Entering personnel

Updated on Jul 29, 2016

Putting together your personnel plan is a valuable opportunity to think through your staffing needs, both now and in the future. Depending on how big your company is, you can list every employee by name or title, or you can group them into common roles or departments if that makes more sense. If you have no paid employees (as in an all-volunteer nonprofit group, for example), just skip this step.

You can add employees as direct labor (if their expenses are directly related to revenue) or as regular labor. Use the direct labor option only for personnel whose expenses are directly related to revenue. For example, a factory worker who is paid to assemble products for sale would be direct labor. So would a freelance designer hire to take on contract work from a design agency. The key distinction here is whether you want to treat an employee's expenses as direct costs.

You can also add employees as on-staff hires or contract hires. As you add new hires, their related expenses will be passed automatically to the appropriate forecast tables. If you are a one-person business, remember to include a salary for yourself.

Adding regular labor employees #

  1. Click on the Forecast tab, and choose Personnel.
  2. Click the Add Personnel button:
    add_personnel.gif#asset:988
  3. Select whether you're adding a single employee or a group of employees:

    personnelname.png#asset:1139

    • If you chose Group of employees, enter the number of full-time equivalents (FTEs) you'll be hiring:
      number_hired.gif#asset:1127
  4. Enter a name for the hire (or group of hires) or just a short description, if you prefer:
    namehires.png#asset:1696

  5. Click Next.
  6. Choose Regular labor:
    regularlabor.png#asset:1153

  7. Click Next.
  8. Choose whether you will pay them the same amount each period or a varying amount:
    personnelconstant.png#asset:1697

    • If you chose Constant amount, enter the amount you'll pay them either per month or per year:
      payperemployee.png#asset:1137
      Note: Enter the salary you expect to pay for a single full-time individual in this group. If you are adding a group of employees, we will multiply that by the FTE quantity to calculate the overall salary.

      Then indicate when the employee(s) will start:
      startdate.png#asset:1170
      And, indicate whether you want to include annual raises (and if so, what percent):
      raises.png#asset:1144
    • If you chose Varying amounts over time, enter the salary you expect to pay for a single full-time individual in this group. If you are adding a group of employees, we will multiply that by the FTE quantity to calculate the overall salary.
      varyingpersonnel.png#asset:1698
      Note: You do not need to answer the questions about start date or annual raises if you choose this option, because you will be manually entering annual values (including salary increases) for the next two fiscal years. 
  9. Click Next.
  10. Indicate whether these are on-staff or contract employees.
    onstaff.png#asset:1705
  11. Click Save & Close.

Adding direct labor employees #

Most hires are regular labor. Choose the direct labor option only for personnel whose expenses should be treated as direct costs (that is, they are directly related to revenue).

  1. Click on the Forecast tab, then choose Personnel.
  2. Click the Add Personnel button:
    add_personnel (1).gif#asset:987
  3. Select whether you're adding a single employee or a group of employees:
    personnelname.png#asset:1139
    If you chose Group of employees, enter the number of full-time equivalents (FTEs) you'll be hiring:
    number_hired.gif
  4. Enter a name for the hire (or group of hires) or just a short description, if you prefer:
    namehires.png#asset:1696
  5. Click Next.
  6. Choose Direct labor:
    directlabor.png#asset:1699
  7. Click Next.
  8. Indicate whether you'll pay them the same amount per month/year, varying amounts per month, as a % of overall revenue, or as a % of a specific revenue stream: 
    personnelpay.png#asset:1700
    If you chose constant amount, indicate how much you will pay them (per month or per year), when they will start, and whether you want to include raises for them in the forecast:
    constantpay.png#asset:1701
    If you chose varying amounts over time, enter the amount per month and the overall amount for the upcoming fiscal years:
    personnelvarying.png#asset:1141
    If you chose % of overall revenue, enter the percent of overall revenue they should be paid, when they will start, and whether you want to include raises for them:
    personneloverallrevenue.png#asset:1702
    If you chose % of a specific revenue stream, indicate which stream and what percent of its revenue, as well as when the employees will start and whether you want to include raises for them:
    personnelrevenuestream.png#asset:1703
  9. Click Next.
  10. Indicate whether these are staff or contract roles:
    onstaff.png#asset:1705
  11. Click Save & Close. The employees you just added will be displayed in the personnel table.

Changing the burden rate for on-staff employees #

Salaries and wages are far from the only expenses involved in having employees. Depending on your location, other employee-related expenses may include payroll taxes, worker's compensation insurance, health insurance, and other benefits and taxes. These expenses need to be reflected in your financial projections, but it's not necessary to try to predict these expenses in precise detail. Instead financial plans typically use what's called a "burden" rate. This is just a simple percentage of total employee compensation that is added to cover these related expenses. (Note that the burden rate does not apply to contract workers.) In the profit and loss statement, you can see the calculated amount — total employee compensation multiplied by the burden percentage — on the "Employee Related Expenses" line.  

To change the burden rate:

  1. Click the Change Burden Rate button:
    changeburdenrate.png#asset:1023
  2. Adjust the rate (%) in the overlay:
    burden rate percent.png#asset:1018
  3. Click Save & Close. The rate you entered will be applied to all on-staff hires in your personnel plan.

Understanding head count details #

The Head Count row in the Personnel table shows the total full-time equivalent (FTE) head count of all of the employees you've added to your personnel plan, including contract hires. This row only appears if you've added more than one employee to your personnel plan.

head count row.png#asset:1096
Also, if you have more than one employee in a group, the head count for that group will show in parenthesis next to the group name:

head count column.png#asset:1095 

If you have an employee group with varying numbers over the course of your plan, the Head Count display changes a little. Below is an example group of employees that increases in certain months. The Varying numbers input is used here to enter the number of employees each month:

head-count-varying-group.png#asset:2001

For this group of employees, you can see two changes to the Head Count display below:

  • The Head Count row now shows a different total number of employees each month
  • The overall group head count in parentheses next to the group name is now showing a decimal number. LivePlan has calculated an average number of employees in this group over the length of the plan

head-count-varying-table.png#asset:2002


Editing or deleting personnel #

To edit personnel:

Click on the person or group in the personnel table:

 editpersonnel.png#asset:1073

Make any desired edits in the overlay that appears, and then click Save & Close

To delete personnel:

Click on the person or group in the personnel table:

editpersonnel.png#asset:1073

Hover over the trash can icon, and then click Delete:
delete.png#asset:1682

Click Confirm.
delete personnel confirm.png#asset:1040


Where does this entry appear in the financial statements? #

Regular labor and direct labor entries appear in two different locations on the Profit and Loss, because they calculate into your margin differently. A regular labor personnel entry will calculate into Operating Expenses, as shown below:

personnel-regular-pandl.png

###pWhere is my direct labor shown in the Profit and Loss statement?

personnel-direct-pandl.png

In the Balance Sheet, your personnel entries calculate as a negative number in your Assets. And then, because the Balance Sheet always has to be in balance, this value will also appear in the Liabilities and Equity portions of the table. In the example below, the forecast contains only two personnel entries (one regular labor and one direct labor), to more clearly represent where it appears in the calculations:

personnel-balance-sheet.png

In the Cash Flow table, your personnel entries are calculated into the lines below:

personnel-cash-flow.png