Configure hourly rates in cost framework

Learn how to set the average hourly rate used to convert hours saved into financial savings in the Cost Framework.

Before you begin

Role required: AI steward (sn_ai_governance_ai_steward)

About this task

The hourly rate is the foundation of the Cost Framework. The average hourly rate represents the fully-loaded cost of an average employee (including salary, benefits, and overhead) divided by annual working hours. It converts productivity hours (hours saved through AI automation) into financial savings.

Formula: Money Saved = Hours Saved × Average Hourly Rate

Procedure

1. Navigate to All > AI Control Tower > Settings > Rules and Templates > Cost.
2. Select Configure in the Value and cost configuration card under the Cost setup section.
3. In the selected Configure hourly rates section, locate the Average hourly rate field.
   Determine the correct hourly rate for your organization. To calculate Average hourly rate:

   1. Gather total annual cost of labor including salaries, benefits, payroll taxes, overhead allocation, and benefits.
   2. Calculate total annual working hours (typically 2,000-2,080 hours for full-time employees)
   3. Divide total cost by annual hours

   Example: If total annual labor cost is $100,000 and annual working hours are 2000, hourly rate = $100000 / 2000 = $50/hour

   Note:

   Enter the rate in your organization's local currency.
4. With Set up a global rate selected, enter the hourly rate.
5. Optional: Select Set up rates per persona and enter multiple rates if your organization has significant variations in labor costs by department or cost center.
6. Select Next to continue or Save and close to complete the configuration process later.

Result

Your organization's average hourly rate is now configured, and the cost framework starts using this rate to convert productivity hours into financial savings, enabling net return calculations.