Total Cost of Workforce Model
The Total Cost of Workforce (TCOW) model forecasts the future total cost of workforce based on the headcount targets and known budgeted compensation for employees.
Overview
The Total Cost of Workforce (TCOW) model is the Visier Planning model that mathematically projects future costs. The model uses the headcount targets from the Headcount model along with the known budgeted compensation for employees in order to project the future total cost of workforce in the workforce plan.
The TCOW model breaks down the projected workforce costs into the following planned metrics:
- Direct Compensation Costs - Planned: The projected direct compensation costs that will be paid to employees in a given segment. It includes Base Pay, Supplemental Pay, Variable Pay and Long-term Incentives.
- Benefit Costs - Planned: The projected benefit costs to be paid to employees in a given segment including Health Benefits and Pay For Time Not Worked.
- Employer Costs for labor - Planned: The projected employer costs relating to workforce compensation. It includes Employer Insurance And Taxes as well as Contingent Worker Costs.
- Employee Overhead Costs - Planned: The projected employer costs relating to employee overhead. It includes Hiring Costs and other Workforce Allocations.
Note:
- These “Planned” TCOW metrics are designed to align with the Actual TCOW metrics in the application. This means that the planned values can be monitored against actuals over time so that you can see the performance of the workforce plan.
- You can model TCOW for any cost metrics you have onboarded. For example, if you do not have one or more cost components onboarded that roll-up to a cost, then it will be modeled based on only the data onboarded.
How do headcount targets drive cost projects?
The headcount targets, set in your plan in the Headcount line under Plan Items, represent how many people are expected to be in a given plan segment in a given plan period, and drive the TCOW. This means that as planners adjust—increase or decrease—the headcount targets for a given segment, the total cost of workforce projection is automatically updated based on the new headcount targets.
How can I view the projected TCOW by segment?
In the planning grid, switch to Segments view. From here, view the projected TCOW by segment. Then, select the Cost of Workforce - YTD metric (or Cost of workforce - Period) from the dropdown in the planning grid. When you do this, you will notice that:
- The planning grid updates to show TCOW projected down by the plan’s segmentation.
- The most recently onboarded TCOW data appears in the blue column on the left of the grid. Normally, this is budgeted compensation for employees the customer has onboarded to Visier. However, where customers do not have budgeted compensation, data from actual payment events can be used.
- The TCOW projection for each segment is indicated in the grey columns. These columns are not editable until you go to the lowest (leaf) level of your plan. This is because the costs at higher levels are roll-ups from child segments.
TCOW components
The Total Cost of Workforce (TCOW) includes all items relating to compensation, benefits, and costs associated with supporting and maintaining workers. It includes items such as:
- Payments for contract labor.
- Costs required to provide workers with business services such as IT, HR, and office space.
- Costs for hiring people into the organization, moving people out of the organization and moving people within the organization.
The following illustration shows the different components of the Total Cost of Workforce:
