In pursuit of profit, the head of the enterprise should not forget about the team of specialists and ordinary workers who help build his thriving business. The highest degree of reward and praise for diligence and work for them is, oddly enough, wages. A good leader who really appreciates the work of his subordinates is not sorry for any funds in gratitude for achieving his goals. However, sadly, the money funds reserved for labor have the property of running out. Only by performing an analysis of the wage fund can we understand how efficiently these funds were used, and where their overruns or savings came from.
Remuneration is the employee’s reward (in cash or in kind) for the mental or physical labor he has invested in creating the enterprise’s products.
The wage Fund is the total wage of all employees of the organization, expressed in cash. Salary refers to expense items that reduce profits, and depending on the type of activity can reach half of the total cost of the enterprise. In addition to the salary, it includes: bonuses and employee benefits, various compensations for harmful working conditions, scholarships, overtime, pay for downtime, as well as social and pension contributions, payment of holidays, permits and other payments.
Analysis of the use of the wage fund is performed in the same scenario as the analysis of other categories of expenses of the enterprise. After collecting all the necessary information, including planned indicators, we study the data characterizing the level and dynamics of the expenditure of the fund for the enterprise as a whole and for the categories of employees. Here it is worth paying attention to the remuneration of laborers and time-attendants, as well as senior staff, specialists, workers, maintenance personnel.
The reasons for the cost overruns or cost savings from the pieceworkers should be sought in the incorrectly established rates of production and rates for work. Carrying out the analysis of the payroll of time workers, it should be borne in mind that inaccurately calculated labor intensity of work can lead to an overestimation of their number. An increase in the share of senior staff and specialists can not always affect productivity growth, but it is clearly manifested in the cost overrun for their payment.
Analysis of the use of the wage fund should include studies of its structure, changes in the level and dynamics of the categories of payments. Here you can make a division into a variable part, which reflects wages at piece rates and bonuses, and a permanent part, which includes time-wages and various surcharges. Particular attention is paid to non-production payments, including overtime work, payment of forced downtime, time spent on marriage. In most cases, it is here that it is worth looking for the reasons for the unjustified increase in wage overspending.
For a more in-depth study and the identification of causal relationships with other factors affecting the deviation of labor costs from planned indicators, performing analysis of the wage fund, you can use factor analysis. Here we study the impact on changes in salary items of costs of such economic phenomena and processes as the introduction of new technologies, labor organization, product structure, and selling prices.
To reflect the general indicator of the effectiveness of the fund’s expenses, one golden rule should be known - the dynamics of the growth of enterprise income from increased labor productivity should exceed the dynamics of growth of labor costs at a faster pace. Therefore, indicators of the dynamics of wages should be correlated with data characterizing the profitability of production and labor productivity for the enterprise, for units and for main types of products. Calculation of indicators of economic efficiency of labor remuneration is carried out by the ratio of the amount of revenue (profit, gross output) of an enterprise or unit to the amount of wages of personnel of this unit.
The analysis of the wage fund should not become the reason for the decrease in the paid remuneration to employees of the enterprise, because this can cause a decrease in the share of the stimulating component of labor remuneration, respectively, a decrease in labor productivity and, as a result, lead to the loss of part of the profit of the enterprise.
