Understanding how Total cost works

You can now work out the Total cost of any Position on your org chart in Functionly to help with budgeting for workforce and headcount planning.

 

Total Cost - Functionly

 

Total cost for a Position in Functionly is displayed as an annual sum but the inputs to calculate it can be added based on annual or hourly compensation.

To understand more about how "Total cost" works click the link below that reflects how compensation is measured in your organization:

  1. Annually
  2. Hourly

 

1. Annually

 

Annually - Functionally

 

There are two components that combine to generate the "Total cost" of any position measured annually in your chart:

 

Annual base comp

Annual base compensation is the total amount that a person should expect to earn were they working full-time on an annual basis e.g. if a person works a 48 week year (with vacation is factored in) then their Annual base compensation might be $120,000.

 

Effort (FTE)

Given how flexible working has vastly increased over the last few years, it's important to be able to factor in people who may not be full-time in their position. For example, if a person is in their position full-time then their FTE (full-time equivalent) will be 1 or if they're only working four days a week then their FTE will be 0.8.

 

Total cost (annual comp)

Annual "Total cost" works by taking someone's "Annual base compensation" and multiplying it by their "Effort (FTE)", so that if a Position has an Annual base compensation of $120,000 and works four days a week (0.8 FTE) then their annual Total cost will be $96,000.

 


 

2. Hourly

 

Hourly - Functionally

 

There are three components that combine to generate the "Total cost" of any position where the compensation measured hourly in your chart:

 

Hourly base comp

This is the amount paid for any position in your organization as an hourly rate in your organization e.g. someone's compensation might be $62.50.

 

Work hours/week

This is the total hours a person works in their position a week e.g. if they're full-time they may be 40 hours a week or if they're working four days a week they'll be 32 hours a week.

 

Work weeks/year

This is the total number of weeks in a year that a person works in a position, so if they have four weeks vacation then they may work 48 weeks a year.

 

Total cost (hourly comp)

"Total cost" based on "Hourly base comp" works by taking someone's "Hourly base compensation" and multiplying it by their "Work hours/week" and their "Work weeks/year", so that if a Position has an Hourly base compensation of $62.50 and works four days a week (32 hours/week) and has four weeks vacation (48 weeks/year) which equates to Total cost of $96,000.

 

 

Have questions about compensation or total cost? Contact email us at support@functionly.com or via our Contact us page.