Page 183 - Budgeting for Managers

Budgeting for Managers
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salary figures are preplanned, there will usually be very little
variance. However, three things can lead to major variances:
• Unfilled positions. If a job was vacant for a period of
time, then less money was spent than budgeted.
• New hires at higher or lower cost. When you fill a posi-
tion, you may find that you need to pay more than you
expected. You may be offering a higher salary to get a
good person, a one-time payment to support relocation,
or a bonus to the employee who recommended this per-
son. Or, in some cases, a new employee may cost less
than expected.
• Changes in benefits and benefit packages. Changes in
benefits, especially medical plans, are common these
days. You need to identify what those changes are and
how they affect your HR budget.
In looking at a variance report for HR, be sure to check
whether the difference between estimated and actual is the
result of one-time events (such as an unfilled position or a relo-
cation bonus) or permanent changes that will affect future
budgets (such as a higher salary for a position or a change in
benefits). That will help you plan next year’s HR budget.

Manager’s Checklist for Chapter 10
❏ Who makes HR decisions for your team? Do you have
departmental control?
❏ Do you use a body shop or outsourced services? If so, do
you manage the budget for that service? If not you, then
who?
❏ Do you need to be able to lobby for changes to the HR
budget or the budget for consulting, body shop, or out-
sourced services?
❏ Can you explain your pay stub? Can you explain the pay
stub of everyone on your team? If you have some profes-
sional staff and some union employees, can you explain
both types of pay stubs?