Manpower Budget

Written by True Tamplin, BSc, CEPF®

Updated on July 22, 2022

Definition

Manpower is the most expensive and complex resource in any business.

In a responsibility accounting system, each cost center manager needs to specify the human resources that are available, as well as those that are required, to carry out the operations. For this purpose, a manpower budget is prepared.

Explanation

Employment costs need careful consideration. They are affected by internal factors (e.g., promotions, bonuses, pay rates, and overtime) and external factors (e.g., inflation, taxation, and social security costs).

Plans to increase or decrease manpower will reflect these factors. Creating a detailed manpower budget enables the manager to make the fullest use of existing resources and, through reorganization when necessary, to improve productivity.

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About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.