Calculating Success: Mastering the Estimation of Staff Costs in Your Industrial Feasibility Study

Staff costing refers to the process of estimating the total cost of staff in the year and consists of the basic salaries and benefits. The staff cost is a significant component of the overall manufacturing operating costs, and its percentage of the total cost varies depending on the nature and size of the business, location, level of technology, and more. Estimating the staff cost will be helpful in estimating the total cost and profitability.

Step-By-Step Process

• Clarify the business and technical requirements and plans.
• Clarify the personnel system, including the roles, grades, salaries and benefits, and headcounts.
• Develop a system of job grading and align it with the compensation and benefit details.
• Calculate the staff cost for a year and project it for (5-10) years.

Example

Here is the staff cost projection (In $) for a pharmaceutical manufacturing facility:

Department	Role & Grade	Total Staff	Yr. 1	Yr. 2	Yr. 3
Production	Factory Director- G10	–	–	–	–
	Dept. Manager- G9	2	166,860	172,260	177,930
	Section Head- G8	2	148,320	153,120	158,160
	Senior Engineer- G7	–	–	–	–
	Engineer/ QC Inspector- G6	1	55,620	57,420	59,310
	Senior Officer- G5	–	–	–	–
	Officer- G4	–	–	–	–
	Supervisor- G3	1	22,248	22,968	23,724
	Technician/ Skilled labour- G2	24	355,968	367,488	379,584
	Unskilled Labour- G1	15	111,240	114,840	118,620
	Sub- Total	45	860,256	888,096	917,328
Laboratories: R&D and QC	R & D Manager- G9	1	83,430	86,130	88,965
	QC Manager- G9	1	83,430	86,130	88,965
	Section Head- G8	2	74,160	76,560	79,080
	Senior Lab. Analyst- G7	2	64,890	66,990	69,195
	QC Lab. Analyst- G6	4	166,860	172,260	177,930
	Lab. Technician- G2	2	14,832	15,312	15,816
	Unskilled Labour- G1	2	7,416	7,656	7,908
	Sub- Total	14	495,018	511,038	527,859
Quality Assurance	QA Manager- G9	1	83,430	86,130	88,965
	QA Inspector- G6	2	64,890	66,990	69,195
	Sub- Total	3	148,320	153,120	158,160
Stores	Stores Manager- G9	1	83,430	86,130	88,965
	Technician/skilled labour- G2	5	59,328	61,248	63,264
	Unskilled Labour- G1	4	14,832	15,312	15,816
	Sub- Total	10	157,590	162,690	168,045
Sales & Marketing	Sales & Marketing Manager- G9	1	83,430	86,130	88,965
	Sales & Marketing Officer- G4	2	27,810	28,710	29,655
	Senior Sales & Marketing Officer- G5	2	37,080	38,280	39,540
	Sub- Total	5	148,320	153,120	158,160
Adm. & Finance	Adm. & Finance Manager- G9	1	83,430	86,130	88,965
	Section Head- G8	–	–	–	–
	Senior HR Officer- G5	1	37,080	38,280	39,540
	HR Officer- G4	1	–	–	–
	Administrator Officer- G4	2	27,810	28,710	29,655
	Senior Accountant- G5	1	37,080	38,280	39,540
	Accountant- G4	1	27,810	28,710	29,655
	Senior Procurement Officer- G5	1	37,080	38,280	39,540
	Procurement Officer- G4	1	–	–	–
	Senior IT Officer- G5	1	37,080	38,280	39,540
	IT Officer- G4	1	–	–	–
	Secretary- G3	2	22,248	22,968	23,724
	Senior Secretary- G4	1	–	–	–
	Representative- G3	2	22,248	22,968	23,724
	Office Helper- G1	3	7,416	7,656	7,908
	Utility Technician- G2	2	–	–	–
	Utility Helper- G1	2	–	–	–
	Driver- G2	4	29,664	30,624	31,632
	Sub- Total	27	368,946	380,886	393,423
Management	General Manager- G10	1	111,240	114,840	118,620
	General Manager Assistant- G9	–	–	–	–
	Financial Controller- G9	1	–	–	–
	Legal Advisor- G9	1	–	–	–
	Sub- Total	3	111,240	114,840	118,620
Total		107	2,289,690	2,363,790	2,441,595

Useful Tips

• While you estimate the staff cost, consider the annual increments of the staff’s basic salaries and expansion plans.
• Obtain staffing costs from similar practices.

Things To Avoid

• Avoid guessing works and assumptions without evidence.

Final Note

This article is sourced from my new book- Your Guide For Preparing An Industrial Feasibility Study. 

For more information about the book: https://growenterprise.co.uk/book-your-guide-for-preparing-an-industrial-feasibility-study/

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Or email us at: maldawood@growenterprise.co.uk

The author: Munther Al Dawood- Industrial Enterprise Expert

http://www.growenterprise.co.uk