Your employees are your most valuable resources. But they’re also one of your company’s largest expenses. Employees’ hourly wages, the employer portion of payroll taxes, and any provided health care or fringe benefits all add up and can quickly eat into your business budget. If management and human resources don’t pay close attention to labor costs and practice proper labor allocation, companies can soon find themselves going over budget.
This is especially true in the behavioral health and human services fields, as workers frequently work overtime to meet patient needs or help out when there’s understaffing due to labor supply shortages. To get an accurate view of your organization’s labor costs, you must also pay attention to labor allocation. Without the proper allocation of labor on the employee’s timesheet, it’s difficult for employers to get a detailed view of direct and indirect labor costs for each department or program.
Accurate labor allocation allows businesses to break down labor costs by department, program, position, location, and other key categories to clearly see where money is being spent. This data is essential for organizations in human services or behavioral health, which often have strapped budgets. Find out how labor allocation can improve budgeting and how the right software can simplify the process.
While many employees in traditional corporate roles typically spend the entirety of their work hours in one specific department or program, behavioral health and human services staff move around a bit more. Employees frequently support different programs, client categories, or departments within the same week or even within the same shift. This can present a unique challenge for time tracking, payroll processing, and managing labor costs. However, when these labor costs are properly allocated to the right cost centers, they can provide helpful insights for budget planning.
Allocating Resources Based on Outcomes and Demand
Allocating labor costs to the correct department, location, or project can help leaders get a clearer picture of where they’re spending money and devoting their staffing resources. Behavioral health and human services organizations operate with incredibly tight budgets while dealing with increasing demand for services, so it’s important to drill down into this data to ensure that resources get allocated to the programs or departments that need them most. After all, the goal is to help as many patients as possible without overspending your budget.
If you use an electronic health record (EHR) with detailed reporting on patient care outcomes, it can be helpful to compare labor costs to the active patient numbers and reported outcomes of different programs, departments, or client pools. This is a great decision-making tool for evaluating spending or deciding where to make budget cuts as you want to dedicate funds to the areas where they can do the most good for the greatest number of patients. In many cases, it’s most practical to dedicate more staff hours to programs with higher patient caseloads or more complex treatment plans.
Comparing Incurred Costs vs. Budgeted Costs
An optimal tool for keeping your labor budget on track is Position Control, which is a feature that is unique to ContinuumCloud’s human capital management (HCM) platform. It provides a position-based framework rather than an employee-based framework for viewing your employee data, including labor spending. It can give you better visibility when managing your budget by providing real-time data on labor costs by department, program, or position.
Organizations can even use Position Control to compare their actual costs against their projected labor costs to see whether they are staying on budget. This real-time data allows managers to make prompt adjustments to the schedule if they see that they’re on track to go over budget for the week, month, or quarter.
If you aren’t comparing these numbers in real-time, you may not realize that you overspent on your labor costs until after the fact. Since many human services organizations are funded by annual grants, there aren’t always opportunities to make up for this overspending down the line by increasing income, so it can lead to major budget problems.
Understanding Hiring Needs
Another benefit of using Position Control for labor allocations is that it can help you understand your hiring needs and stay within budget while hiring. If direct labor costs aren’t being allocated to the correct programs or departments, it can be challenging to see what positions need to be filled most urgently. For example, if one department is constantly having to pull in staff from other parts of the organization to meet patient care needs, you’ll want to move that department to the top of the list for recruiting and onboarding new employees. However, if those employees aren’t marking on their timesheets that they spent time in the understaffed department, it may look like everything is fine on paper.
Position Control can also help you see which positions are currently unfilled. Under an employee-based system, a position may just disappear from your HR system when an employee leaves. With Position Control, it’s left in place in the organizational chart and can still be factored into your budget planning. For positions that are open, you can view data on daily lost revenue, helping you prioritize hiring around these numbers.
Position Control also allows organizations to easily set salary ranges for each position and creates an approval process for filling positions. This ensures that everyone in the company is on the same page about which roles can be filled and what the budgeted salary is.
With Position Control, ContinuumCloud’s HCM system allows for more effective labor cost allocations given the better visibility across the system. The position-based foundation of the platform can better handle when an individual is allocated to multiple programs and provides visibility into the costs at the program level, department level, and other organizational dimensions. This allows your company to maximize resources to make budgets stretch further and to make more of an impact.
The HCM platform makes it easy for employees and managers to allocate labor hours accurately on timesheets. Employees who split their time between different departments or programs on a consistent basis can have their time automatically allocated on their timesheets based on the percentage of time that they’re scheduled in each cost center. If an employee works between several departments in a less predictable manner, they can do a manual labor allocation by completing an effort report to allocate their time.
ContinuumCloud also allows businesses to configure custom timesheet approval workflows so that timesheets can always be routed to the correct approver, even if some employees have multiple supervisors. If employees work in different departments or locations, timesheets can be routed to all of their supervisors for approval of the relevant hours each pay period.
Manage Labor Allocations and Achieve Better Outcomes
Many human capital management systems lack the tools that organizations need for proper labor management and budgeting. They may offer under-developed position management functions built into an otherwise employee-based system. However, ContinuumCloud is built around Position Control — and it’s the only system created specifically for behavioral health and human services organizations.
Position Control is an optimal feature that will help you obtain a clearer view of your labor allocation and costs to get a better handle on your budget. As such, providers can create a better experience for both patients and staff members.
Contact us to learn more about ContinuumCloud’s HCM solution and how it can help you maximize your resources and streamline labor allocations.