Human Resources Costing

• Human resources costing involves determining the cost of services provided by this department. The HR department provides internal training to various departments, negotiates insurance contracts, manages tuition reimbursement plans and addresses employee concerns. As the company evaluates the cost of the HR department, it considers each function separately. This analysis provides the total cost for the department, the number of times each service is offered and a cost per service. For example, the cost of providing training may be divided by the number of trainings performed per year to calculate the cost of each training session.
  
  

In House Vs. Outsourcing

• One strategic decision considered by senior management involves the question of outsourcing. Senior management considers each function independently as it determines whether it should outsource. Managers use the cost calculated for each function. They also research other companies to learn the market rate when outsourcing that function. After comparing these costs, senior management decides whether it makes sense to outsource or to keep the responsibility in house.
  
  

Software Options

• Another strategic decision requiring human resources costing considers various software options. Some companies implement software programs that allow employees to access their own personnel records, to apply for time off and to attend online training sessions. These programs reduce the cost of paying HR employees to train employees and address employee concerns. These programs also require a significant financial investment from the company to implement and maintain. Senior management considers the cost for each option as it determines what action to take.
  
  

Value

• Human resources value represents another strategic concern for senior management to use human resources costing for. HR employees spend time working on a variety of tasks. Some of these tasks represent busywork, such as filing or looking up data. HR costing allows senior management to determine how much money it spends for employees to perform these tasks. Senior management can investigate options for automating these tasks, allowing employees to focus on tasks that provide higher value to the business.