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Challenges for HR Planning & Monitoring

Jul. 28 2015 by Vincent Salmon, VP, Services & Presales - CCH Tagetik France

Performance Management Budgeting & Planning

The control and the monitoring of salaries in the P&L are a key point in driving an organization.

Indeed in added value the part of salaries is important (in 60 to 90% depending on industry) and it can have a big impact on financial performance if business activities fluctuate.

The decisions that are made in terms of remuneration or hires have an impact over several years and organizations are very sensitive to this. In addition, the regulatory obligations (like sustainability) require organizations to have an appropriate and proper communication on this.

Control and understanding of payroll can be a difficult task. There are multiple factors such as changes in departures and arrivals, changes in the organization, the increase or decrease in activity, changes in salary scales and the annual negotiations with trade unions. These tasks are performed by two different functions, human resources and Finance, none of the two functions have the complete information in order to make a complete and accurate analysis and forecasts. Furthermore the reconciliation of the HR and finance data is difficult because they rely on different systems and repositories.

The HR tools to manage payroll of employees are often used to provide analysis for the function of payroll and can also assist in making projections. Unfortunately these analysis and projections are often limited because they do not provide "analytical view" in connection with the activity of the organization. The tools of the financial management team has others problems: they show an accounting view of salaries and it is not easy to analyze and forecast with this limited information.

If a CEO asks the CFO and HRD to provide their payroll projection, it is likely that there are differences and that the data are not reconcilable.

To analyze and plan the payroll, it is necessary to "cross" and ensure consistency between the data from the human resources department and those of the Finance department. The adoption of a common language between the CFO and HRD is crucial in order to forecast all the changes and understand the possible differences.

During the budget process, for example the finance control is able to bring a vision to the FTE needs under the assumptions of activities.

This information is valuable for the HRD who will be able to prepare his plans for hiring and give more accurate forecasts. In the same way the human resources team is able to give varying elements of payroll to the Finance team following negotiations with the social partners or regulatory developments.

Choosing an IT solution to control staffing and payroll requires:

  • to ensure consistency between HR and Finance data (vision "payroll" and vision "accounting")
  • align analysis and forecasts of the HR and Finance processes;
  • to identify the needs of corporate management and managers in terms of workforce management and payroll.

The formalization of these steps is a key success factor for implementing one or more solutions.

Tagetik for unified, budgeting and forecasting

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