How Arrange calculates workforce cost

1. Resolve one effective rate for each position

An employee position uses the most specific available annual loaded rate. A direct position override takes precedence over the active rate-card entry. The current Arrange experience supplies a labeled benchmark card as that default. Rates can be effective-dated, so a new rate applies only to the months it covers. An unresolved position remains visibly unpriced.

Contractors use an explicit monthly rate when one is provided. Arrange annualizes that rate by multiplying it by 12 for run-rate comparison. Vendor nodes carry an explicit annual cost. This keeps payroll and non-payroll capacity in the same plan without pretending they share the same source.

2. Apply the position's allocation

Annual position run rate equals annual loaded rate multiplied by FTE allocation. A $200,000 loaded rate at 0.8 FTE produces a $160,000 annual run rate. Headcount counts the seat once, while FTE totals use the 0.8 allocation.

3. Price only the active months

Arrange calculates plan-window cost month by month. Each active month contributes one twelfth of the annual run rate. Months outside a position's effective start and end dates contribute zero. The same rule applies to the applicable rate-card version, so timing changes do not require a manual annualization adjustment.

For example, a $240,000 loaded role at 100 percent allocation has a $240,000 annual run rate. If it starts in July and the plan window ends in December, its plan-window cost is six months multiplied by $20,000, or $120,000.

4. Roll cost through the organization

A team total is the sum of its own spend and every active position, contractor, vendor, and child team beneath it. Arrange calculates annual run rate at the selected reference month and plan-window cost across the full reviewed period. Orphaned or unpriced items remain named findings rather than disappearing from the total.

5. Compare scenarios from a shared base

A scenario begins from a known plan version. Arrange compares additions, removals, moves, rate changes, allocations, and dates before calculating the resulting cost and funding-envelope impact. This makes a lower-cost scenario explainable at the role and team level instead of presenting only a different total.

Benchmark assumptions and limitations

Arrange benchmark v1 is an estimate-grade starting card for 14 roles across four job families, seven levels, and seven currencies. The US anchors are blended planning estimates informed by public salary aggregates and national surveys, then adjusted with an approximate 1.3 to 1.4 loading factor for employer costs and overhead. Level and currency factors are applied and values are rounded to the nearest thousand.

These defaults are not compensation advice, a market survey, or a promise of hiring cost in a location. They exist so a first plan can compute before company data is available. The interface labels their provenance and invites replacement with position-level overrides.

Use current sources when replacing the estimates

Company payroll and benefits data are the best inputs for an operating plan. For an external baseline, the US Bureau of Labor Statistics publishes Occupational Employment and Wage Statistics by occupation and geography, and Employer Costs for Employee Compensation for wages, benefits, and total employer cost. Record the source period, geography, currency, and loading policy beside any rate derived from them.

Use the same assumptions in your planning file

The free headcount planning template includes allocation, dates, annual loaded cost, scenario, and funding fields. When the proposal is ready for review, the funding request template separates annual run rate from plan-window cost and records the rate provenance.