How could HR department justify their service cost in a small to mid size company?

Riyadh Salih Saskatchewan, Canada

since HR department don't produce any tangible assets or any production, what cost center their expenses should be charged to?

Posted: Jan 23, 2018 12:31 AM

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Rami Kaibni

Community Champion

Senior Projects Manager | Field & Marten Associates New Westminster, British Columbia, Canada

If you have an HR dpt., there should be a proper cost code and allocation for their expenses either as overheads or certain distribution among various projects.

Posted: Jan 23, 2018 1:21 AM

Sante Delle-Vergini, PhD Senior Project Manager| Infosys Melbourne, Victoria, Australia

It's normally justified into accounts with the finance department.

Posted: Jan 23, 2018 2:04 AM

Sonali Malu Maharashtra, India

Very good article just published:
https://www.projectmanagement.com/articles...t-of-the-Future

Posted: Jan 23, 2018 4:40 AM

Kiron Bondale Retired | Mentor| Retired Welland, Ontario, Canada

Riyadh -

Either overhead expenses for the company as a whole or allocated proportionally to lines of business as Rami has indicated.

Kiron

Posted: Jan 23, 2018 7:56 AM

Drew Craig Sr. Agile & Product Coach| Vanguard Philadelphia, Pa, United States

There should be a budget allocated for HR [ideally]. Each fiscal year should build budgetary structures for each department. Leadership in each department would lead these activities with the support of the areas leader's within the department.

Posted: Jan 23, 2018 9:05 AM

Jorge Lamadrid PMP, PMI-ACP, PMI-PBA , Peruvian-Spanish-Mexican| architect Lima, Peru

Good question Riyadh.

As said by our PM colleagues, in my opinion it should be ideally structured & planned (budget) at the beginning of each year... either as part of the general costs (support) of the company or dispersed between the costs of different projects.

But what about if the Company has a Sales Area 80% and a Project Area 20% and many consultants rotate in the sales area?

Also you have to be ready to CHANGE the plan because NEW projects may appear requiring EXTRA resources which where not planned... and these resources may be just necessary for the specific projects or they may be incorporated in the "permanent" structure of the company depending on STRATEGY.

Posted: Jan 23, 2018 10:29 AM

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How could HR department justify their service cost in a small to mid size company?

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