This year brings many concerns for Human Resource (HR) leaders, especially with budget belts getting tight. With all the uncertainty of the economy, there is so much room for anticipation of what needs to be done next. Key would be how to prioritize HR budgets and align them with the organization’s goals to accomplish human capital objectives successfully.
Aside from the two budgeting methods typically used by HR are Incremental and Zero-based, which depend on available funds, anticipated expenses, and profitability, it is essential to discover hot budget items that align with the company’s values and mission, which are high priorities. Here are also some other ways for tightening the HR budget:
- Review your HR budget from the previous year: Start by reviewing your previous year’s HR budget and identify areas that can be trimmed down. Look for expenses that did not provide the expected return on investment (ROI) or were not essential for the business’s growth.
- Prioritize HR functions that are critical for business growth: Talent Acquisition, Onboarding, and Compensation & Benefits are crucial for attracting and retaining top talent. Prioritize these areas while allocating the budget.
- Invest in HR technology: Technology can automate and streamline HR functions, saving time and money. Look for affordable HR technology tools that can help you manage HR processes more efficiently.
- Get executive buy-in: Get support from executives by presenting a well-planned HR budget with data-backed research. Emphasize the positive outcomes that the budget will bring for the company’s growth and success.
- Look for cost-saving measures: Identify areas where you can save costs without affecting the business’s growth. For example, you can reduce recruitment costs by using social media for job postings and leveraging your existing employees’ networks for referrals.
- Conduct regular reviews: Conduct regular reviews of your HR budget to identify areas where you can cut costs further and ensure that the budget aligns with the company’s growth plans.
With these suggestions, you can tighten the HR budget without compromising the business’s growth or losing top talent.