I've seen the HR funding model but I don't understand how it actually will work?

Since you have seen the funding model, then you are familiar with the ‘Headcount Price Per Year’ design.  After thoughtful analysis conducted by a group of MSOs and input from the four Schools, a dollar value was assigned to different populations based on the amount of effort it takes HR to support employee activities for the entire HR life cycle (recruit, hire, advancement, benefits management, separate, etc.).

A department will be billed a fee based on the headcount prices and the headcount based on home department code of the employees within that department.  As an example, the charge is $896 to support each staff person per year.  The department will be charged monthly based on a headcount snapshot that is taken on March 1st annually.  For fiscal year 12-13, the departments have a window of opportunity to review and make changes before the final headcount is taken on May 1st.   The official rates and billing charges will then be published May 31, 2012.

For a more detailed answer please click on this link and go to slides 23-37 or contact your HR Service Center Director.