It’s no secret that budgeting has been a significant challenge for behavioral health and human services organizations. To begin, these organizations typically have limited funding and income compared to other healthcare specialties or for-profit businesses. While many healthcare companies make most of their income through insurance reimbursements, these payments are typically lower for behavioral health organizations. Moreover, demand for services increased during the pandemic and remains high today. As such, the need for budgeting best practices and financial management is crucial.
But budgeting best practices aren't just about how you spend money. They’re about how you track that spending. Without the right tools, it's difficult to accurately forecast your revenue and costs, build a budget, and stick to that budget by tracking your expenditures throughout the budget cycle.
You may not think about human capital management (HCM) as a budgeting tool, but the right HCM platform can make a significant difference when managing labor costs. Discover how the right platform – particularly one based on Position Control – can support budgeting best practices and set you up for success.
What Is Position Control?
Position Control is a tool that organizes and tracks a workforce by position rather than employee. It gives organizations, such as those in healthcare and human services, a better way to understand and manage employee data.
With Position Control, you can set specific attributes for each position to streamline budget planning, hiring, and workforce analytics tracking. You can assign attributes like budgeted salary range, location, department, required credentials, and hierarchy to positions rather than individually to each employee. As a result, business leaders can get a clearer view of their workforce while organizations can leverage this information to support budgeting best practices.
For instance, Position Control allows administrators to quickly access employee headcounts, hiring needs, labor spending, and credentialing compliance data. In addition to specific positions, organizations can also use Position Control to view data by full-time equivalent (FTE) to analyze costs, spending, and staffing levels.
Position Control vs. Employee-Based Systems
With labor costs making up the largest expense for most organizations, tracking and budgeting effectively is essential – especially for those in the behavioral health and human services field who don't have extra dollars to spare.
Many organizations use an employee-based system, which is problematic for budgeting because of the fluidity of the workforce. Employees come and go, change positions, or split their time between different responsibilities. It’s a challenge to track the budget at any given moment, let alone forecast the future.
This is especially true for behavioral health and human services organizations, which typically have higher turnover rates, more internal transfers, and often have staff split their time across different programs or cost centers.
Using Position Control is a best practice for financial planning, as it enables you to budget by position regardless of whether the position is filled, open, or divided between different employees. Without this feature, labor cost forecasts will likely be inaccurate as they may fail to consider unfilled roles when forecasting staffing expenditures.
How Position Control Supports Budgeting Best Practices
Position Control can support standard budgeting best practices, including tracking business operation costs like labor expenses and providing better data transparency for budget tracking. Here’s a closer look at how Position Control can help through various stages of the budgeting and strategic planning process.
Forecasting and Tracking Labor Costs
To follow budgeting best practices, you need to track budgeted costs against actual spending. Most organizations forecast and try to plan for expenses during the annual budgeting process. However, without the right tools, monitoring whether you're staying on track or overspending can be challenging.
Position Control enables you to easily compare budgeted versus actual costs side-by-side whenever you need to. The reporting capabilities of position-based software allow you to get the information you need when you need it.
What’s more, because specific characteristics like program, department, job code, and funding source are tied to the position itself, you can track labor costs by any of these features individually. This can be invaluable for nonprofits that must report to funders or board members regarding labor cost allocations.
Preventing Overhiring With Clear Approval Workflows
Ideally, every open role can be posted and filled. But organizations with strict budgets, like those in human services, often need to prioritize what roles they can afford to fill. Often, organizations may need to wait until the next fiscal year to make room in the budget for vacant positions or greater staffing needs.
The visibility that Position Control provides helps prevent the all-too-common issue of overhiring. In a Position Control system, open positions must be approved before filling them. HR and finance teams can use this to ensure filling that position will stay within budget.
Identifying Missed Revenue Opportunities Caused By Understaffing
Another budgeting best practice is understanding each role's value and which openings may be causing you to miss out on potential revenue. This is particularly critical for high-turnover industries like behavioral health and those that earn revenue through billable hours or services.
ContinuumCloud’s HCM offers daily lost revenue reports to help you identify which vacant positions are causing your organization to lose the most income so you can prioritize the right roles in recruiting efforts.
Reducing Budgeting Blindspots
Many budgeting issues arise due to blind spots in the budgeting process. Too many organizations overlook major costs, revenue problems, or other cash flow issues until the end of the year when annual reports are created and reviewed. Companies using outdated methods like manually tracking spending on Excel spreadsheets are especially prone to blind spots or budget errors.
ContinuumCloud's HCM system, built with Position Control, helps improve data transparency. It provides leaders with the data clarity and level of detail needed in an ongoing process to support proper budgeting and decision-making.
Finance departments and HR leaders can review standard reports, customized reporting, and visual dashboards to help them get a clear view of their data in real-time.
Supporting Fundraising Efforts to Expand the Budget
Behavioral health and human services organizations often rely on grants, donations, or outside funding for building budgets. You may consistently rely on donations or grants to maintain ongoing financial sustainability or fundraise for new initiatives or program expansions.
Precise data can help you showcase unmet needs during fundraising cycles or demonstrate to stakeholders that they’re putting their current funding to good use. Keeping detailed metrics and reporting on organizational progress towards strategic goals and key performance indicators (KPI) is a best practice for all companies — especially those reporting to board members or funders.
Position Control for Better Budget and People Management
Many HR and budgeting software options don't meet the unique needs of behavioral health and human services. Most HCMs take an employee-based approach that fails to deliver the benefits of Position Control.
When you can create a budget and forecast effectively, your organization can run as efficiently as possible — and your entire workforce can make an impact on the people and communities you serve.
Beyond budgeting, Position Control has many applications and benefits, such as payroll tracking and performance management functions, that together help your organization achieve its mission. Connect with us to learn more about ContinuumCloud’s HCM solution featuring Position Control and learn how it can make your operational budgeting a breeze.
