Dont Leave Out the Cost of Staffing the Project

A big mistake—which, unfortunately, is made on a routine basis—is leaving out the cost of internal staff in the project budget. The usual justification for this folly is that "these workers are free to the project because their salary is a constant." But this statement would be true only if salaried employees had infinite hours available to work on projects. Including internal labor cost in a project budget is necessary to build the kind of realistic budget that will allow management to choose among multiple project opportunities.

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