Dinesh Divekar
Business Mentor, Consultant And Trainer
Partner - Risk Management
+2 Others

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Dear seniors,
Recently I was joined mfg. co, I have service sector experience, in this co my company CEO given me a task to prepare presentation of Manpower Cost analysis
Pl help me out what is the formula we can use and what details we can consider ?

From India, Pune
Dear Sharada,

Probably your CEO is asking break up of the total HR budget. "Employee Cost", includes expenses towards monthly salary, statutory payments, medical insurance payments, training expenses, staff canteen expenses, staff welfare expenses, expenses towards picnics and outings, expenses towards uniform, expenses towards overtime and so on. Sit with your accounts and find out the break of the percentage on various counts.

The second important thing is what is the percentage of your employee cost against total sales? Calculate this percentage for the last three financial years and also show any YoY or QoQ increase/decrease.

Earlier there was post on HR Statistics. Click the following link to read my comments:


Prepare your analysis report and submit to your CEO. Please share with us his observations or findings on your report. This will help other members to of this forum to prepare similar report if required.

Dinesh V Divekar

From India, Bangalore
Manpower cost analysis can have any of multiple meanings
You need to get a clarification from your CEO what he needs.
It could be a simple analysis of manpower cost, giving break up of salary in various heads
Or it could be he wants it by department
Or perhaps by designation / grade
In manufacturing, he may even be asking for it to be given per unit of production, or perhaps woth comparison of previous years.
You may end up doing something not necessary (and therefore taking longer than required) or you may me do what he wants. Your CEO may then take it as an indication that you can't do work properly, when it is simply a case of into understanding the scope of his instructions

From India, Mumbai
Dear Sharda

Man power cost analysis is the work of a Cost Accountant in a manufacturing company. First you have to identify the man power of the different departments and segregate them properly. Few persons work for all the departments like your CEO and yourself. The second step is to segregate the fixed and variable man power, i.e. there will be some who are permanent and some are casual. You have to pay the salary to the permanent staff in whether there is any production or not but in case of casual, the company take there services only in the case of the extra requirement of the man power. Now the CTC of both the group will be different. In this way you will get the fixed as well as the variable cost of each and every departments. Now the persons who work for all the departments, for that you just club all the salary of these persons and allocate as per the production of the departments. The last part is to add the specific man power cost of the departments with the cost of the common man power. You will get the man power cost of the departments.

From India, Bangalore
Dear Sharada,
After raising the query, you had sufficient number of responses. So finally how did you calculate the manpower cost? Did your calculation satisfy the CEO? Did he raise objection on some points?
We will be thankful to you if you could give us some feedback.
Dinesh V Divekar

From India, Bangalore
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