How To Calculate New Hire Location Factor in PeopleSoft | Arithmix

Calculating the new hire location factor is an important task for any organization that has employees working in different locations. It helps to determine the appropriate compensation for new hires based on the cost of living in their location. In this article, we will discuss what the new hire location factor is, when it is valuable to calculate it, and how to calculate it.

What Is New Hire Location Factor?

The new hire location factor is a percentage that is added to the base salary of a new hire to account for the cost of living in their location. This factor is calculated based on the difference in the cost of living between the location of the new hire and the location of the company's headquarters. The higher the cost of living in the new hire's location, the higher the new hire location factor will be.

For example, if the cost of living in the new hire's location is 10% higher than the cost of living in the company's headquarters, the new hire location factor would be 10%. This means that the new hire's base salary would be increased by 10% to account for the higher cost of living in their location.

When Is It Valuable To Calculate New Hire Location Factor?

The new hire location factor is valuable to calculate when an organization has employees working in different locations with varying costs of living. This is especially important for companies that have a large number of remote employees or employees working in different countries.

Calculating the new hire location factor ensures that new hires are compensated fairly based on the cost of living in their location. It also helps to attract and retain talent in different locations by offering competitive compensation packages.

How To Calculate New Hire Location Factor

Calculating the new hire location factor involves several steps:

1. Determine the cost of living index for the new hire's location and the company's headquarters.
2. Calculate the difference in the cost of living index between the two locations.
3. Divide the difference by the cost of living index for the company's headquarters.
4. Multiply the result by 100 to get the new hire location factor as a percentage.

For example, if the cost of living index for the new hire's location is 120 and the cost of living index for the company's headquarters is 100, the difference would be 20. Dividing 20 by 100 gives a result of 0.2. Multiplying 0.2 by 100 gives a new hire location factor of 20%.

It is important to note that the cost of living index used should be specific to the new hire's location and not a general index for the country or region. This ensures that the new hire location factor accurately reflects the cost of living in the new hire's specific location.

In conclusion, calculating the new hire location factor is an important task for any organization with employees working in different locations. It ensures that new hires are compensated fairly based on the cost of living in their location and helps to attract and retain talent in different locations. By following the steps outlined in this article, you can easily calculate the new hire location factor for your organization.

How Do You Calculate New Hire Location Factor in PeopleSoft

PeopleSoft itself isn’t naturally geared towards letting you calculate complex metrics like New Hire Location Factor. As an alternative, teams typically use products like Arithmix to import data from PeopleSoft and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like PeopleSoft, combine it with data from other systems, and create calculations like New Hire Location Factor.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating New Hire Location Factor in Arithmix

Calculating metrics like New Hire Location Factor is simple in Arithmix. Once you've created your free account, you’ll be able to import your PeopleSoft data, and use it to create natural language formulas for metrics like New Hire Location Factor.

Arithmix is designed to give you the power to build any calculations you want on top of your PeopleSoft data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.