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Managing Department Personnel Costs

How does your company manage situations like this -

An employee with a salary of 125K leaves the IT department and is replaced by an employee making 80K. Do you have a process that puts the difference of 45K into a bucket that becomes available for the CIO to use in the future to adjust other salaries?

Or if the same department was given a Promotion/Equity pool of dollars but it was not used, is there a process to bank that money for future use by that department?

Thank you for your feedback.

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

The answer is yes and no. It all depends on your company, the budget process, the current financial position, and lastly the culture.

In a perfect world (or at least my perfect world) the CIO would have that money to spend on salaries (bonuses would need further approval, as would raises). So, if they were able to hire someone for let's say 40K, that would essentially cover the spread plus benefits...

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