Human Resource Cost
The cost associated with employing a workforce is a major factor for any business. These costs vary depending on a number of factors including the number of employees, the type of positions they occupy, the type of benefits and other factors such as training and professional development. Human Resource Cost (HRC) are typically divided into direct and indirect costs. Direct costs include wages, salaries, and benefits for employees, while indirect costs relate to employee management and administrative tasks such as hiring, recruiting and retention.
Direct costs associated with HRC can include wages, salary, and benefits for each employee. Wages are the basic rate of pay for individual employees and can be further broken down into the different types of wages, such as overtime, hourly, and commission. Salary is typically a fixed rate of pay that goes to certain positions in a company and is usually based upon experience and qualifications. Benefits, such as health insurance and paid vacation time, can also be included in this cost.
Indirect costs can be broken down into labor costs and administrative costs. Labor costs refer to the costs associated with recruiting, training and retaining staff. This type of cost includes hiring fees, training fees, and other administrative costs. Additionally, recruitment costs, such as advertising and interviewing, should also be considered.
Administrative costs refer to the cost associated with managing the workplace. This cost includes things such as payroll taxes and any additional administrative services. It also includes the costs associated with benefits such as Human Resource Administration (HR Administration) and Workplace Safety (WPS). HR Administration costs include costs associated with payroll administration, personnel administration and discipline, and job evaluation. WPS costs include fees associated with training, inspecting, and any other activities pertinent to workplace safety.
The cost associated with employing a workforce is a major factor for any business and must be carefully defined and calculated to ensure that the business is not overspending in its HR costs. Direct and indirect costs must be taken into consideration when calculating HRC. Direct costs include wages, salary, and benefits for each employee, while indirect costs relate to employee management and administrative tasks such as hiring, recruiting, and retention. Understanding and managing HRC is an important part of managing a successful business.
