Salaried Resources

[Steve]

Hi group,

Does anyone know of a way to calcuate project costs based on a resource's
salary, and length of involment in the project?

I have a mix of salaried and hourly-rate resources on my project, and I want
to separate the calcuations of costs based on this difference.

Thanks!
Steve

 

[Rod Gill]

Hi,

Lets say you have someone on 100,000 per year (lets keep the numbers nice
and easy for my tired brain!)
Lets also say that overheads for employing this person are 50%
Total cost of employment =150,000/y

In project's resource sheet, enter a rate of 150,000/y

That do what you want?

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[Steve]

Thanks for the reply,

I tried doing it the way you suggested, but the costs don't work out right
because it's just a different unit of the same thing. What I mean is, if my
resource costs $150K/year at loaded labor rate, I can enter this cost as
$76/hour, and the overall costs end up the same because $76/hour is the same
as $150K/year.

What I really want is the cost of the resource to get calculated based on
the length of time they are involved on the project, not based on the hours
each of their tasks take to complete.

To further complicate things, I also want other resources' costs to get
calcuated based on the default effort of tasks, as this set of resources are
contracted on a per hour basis.

Or could be that I'm trying to get too fancy

Cheers
Steve

 

[Steve House]

IMO, you're mixing up "resource costs" with "project costs." Project
calculates the marginal cost of doing the project, not the costs to the firm
of employing the resource and in terms of the costs of actually doing the
project work, prorating employment costs to an hourly rate and multiplying
it by the man-hours the resource actually works of project tasks is the
correct way to figure them. If I have Bob for one month (160 work hours) at
a cost to the the firm of $5000 in salary, etc for that month, and I use him
100% (all 160 of them), he has cost my project budget $5000. But if I only
use him 50%, 80 hours, he has been doing something else for those other 80
hours. My budget should reflect $2500 and whoever used those other 80 hours
should have the other $2500 in their budget, not mine. If he wasn't doing
anything at all, then we need to put the $2500 into the general overhead
costs of the firm and have a serious talk with the HR manager about our
staffing practices.

 

[Bmack]

You will probably have to identify them as different
resource types, i.e., Entry level programmer, senior
programmer, Mid-level, etc.

 

[Steve]

I figured out a sort of "hack" way to do it:

In the Resource Sheet I added 3 custom columns, 2 cost and 1 number.

The number field is the project duration in days, calcualted by the formula
[Project Finish]-[Project Start].

The first cost field is salary in days, simply dividing the employee's
yearly salary by 365.

The second cost field is salary cost for the project duration. It it simply
the salary per day times the project duration in days.

To get the differentiation between salaried resources and hourly-rate
resources, you need to make sure that the salaried employees have a standard
rate of 0. Then your hourly resources will show up as the hourly rate times
the number of hours they work on the project, while your salaried resources
will show cost from the start until the end of the project. Note that in the
cost field, the salaried people will show as 9, their cost is in the custom
field mentioned above.

Thanks to folks who replied to this post, I appreciate the ideas.

Steve