TeamOhana's budget envelope feature enables Finance teams to set parameters around which hiring managers and department leaders can build and execute on their hiring plans and merit cycles.
Creating budget envelopes
A new budget envelope can be created under Settings > Budget Envelope. Note that this page will only be accessible to users with the "Manage budget envelope" permission.
To create a new budget, you will be required to enter a budget name, and assign it to a fiscal year. At this time, budgets cannot be created for quarters. You will the be asked to choose between Total budget and New hire for your budget class:
Total budget will ask you to input your overall headcount budget, and it will automatically calculate your new hire budget based on your current employee costs and, if applicable, your merit cycle budget
New hire will only ask you to input your new hire budget and will not take into account current employee costs or merit cycles
Building your Total budget envelope
After you've selected "Total budget" as your budget class, given your envelope a name, and selecting the fiscal year, you'll have the option to either input your FY budget or your Annual budget (you do not need to provide both). Regardless of which budget you input, the table at the bottom of the page will automatically populate based on your other costs.
Total budget (FY): the number you input in the FY budget field
Current emp cost (FY): the fully-loaded cost of your existing, in-seat employees. This number will match the cost of Current Employees on the headcount tab
Eligible emp / Merit increase % / Merit increase budget (FY) are all fields that pertain to the Merit increase criteria. In the screenshot above, we've skipped the Merit increase criteria section, so those fields remain unchanged
TBH Cost (FY): this number is the fully loaded cost of the open headcount on your hiring plan in TeamOhana
New hire budget (FY): this number is calculated by subtracting your Current emp cost (FY), your TBH Cost (FY), and your Merit Increase budget (FY) from the Total budget (FY). In the example above, $750,000,000 - $123,488,469 - $4,282,330 = $622,229,201
Let's review another example, this time after adding in Merit increase criteria:
This time, our new hire budget is slightly lower because we have another input (merit increase budget) that we are subtracting from the total budget.
Eligible emp: In the Merit increase criteria section, we've input that only full time employees who started before 1/1/23 are eligible for a merit increase. The number 332 is automatically calculated based on this criteria
Merit increase %: this comes directly from the Merit increase % we entered in the criteria section
Merit increase budget (FY): this number is calculated based on the number of eligible employees, the percentage increase we're budgeting for, and the effective date of 7/1/24
New hire budget (FY): now we've introduced the merit increase budget, so our new hire budget is $750,000,000 - $123,488,469 - $4,282,330 - 4,891,862 = $622,229,201
A note about the TBH cost (FY) field: there are three possible outcomes for the TBH roles that we account for in the budget envelope:
TBHs are hired before the end of the FY, in which case the TBH cost is reallocated to the Current emp cost field
TBHs are not hired before the end of the FY, and the start date of the role is updated to the next fiscal year, in which case the TBH cost is reallocated to the New hire budget
TBHs are not hired before the end of the FY, and the role is scrapped and removed from the hiring plan, in which case the TBH cost is reallocated to the New hire budget
After you've input all criteria and are satisfied with your budget, click "Create."
If you would prefer just to build a budget for your new hires, you'll select the "New hire" budget class.
Building your New hire envelope
After you select "New hire" as the budget class, you'll give your budget a name and select the fiscal year it will be applied to.
Similar to the Total budget envelope, you will be asked to input your FY budget or your Annual budget, but you do not need to provide both. New hire cap is also optional.
At this point, you can save your company-wide new hire budget, or you can proceed to distribute it by division or department.
The creation of both your overall budget, as well as the distribution across divisions/departments, will likely happen outside of TeamOhana in your FP&A tool. Once the distribution is set, it will be entered into TeamOhana manually.
If the total headcount or the total budget across divisions/departments exceeds the overall caps that were set, you will see an error message.
After you've distributed your budget across your divisions or departments, click "Create."
Budget envelopes across the platform
Once your budget is created, it will be present for those with the 'view budget' permissions in the Scenarios module (when available) and the Budgets & Forecast tab. If a merit increase budget was created as part of the Total budget, that will be visible for users with access to the Comp cycle module.
Your new budget will also default to the "Active" status. Active budgets can be archived, or set as the "Primary" budget, which means it will be the default budget that all users with "View budget" permissions will see in the UI.
When a budget is active, it will appear both on the Budgets & Forecast tab, as well as in any new Scenarios that users create.
In Budgets & Forecast, the budget will appear on the Budget tile in large text; the budget that has been used to date will appear underneath it
Variance will calculated based on the budget cap when its available, and on budget used if it's not
In Scenarios, the budget sits across the top of the screen and provides guidance as the user builds their headcount plan
Budgets follow ABAC, so department heads with access only to their own department will only have access to their own department's budget. This also means that if budgets are set at the division level, department leaders will not see the budget in the UI.
Budget permissions
There are four permissions on the user role level that allow or deny access to budgets in TeamOhana:
Manage Budget envelope gives users the ability to create new budgets via Settings, as well as designate budgets as 'primary' or inactive
View headcount budget gives users visibility into budgets (within their ABAC scope) but does not allow users to create or edit budgets
Edit headcount budget allows users to edit the budget details tab of headcount
View Budget FY impact gives users visibility into the Budget FY Impact column on the Budgets & Forecast tab, but they cannot make edits to the budget
