Analysis of the wage fund

In pursuit of profit, the head of the enterprise should not forget about the team of specialists and ordinary workers who help build his prosperous 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 does not regret any means of gratitude for achieving his goals. However, regrettably, the money funds reserved for labor have the property of ending. Only by performing an analysis of the wage fund, you can understand how effectively these funds were used, and where their overspending or savings came from.

Remuneration of labor is an employee's reward (in cash or in kind) for invested mental or physical labor in the creation of the enterprise's products.

The wage fund is the total wage of all employees of the organization, expressed in monetary terms. Salary refers to items of expenditure that reduce profits, and depending on the type of activity, it can reach half of the total cost of the enterprise. In addition to salary, it includes: bonuses and employee benefits, various compensations for harmful working conditions, scholarships, overtime work, payment for downtime, as well as social and pension contributions, holiday pay, permits and other payments.

Analysis of the use of the wage fund follows the same scenario as the analysis of other categories of costs of the enterprise. After gathering all the necessary information, including planned indicators, the data characterizing the level and dynamics of the fund's spending for the enterprise as a whole and for the categories of employees are studied. Here it is worth paying attention to the remuneration of the work of pieceworkers and peremennikov, as well as the management staff, specialists, workers, maintenance personnel.

The reasons for the overexpenditure or the saving of the means of wages for pieceworkers should be looked for in improperly established norms of production and prices for work. Carrying out the analysis of the wage fund of the perpetuals , it should be borne in mind that inaccurately calculated labor input can lead to an overestimation of their quantity. The increase in the share of managers and specialists may not always affect the growth of productivity, but clearly manifests itself in the over-expenditure of funds 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 it is possible to divide the variable part reflecting the pay for piece-rate pricing and bonuses, and a permanent part, including the payment of labor of the perpetrators and various surcharges. Particular attention is paid to non-productive payments , including overtime, payment of forced downtime, time spent on marriage. In most cases, it is worthwhile looking for the reasons for the unjustified growth of the wage overexpenditure.

For more in-depth research and identification of cause-effect relationships with other factors influencing the deviation of labor costs from planned targets, performing an analysis of the wage fund, you can use factor analysis . Here, the impact on the change in salary articles of the costs of such economic phenomena and processes as the introduction of new technologies, the organization of labor, the structure of products, and the prices of sales are studied.

To reflect the overall indicator of the effectiveness of the fund's expenses, one golden rule should be known - the dynamics of the company's income growth from the increase in labor productivity should exceed the growth rate of labor costs faster than the growth rate. Therefore, indicators of wage dynamics should be correlated with data characterizing the profitability of production and labor productivity by the enterprise, by divisions and by main types of products. Calculation of indicators of economic efficiency of wages is conducted by the ratio of the amount of revenue (profit, gross output) of the enterprise or division to the amount of staff salaries of this unit.

The analysis of the wage fund should not cause the reduction of the award paid to the employees of the enterprise, because this can cause a decrease in the share of the stimulating component of wages, thus a decline in labor productivity and, as a result, lead to the loss of part of the enterprise's profit.