Forecasting your staff costs
The podcast is brought to you by www.powdr.co.uk - financial forecasting software that can help you build a reliable model, driven by your strategy.
The podcast discusses how to effectively forecast costs related to hiring staff and managing them. Here’s a summary of key points:
Recruitment Costs: When hiring staff, consider recruitment expenses, which may grow proportionally with an increase in team size. Factor these into your forecast early on.
Learning, Development & Travel: Additional costs for staff learning, development, and any potential travel should also be forecasted, particularly as your team expands.
Hiring Strategy: Deciding when and who to hire is crucial. Focus on areas where new hires will bring the most value to your business. You can also explore fractional support, consultants, or outsourcing for specific business needs like marketing or sales, which may be more cost-effective than full-time employees.
Full-Time Staff Costs: For full-time employees, include pensions, National Insurance (NI), and any bonus plans in your forecasting. Don’t forget that small businesses in the UK may qualify for NI relief up to £5,000. Make sure to account for this relief in your forecasts and know when it may no longer apply as you grow.
Staff Growth Linked to Business Growth: As your business expands, more staff will likely be needed, such as customer service representatives or tech developers. Whether you choose human resources or automated solutions (e.g., AI), the forecast should reflect these costs.
Realistic Planning: Your staff should grow in alignment with your business. If not, ensure you can explain why. Using forecasting data to identify when you need to hire can help manage costs and maintain efficiency.
By carefully planning for recruitment, training, and additional expenses, and leveraging external support where appropriate, you can create a robust, realistic forecast for staff growth and related costs.
You Might Like
