Page 170 - Budgeting for Managers

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Budgeting and

Human Resources

ompanies manage payroll and human resources differently.
CSome organizations have corporate control of payroll and
managers control only the expense budget. Others use depart-
mental control, giving managers control over the human
resource budget of their team. In recent years, the situation has
been made more complicated by the use of long-term consult-
ants to replace full-time staff. Money for these consulting servic-
es is an expense to the corporation, but the work is ongoing
production work identical to what employees would do. Payroll
and human resource management are handled by the vendor or
subcontractor, not the corporation using the staff. This kind of
contractor is often referred to as a “body shop,” because it pro-
vides bodies—people to do the work—and the company that
hires it manages the workers.
When companies use body shops, we end up with three
major expense categories: payroll, general expenses, and con-
sulting (body shop) services. The consulting services may be
under corporate control or under departmental control. If con-

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