When reviewing most Profit & Loss statements, one fact quickly emerges: people are expensive. In many sectors, personnel costs can climb to 50 to 70 percent of total business expenditures, reaching even higher levels in labor-intensive industries. If you fail to plan these costs accurately, you are managing your biggest expense based purely on intuition.
This is where Oracle Planning and BudgetingCloud (PBC), a leading Enterprise Performance Management (EPM) solution,provides the necessary structure. Below are the core reasons why organizationsshould conduct their Workforce Planning within Oracle PBC.
1. Personnel Costs Dominate OperationalExpenses
Depending on the industry, 50% to 70% ofoperational costs are often related to personnel: salaries, bonuses, benefits,pensions, insurance, training, overtime, and more.
When a single cost item holds such a largeshare, minor changes have a significant impact on EBIT, Cash Flow, andcompany valuation. Oracle PBC transforms personnel costs from being aresult of fragmented HR decisions into a strategic control variable.
2. Workforce Costs Are InherentlyDriver-Based—A Perfect Fit for Oracle EPM
From a modeling perspective, personnel costsare structurally clear and logical:
Total Personnel Costs = FTE * Labor Cost per FTE
The labor cost per FTE can be detailed furtherinto components like base salary, bonus, employer taxes, pension, insurance,allowances, overtime, and other costs.
Oracle PBC is purpose-built for this type of driver-basedplanning. The dedicated Workforce Module allows planning byemployee, job title, job group, or various aggregation levels, with built-incalculations for salary components and employer burden. You can start simplywith basic drivers like FTE and average salary, and later expand to complexmodels specific to country, function, or contract type.
The results from the Workforce model areseamlessly integrated into the budgeted P&L within PBC or can be reportedexternally.
3. ERP and HCM Record Reality; Oracle PBCSimulates the Future
ERP and HCM systems, such as Oracle Fusion ERPand Oracle HCM, are excellent at recording transactions, contracts, and payrolldata. However, they are not designed for extensive planning, modeling, and what-ifanalyses.
Oracle PBC provides these essentialcapabilities, offering scenario analysis, driver-based models, andflexible planning structures that integrate HR data with financial impact. This allows you to answer crucial strategicquestions:
- What if we postpone hiring for six months?
- What is the financial impact of performance-based salary increases?
- What happens to costs and cash flow if we implement a company reorganization?
These analyses are difficult or impossible intraditional transactional systems but are standard functionality within OraclePBC’s Workforce Planning.
4. Finance and HR Finally Plan Using the SameData
A common challenge is that Finance and HR oftenhold different views on headcount and personnel costs. Oracle WorkforcePlanning is specifically designed to unify these two domains.
HR manages assumptions like headcount, startdates, absenteeism, and attrition. Finance manages annual indexation,collective labor agreement (CLA) increases, bonus pools, and financial targets.In Oracle PBC, both departments collaborate within the same model, usingthe same drivers and resulting in consistent output for the P&L, BalanceSheet, and Cash Flow statement.
5. Insight into the Full Cost of an Employee,Not Just the Salary
Many organizations still approach personnelplanning as "last year's salary plus a 2% indexation," considering itsufficient. In reality, the calculation is far more intricate.
With Oracle PBC, you can model and report allcost components separately, allowing you to understand better which costsare increasing, why, and how to influence them. This also enables more accurateproject pricing based on fully burdened labor costs.
6. Faster and More Reliable Budget Cycles ThanSpreadsheets
Too many organizations still rely on Excel for workforceplanning, leading to familiar issues: version control chaos, errors, slowcalculations, and unwieldy files.
Oracle PBC automates and centralizes theseprocesses. Driver-based calculations, workflows, audit trails, and integrationsensure shorter planning cycles, less manual work, and more transparency.What-if analysis and scenario creation are integrated, eliminating thedependency on complex, error-prone Excel models.
7. Integrated Calculation Across P&L,Balance Sheet, and Cash Flow
Personnel decisions impact much more than justthe expense line on the P&L. They affect revenue, operating costs,capitalized labor costs for projects, provisions, and cash flows.
Because Oracle PBC plans all financialstatements in an integrated manner, changes in headcount or salaries areautomatically reflected across the P&L, Balance Sheet, and Cash Flow. Thisguarantees that your financial and operational plans are always consistent.
8. Support for Multi-Year and StrategicPersonnel Planning
Workforce issues are becoming increasinglystrategic: reskilling, automation, nearshoring, talent programs, anddigitalization. Oracle Strategic Modeling within Cloud EPM providespowerful tools for multi-year scenarios and long-term planning, including labormarket and cost scenarios.
This capability allows you to link your workforceplans directly to strategic objectives, revealing the cost structure andfinancial performance implications of various future scenarios.
9. Cloud Scalability, Governance, and LowerTotal Cost of Ownership (TCO)
Oracle PBC operates entirely in the cloud,offering automatic updates, inherent scalability, and eliminating the need forlocal infrastructure. Role-based security, audit trails, and workflowsensure governance and compliance—a necessity for handling sensitive personneldata.
10. Simple, Granular Security: Detailed Datafor Some, Aggregated Figures for Others
Personnel data is highly sensitive, requiringstrict user separation. Oracle PBC simplifies the configuration of detailedsecurity rules for Workforce Planning.
You can define access so that only authorizedusers (e.g., HR Business Partners or Controllers) can view and adjustindividual salaries and employee-specific costs. Managers can be restricted toseeing only aggregated information, such as total personnel costs or total FTEcounts, without access to confidential details.
Additionally, access can be configured perdimension (read, write, or no access): entity, cost center, country, job group,or even individual employee. All changes are logged via audit trails,ensuring you always know who made which adjustment, which is critical forcompliance and controlled access.
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