What are 'Rate Cards' and 'Budgets'?
What are rate cards?
Rate cards are a common way for organisations to estimate the cost of teams.
In TeamForm, rate cards are set as an average of a supply team (typically a chapter, practice or home team). Calculations using average rate cards are intentionally approximate rather than precise, in order to preserve confidentiality of individual salaries.
Typically an organisation’s Finance department owns the calculation approach and logic to derive rate cards.
What are budgets?
Budgets are financial cost envelope within which a team is expected to manage.
In many organisations budgets can be set against both demand (delivery) teams and supply (home / chapter / reporting line) teams.
How are rate cards usually calculated?
A rate card is typically an average cost for a group of like people within an organisation – some examples to help explain:
All software engineers in Australia
All JavaScript developers in New South Wales
All senior JavaScript developers in Sydney
An organisation’s Finance area will typically take the total / fully loaded cost of individuals in the scope e.g. salary, benefits, compensation, other types of expenses such as real estate etc and then average those costs over the number of working days to create an average day rate.
CAUTION: The more people in the scope of the rate card, the more averaged the cost for people in that scope. If there is only one person in a given scope for a rate card then it is too easy to work out an individual's salary costs.
How does TeamForm use the Rate Cards?
Rate cards are brought in via an import. TeamForm takes the daily rate card then leverages the number of working days set in Allocation Project configuration to calculate the set frequency cost of the specified FTE.
The formula used to calculate this is:
DailyRate × NumberOfWorkingDays × Baseline FTE value within each supply group
How does TeamForm use the Budget?
Budgets are solely brought in via an import. TeamForm takes the budget set against the supply team within a demand team and compares this with the cost of the requested FTE from that supply team to indicate whether the team is over, under or within the budget constraint.
The formula used to calculate this is:
Supply team budget − ( DailyRate × NumberOfWorkingDays × Baseline FTE value within each supply group )
Limitations of Rate Cards
Rate cards cannot be done at the individual level due to confidentiality.
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