Question

You have been asked by management to prepare a report on why the personnel budget has a large negative variance. What information would you include in your report?

Answer 1

Personnel Budget is needed to be maintained by any company that employs personnel. This is so, in order to ensure that, to pay them on a regular basis, sufficient income is always available.

If the personnel budget has a large negative variance, the following facts should be considered in the report

1. Unforeseen variances like major issues with staffing like illness,strikes and rejections, the level of these rejections of the planned cost of employer.

2. Deviation in the cost structure to employees.

3. Any cumulative deviations in the personnel's structured costs

4. Deviations in the planned employer-paid costs, to employee.