Which method focuses on a workforce's cost by multiplying the number of employees with the cost per employee?

The method that centers on evaluating workforce costs by taking the number of employees and multiplying it by the cost incurred per employee is the cost-per-employee method. This straightforward approach allows organizations to gain a clear and direct insight into their labor-related expenses, making it an effective tool for budgeting and financial planning.

This method is particularly beneficial for organizations that require a quick calculation of workforce costs without delving into more complex factors. By simply determining the total employee count and knowing the average cost attributed to each employee—such as salary, benefits, and other ancillary costs—managers can efficiently aggregate costs to support decisions related to human resource allocation, budgeting, and forecasting.

In contrast, the ground-up method involves constructing budgets from the lowest operational level, typically requiring more detailed data and a comprehensive understanding of all organizational components. The historical cost method primarily focuses on past expenditures without projecting future implications, which may not accurately reflect current or future workforce costs. Activity-based costing allocates overhead and indirect costs to specific activities based on their use, providing a more detailed approach but often introducing additional complexity.