Best practices: Labor compensation rates

Strategies for labor compensation rate values

Labor compensation rates are recorded in the Labor reference data table. For implementation details, see Manage Labor reference data. Before recording labor compensation rates, Apptio recommends your organization to adopt a standard approach. The following are common labor compensation rate strategies to consider.

Midpoint values

This strategy uses the middle of the established salary range when tying salaries to labor. For example, if the salary range was $56,000 to $94,000, the midpoint would be $75,000.

• Advantage - Hides salary information from view while providing a level of data for clarity.
• Disadvantage - The level of information in reporting cannot be 100% accurate. There would be in an increase in variances as there would be no tie back to actuals.

Average

Plans use the average of all salaries when rolling up into a larger budget or forecast plan. For example, if you have 10 analysts, you would take the average salary of those 10 analysts.

• Advantage - Allows you to hide salary information, as well as provide a strategic view of salary data.
• Disadvantage - Does not allow for a more granular approach to viewing salary data. There would be in an increase in variances, as there would be no tie back to actuals.

One Rate

One rate for all employees and real salaries are entered in the Expenses tab by managers. Managers are the only ones who can see these if you hide the Labor tab from Admins with a custom role. See Restrict access to labor salary details. This is the recommended approach, as this provides the most accuracy into salary data while still offering some level of protection.

• Advantage - Allows for accurate planning when budgeting or forecasting with regards to salary information. Also allows for the ability to drill down into reporting for a more granular view of salary data.
• Disadvantage - Managers can see all salary information within their departments. Also, this data is visible to the TBMA or Apptio Admin. There would be in an increase in variances, as there would be no tie back to actuals.

Best practice: Entering salary information by role, region/location, and employee type (external vs. internal)

• Advantage - Most accurate approach, least variance, and ties back to actuals.
• Disadvantage - All Admins can see salary information. In addition, anyone with access to a specific Cost Center can see all the salaries in that Cost Center.

Labor security options

This section describes strategies to protect labor information within your Apptio environments.

Manage Cost Object Permissions

Many companies set up detailed Cost Object permissions. These companies take considerable effort to ensure that the permissions for every end user are set up properly per the level of their respective roles. To learn more, see Restrict access to labor salary details.

Hide labor Information

Within their respective Apptio environments, under the Roles tab, the option exists to remove the Labor option altogether from individual users.

Track labor outside of Apptio

Some companies choose not to track labor information within their respective Apptio environments. These companies utilize other systems to track specific labor information and use those systems in conjunction with Apptio.

Restrict labor access to Admins

Labor information can be hidden from everyone except Admins, who would have to budget all the labor. See Restrict access to labor salary details.

User Permissions

To know more, see Setting up labor compensation adjustments.