It’s that time of year again when companies are preparing their budgets for the upcoming year. For HR professionals, it is probably not one of your favorite tasks, but by embracing the process, it can be an opportunity to reinforce the HR function as a strategic partner. In the WageWatch 6/12/13 blog, Budget Boot Camp, we covered the fundamentals of the HR Budgeting process. Now we will dive a little deeper into the specific elements of the HR Budget.
Budgets are used to monitor progress toward goals, help control spending, and predict cash flow and profit. The challenge is predicting the future 100% accurately and in turn developing effective budgets.
It is valuable for HR to gain a strong understanding and appreciation for the value of good annual budgeting. In most companies, employee costs constitute the majority of fixed costs and therefore the HR budget contains key and critical elements of the overall company budget.
Here are a few things you can do to make the budget process a smoother one:
- Throughout the year, ensure to include the CFO when reviewing such things as pay increases with the CEO. This can go a long way to developing a partnership with the CFO.
- The credibility of the HR function is significantly improved when you can demonstrate real savings and value for HR Projects and Processes.
- Empower your HR team. Every HR team member should own their line items in the budget. For example, recruiting is responsible for their search firm fees, recruiting tools and relocation.
- Link the development of your budget to corporate strategy. This gives a clearer understanding of strategic goals. And, in turn, should create greater support for the goals, and, a stronger companywide performance. The key to linking the two is communication. In order to communicate strategic goals, top management needs information about customers, competitors, technology, etc. and this information must come from support units such as Human Resources.
|Budgeting requires the collection of many forms of data. From a human resource perspective, below are some items that would be included in the budget:Recruiting
Compensation and Benefits
Employee and Labor Relations
At WageWatch our compensation consultants can assist with your organization’s compensation needs and help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit survey data, market compensation data and salary surveys that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online .