Labour cost model

Labour is usually the largest cost line in a professional services business. It's also the one most often forecasted wrong — because it's forecasted as a single number rather than as a plan.

This model treats headcount as the primary driver. Every cost that depends on people — compensation, benefits, employer payroll taxes — flows from a structured headcount plan, not a manual entry. Add a hire date, the model adjusts. Change a rate, everything downstream re-runs.

The result is a cost forecast that moves with the business rather than being reset by hand each month. And because every assumption is explicit, the variance analysis at month-end is a conversation about what changed — not a search for where the number came from.