the firm would like to take into consideration. Adaptive Planning’s easy to write, understand and maintain business rules make it simple to incorporate these drivers into the compensation calculations, no matter how complex. With operators spanning from mathematical to time based, building logic for calculating headcount is a cinch. The platform also enforces role based access to compensation data across functions.
With Adaptive Insights, the planners can not only incorporate the vast myriad of variables that are taken into consideration, but also factor in business logic which triggers automatic calculations instantaneously. Most importantly, operational aspects such the headcount, driven by staffing requirements can be delegated to the appropriate stakeholders, giving them the opportunity to analyse various staffing mixes. Simple, quick and intuitive; what more can one ask for when planning?