The 4th page of Visual Rota gives you the opportunity to cost out the labour element of running your establishment to as exact a figure as you like. This is done by giving a cost to each hour worked. Visual Rota converts all shifts into hours paid, and also into the cost of every persons shift. Each person can be costed separately, or in groups, or totals daily or periodically. Visual Rota has the power to tell management the cost of every employee in as much detail as they would like - immediately. Update a roster and the cost, or saving, is shown immediately.
It is first necessary to determine the cost of employees as an hourly rate. The accuracy of the hourly costs determines the accuracy of the budget and how much it can be controlled or reduced, in pounds or dollars, and this can be as accurate as you like.
All employees incur a direct cost and an indirect cost. The cost elements that go into these direct and indirect costs can be determined by various methods, but the table below shows many of the costs involved - by name. The values given to the costs are for you to determine from your company accounts, but some idea of how to do this is also included below.
Insurance
Direct Costs.
Hourly Rate or Salary.
Hourly rates are the simplest to use, everyone who is paid an hourly rate will use a simple relationship such as £5 per hour, so that for every hour that the person is on the premises and working, they will receive £5. This value of £5 can be input into Visual Rota without amendment.
Salaries.
These are accurate if translated to £/hour with an error of rate of 10-15% unless it is done carefully.
For example, a person working 40hrs/week translates into about 40x52=2080 hrs/year. Hence a person on £10,000pa could translate into £4.8077/hr. This ignores the extra day every year, 2 in leap years, which could occur in 5 years out of every 7, which equates to a reduction of about 0.3% or for our example £0.0144. Another way to look at these numbers is to multiply £10,000 by 0.3%, answer = £30pa per employee, and 100 employees makes for £3000 extra profit.
So, where does the error of 10-15% come from? Almost all employees have paid holidays, and if a typical holiday was 4 weeks (20 days at 8hrs/day) plus 8 bank holidays, this equals a paid leave of 28 days out of 210 contract days, or 13.33%. In addition almost all employees have days off sick and these can be paid for or not paid for, also almost all employees arrive late at some time, or leave early at other times. All the above, and other paid leave is specific to each establishment, but can be costed fairly and accurately using past data and averaging out.
For example, if a company has 28 days holidays including bank holidays a year, an average 3 days sick leave per employee and an average 5% lateness rate of 15mins, translates a salary of £10,000pa to £5.5077/hr an increase of 14.56%. This type of exercise can ascertain the main expenses or detail all the expenses to the accuracy you desire. It is always worth going through the exercise to eliminate uncertainties.
National Insurance(Employers).
This is a government determined percentage of employee's periodic pay. This is usually determined after pay day and the amounts can vary enormously from one period to the next. There are various options available to deal with this and depending on how accurately you want to know and whether this should be known in advance. The most accurate method is to complete the Rota for the payroll period, feed the hours-worked data into a payroll package and extract the NI contribution level. This can then be used for determining the new hourly rate. Most employees will be earning similar amounts every period, hence they will be having the same rate applied every period.
For example, an employee on an hourly rate of £5 will have a NI rate of 9%, and hence an increase of £0.45/hr to £5.45/hr.
Pension Payments(Company).
This is often a percentage of the pay and is subject to the company rules. It could be, say, 6% of salary, or of monthly pay.
Indirect Costs.
This cost is far more difficult to arrive at. The method used to determine each associated cost will usually take the following approach.
Indirect costs to do with space and area.
Every establishment has a building and some of the building will be for staff use only, such as toilets, rest rooms, laundry, stock rooms, staff dining etc. . A numerical fraction of the building can be determined for staff use.
Indirect costs to do with each staff member.
These costs are split into 2 sectors, those costs proportional to hours worked and costs irrespective of hours worked. The decision is often judgmental, and at different times can be assessed differently.
Costs
proportional to hours worked are those such as holiday pay, maternity pay, supervision, meetings.
Costs
irrespective of hours worked are those such as uniforms, training, cleaning, employee insurance, rates.
Method
of converting indirect costs to an hourly rate of pay. First, the items listed above can be obtained from the accountancy reports and the cost for a period such as one year. Second, Visual Rota will give you the number of hours worked by everyone, collectively, by group and as a total for the same period. Third, each cost is judged on its merits.
For instance, electricity. The cost of this is judged to be proportional to the area of the building and proportional to the hours worked. The relevant data is; electricity costs £10,000pa, staff area ratio 25% of total building area, staff hours total to 100,000hrs/year. This data converts to an hourly rate of 2.5p/hr.
Second instance, employee insurance. The cost of this is judged to be proportional to the number of employees. The relevant data is; cost of insurance £1,000pa, number of employees is 100, Mr Smith works 20hrs/week, Mr Jones works 35hrs/week. This data converts to an hourly rate for Mr Smith 1.0p/hr and Mr Jones 0.55p/hr.
There will always be tiny amounts involved as well as the large amounts such as pay, it is just that there are dozens of the tiny amounts and they all build up. Even if you disregard the sums eventually, the reason why you disregarded them was because you had factual evidence that they were not relevant to your costs.
Visual Rota gives you the power to save on costs by giving you a management tool to experiment with your real work force or to simulate the costs and staffing for an ideal staff/cost ratio. It gives you the power to find out if the oft-mentioned flexibility of having extra staff is worth the extra cost of having unproductive staff, or if there is a cheaper alternative.
Using Budgetary Control in Visual Rota
In order to use the Budgetary Control feature of Visual Rota, you need to enter three hourly rates for each member of staff. The three rates are as follows:
Rate Purpose
Rate 1 The rate for normal week days
Rate 2 The rate for Saturdays
Rate 3 The rate for Sundays
The full set of images are atVisual Rota Images The links via this picture have been disabled
The three rates are entered down column AS, AT and AU respectively. Each member of staff has three individual rates, which can be calculated as detailed above.
Visual Rota automatically calculates the total cost of employing each member of staff for the roster period.
This value is shown in column CI (Column CI is off the picture). Visual Rota also calculates the cost per day, which is
shown in row 8. In addition, totals for each default staff zone are shown on Page 4 of Visual Rota, with the total cost of
each roster period.
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