What are 'Rate Cards' and 'Budgets'?

What are rate cards?

Rate cards are a common way for organisations to apply a coarse grain financial rate of an individual without divulging their salary or related information so that this information can be used for the purposes of planning.

Rate cards are not intended to be precise, they should be approximately accurate based on the criteria used to generate them. This will vary based on the organisation and its size, its geographic footprint and its level of maturity and transparency.

Typically the customer’s Finance department owns the calculation approach and logic for how the rate cards are deprived, if they don’t own them then they will certainly have a lot of questions.

In large complex orgs it is common for rate cards to be generated using Spreadsheets, Planning tools (e.g. Anaplan, IBM Planning Analytics, SAP Analytics Cloud etc.) as you typically need to span many types of data and dimensions to then come up with a meaningful approach.
e.g. country x role x band (or level / rank)

What are budgets?

Budgets are cost constraints set against teams so that when they undergo planning they know what financial constraints they have to manage within against the work that needs to be delivered.

In many organisations budgets can be set against both demand and supply teams and it generally would be Finance that owns the calculation and/or creation of these team budgets and delivers this to the teams.

How do Finance calculate rate cards?

This will vary but commonly a rate card is an average cost take over a range of criteria and people within a slice of 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

So finance 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 out against everyone in the particular rate. This way you do not get too close to a single persons salary and focus more on an average cost in a bucket instead.

How do Finance calculate budgets?

This will vary but commonly budgets are set based on a specific project and/or plan and the associated milestones and/or deliverables.

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.

Limitations of Budgets

In TeamForm, budgets are set against supply teams within each demand team. We currently do not have any ways to allow demand teams to set their specific target as the feature has been built on the basis that supply teams will provide budgets to demand teams given that they are responsible for approving FTE requests.

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