Focus on personnel cost planning: Controlling or HR - who holds the reins?

Personnel cost planning is one of the most important tasks in corporate management, but the decision as to which department it should be assigned to is often controversial. One of the key questions is which department - HR or Controlling - is responsible. In this blog article, we look at the advantages and disadvantages of both approaches and how effective collaboration between the departments can be achieved.

Who is responsible for personnel cost planning?

Experience shows that the responsibility for personnel cost planning lies with the HR department in 90% of cases, while only 10% leave this task to Controlling. This distribution clearly shows that HR is traditionally seen as the guardian of personnel cost planning, but why is this the case?

Advantages if the HR department carries out personnel cost planning

The HR department has direct access to employee master data and is therefore ideally positioned to incorporate accurate and confidential data into planning. This includes information that is often not accessible to Controlling. In addition, the HR department can react quickly to changes and requirements in the personnel area, for example when implementing recruiting measures. This ensures that personnel cost planning is always up to date.

Advantages when controlling takes over personnel cost planning

On the other hand, Controlling often has a greater affinity for data and extensive planning expertise. Overall responsibility for the profit and loss account also lies with Controlling, which means that this department has a strong interest in clear and precise personnel cost planning. Controlling can thus ensure that personnel costs are in line with the company’s overall financial targets. This minimizes the risk of, for example, over-spending on personnel costs.

Cooperation between HR and Controlling

In practice, however, HR and Controlling often hardly ever work together. Ideally, Controlling would set the requirements for the level of detail in planning and the HR department would implement them. For integrated planning, data must be exchanged between the departments, which often fails in practice. Data is usually exchanged using simple tools such as Excel, although there is a desire for specialized software solutions such as QVANTUM. The HR department is usually responsible for the operational implementation of personnel cost planning, while the controlling department is responsible for integration into the P&L. This division of tasks can lead to challenges, especially when it comes to Controlling’s knowledge and understanding of specialized HR topics.

Challenges and solutions

If the HR department is responsible for personnel cost planning, additional planning expertise often needs to be built up. Ready-made software solutions can be a considerable help here. On the other hand, controlling must acquire in-depth knowledge of HR-specific topics if it takes over personnel cost planning. This creates different challenges on both sides.

Influence of corporate strategy and culture

The decision as to which department is responsible for personnel cost planning is strongly influenced by the corporate strategy and culture. An important aspect here is data governance, i.e. the question of who is allowed to see which data. As Controlling already knows a lot of data, salary data management often remains with the HR department.

The role of technological tools

Technological tools play a key role in personnel cost planning. Many small and medium-sized companies still use Excel, but the implementation of specialized software solutions will become increasingly necessary in the future. In most cases, the HR department manages this software. As the market becomes increasingly complex, smart all-in-one software solutions such as QVANTUM are the concept of the future.

Data verification and updating

Personnel cost planning is typically reviewed and updated one to four times a year. The data is then stored in the P&L by Controlling and compared with the actual status on a monthly basis, whereby the HR department often receives no feedback on this data. This process is very confusing, as the departments only work for themselves without checking the details or providing feedback. Similar to the lack of communication between two spouses, there needs to be much more collaboration.

Conclusion

Whether the HR department or Controlling should take over personnel cost planning cannot be generally determined. Both departments have their own expertise. However, close cooperation and the use of specific tools can help to make personnel cost planning more effective and efficient. Ultimately, it is up to the company management to find the best solution for their specific environment.

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Do you want to delve deeper into the topic of personnel cost planning? This blog post deals with the 5 biggest stumbling blocks in personnel cost planning: https://getqvantum.com/blog/stolpersteine-der-personalkostenplanung/