Budgeting For Human Resource Costs

By Eric Johnson, World Bank Institute (WBI); Sherine Ghoneim, Economic Research
Foundation (ERF); Margaret Nyrambura Ndung'u, EcoNews Africa; Sangeeta Gupta, The
Energy and Resources Institute (formerly the Tata Energy Research Institute) (TERI)
May 2001

The information technology field is growing rapidly and there is a need to continuously update
human resource skills in order to tackle emerging issues and challenges effectively and
efficiently. There are so many activities under the umbrella of information technology, all of
which are crucial and important. During the budgeting and financing for human resources, the
amount allocated for HR activities is often underestimated and hence under-budgeted. Due to the
nature of information technology, research and development should be considered in the
financing and budgeting. To remain relevant and up-to-date, a lot of research is crucial and
appropriate for the development and implementation of changes. This is normally a hidden cost,
which might not be well pinned down and budgeted for appropriately.

Human resource costs should be financed and budgeted for within the overall Web budget. For
the purpose of this discussion, human resources are classified in terms of time required for the
various Web activities. When budgeting and financing Web products and services, human
resource time should be considered under the following broad categories.

Planning

A lot of time is needed to plan for the Web products and services. The time taken to do the
planning should be budgeted for and financed. Emphasis should be laid on to details to ensure
that no activity is overlooked during the planning phase. The issues to be addressed under
planning include:

• market research on options available and the associated cost of each;

• negotiations and discussions with the ISPs (currently in Kenya there are over
40 licenced ISPs operating at valid efficiencies); and
• making decisions and engaging the relevant people.

Developing Web tools

Once the plan is in place, time is needed for developing the Web tools. This could be time
needed to lay out the cables and configuration, time needed to program and customize a database
or even time taken to design interactive Web tools such as online forms. This activities requires
different skills, time required is quite unpredictable and the resources not always there.
Maintenance of Web tools

Once the tools have been developed, there is a need to strategically maintain them ensuring that
they retain the relevance intended and meets the initial needs. Maintenance includes consistent
updating of the content and reprogramming to meet the market demands bearing in mind the
drastic changes in the ISP industry.

Training and developing training kits

Once everything is in place, there is a need to train and spread the knowledge to all the
stakeholders. For this to happen, training tools needs to be developed.

Human resources can be classified in the following broad categories:

• Webmasters;
• database managers;
• programmers;
• technical manager;
• graphic designer;
• system administrator;
• content and editorial staff;
• marketing and public relations staff;
• interns and volunteers; and
• research and development staff.

The above staff has various duties in the organization. These include:

• setting and configuration of the hardware and software (including the server,
scanner, routers and hubs);
• hardware and software needs planning;
• creation of a database, java scripts/programs and HTML scripts;
• planning for the appropriate design and display of content;
• negotiations and agreements with vendors, consultants, policy and technical
experts; and
• research on Web content and emerging issues.

When financing and budgeting for the human resources, there are a number of issues to be taken
into account. They include:

• the purpose of the Web products and services;

• the intended audiences;
• project length (assuming it is a project which has a specific beginning and
end);
• available hardware and software resources; and
• complexity of Web resources.
Having a clear idea of the above, then a decision has to be made as whether to have in house
resources or contractual. In line with the above points, the decision will also be based on how
complex the various intended activities are. For instance is it just HTML or there are databases
and java components to be included?

In each of the category to be chosen, there are other issues to be considered. These issues
include:

• the budget line for the full-time employee;

• the rent for hosting the equipment in case a separate house is required;
• how often the site should be updated;
• the unit cost of each update of the Web and database;
• the level of access to the servers and the associated cost; and
• extent of contribution to the site layout and design.

Human resources could be charged as a percentage of the budget, as part of administrative and
operational costs or fundraising could be done to cover these particular activities. It is important
to come up with realistic timings for the various Web activities. Most of the time, the activities
are normally under budgeted due to lack of realistic timings.