HR Admin
Plan headcount and salary budgets, and test what-if scenarios
Set a headcount target and salary budget per department for the year, compare them with actual staff and salary spend, and simulate hiring or cuts before you commit.
3 min readLast updated
In this article
The headcount budget sets, for each department and fiscal year, how many people you plan to employ and how much you plan to spend on salaries. The screen compares that plan with reality and lets you model a change in headcount before you approve it. It is a planning tool only: nothing here posts to the books.
Before you start
Departments must exist. See departments and job titles.
Actual salary spend comes from completed payroll runs, so it fills in as you run payroll during the year.
Set a department budget
Open People › HR Admin › Headcount Budgeting & Simulations and choose the year in the toolbar.
Select New Budget. The form shows the fiscal year it applies to.
Choose the Department.
Enter the Headcount Target and the Salary Budget for the year.
Optionally enter the Benefits Budget and the Training Budget. Amounts cannot be negative.
Choose the Status (draft, approved, active or closed) and add Notes if you want.
Select Save. Each department can have one budget per year; to change it, use Edit on its row.
How the figures are calculated
Actual headcount: the number of employees in the department whose status is active today.
Variance (headcount): the target minus the actual. A positive number is room to hire; a negative number means the department is over its target and shows in red.
Salary Spend: the sum of gross salaries on payslips of completed payroll runs whose period starts in the selected year, for employees of the department.
Salary Variance: the salary budget minus the salary spend.
Utilisation: the salary spend as a percentage of the salary budget.
The cards at the top add these up across all departments: Headcount, Salary Budget, Salary Spend and Utilisation. The chart shows target against actual headcount for each department.
Simulate a what-if scenario
Below the table, the What-if scenarios section models a change in headcount and its effect on labor cost and efficiency.
Select New scenario, enter the Scenario name and a Description, then use Add change for each department you want to change.
For each change, choose the Department, enter the Headcount change (+/−) as a whole number (negative to reduce) and the Average monthly salary of those people.
Save, then select Simulate. Use View result to read the outcome and Run again after more payroll has run.
The result compares Current and Simulated values for four metrics:
Metric | How it is simulated |
|---|---|
Headcount | Active employees today plus the sum of the changes. |
Labor cost | Gross salaries of completed payroll runs in the last 12 months, plus each change × average monthly salary × 12. |
Production value | Output value of manufacturing work orders completed in the last 12 months, plus the headcount change × the current output per employee. |
Labor efficiency ratio | Production value divided by labor cost. |
Common questions
Why is Salary Spend zero? No payroll run with a period starting in that year has been completed yet, or the department's employees were not in those runs.
Does approving a budget or a scenario change payroll? No. Budgets and scenarios are for planning and do not change salaries, positions or postings.