September 17, 2018 9:00:00 AM EDT

6 Tips for Human Resource Budgeting

Human resources is the lifeblood of a company. HR ensures that candidates are vetted, new hires are trained, and employees will continue to develop and grow. As a Director, Manager, or CHRO, you understand people make a company successful. So how do you know when to start planning, and how to get the rest of the executive team on board?

We can help. As one of the best HR consulting companies, we have some tips for you!

Tip 1:  Meet with department heads

This part leads to all the other steps. You can’t know everything that’s going on in your company, so check in with the leads and influencers for each department to get a better idea of needs that may affect your budget.

Tip 2:  Analyze current job openings

These are positions you know need to be filled. How long have they been open? Do you have the right comp plan? Do you need some outside help, like from a hiring agency? Should you be putting an ad in the paper or on the internet? Chances are you will be spending money to fill these positions. Figure out how much.

Tip 3:  Forecast future job openings

Are you adding products or services that require new hires? Is a particular department growing quickly and in need of additional leadership? What is your projected turnover rate? Look at past trends to help forecast this and anticipate the money spent searching for and hiring the right candidate. Hiring and training front-line employees often costs 30% of annual salary.  Hiring for leadership positions can cost 213%.

Tip 4:  Anticipate training time for new hires

New hires need training and time to acclimate to a new job. Whether this is in-house training or external, there will be additional costs to the company. For internal training, be sure to account for the cost of pulling someone from their daily work for training as well as the hard costs of registration fees, travel and any other incidentals.

Tip 5:  Consider potential promotions

Are there key employees who have been on an upward trajectory? People that you expect to put a little more time and money into development? Promotions don’t have to be a new title, but they  can include pay raises and additional responsibilities. To execute the plan properly, employees may need leadership classes, retreats, etc., which  need to be considered in the budgeting process.

Tip 6:  Account for networking groups

Whether its leadership groups for C-level executives, or software-specific groups for programmers, there are many beneficial groups employees can join. Most groups have some sort of fee or dues. Take the time to see what’s available and if there are any expenses that sneaked through last year's budget. Anticipate any expected new additions.

Want to to take a deeper dive into the planning process?  Download our e-book, Organization Effectiveness for 2030 - Are You Ready? How the World of Work is Changing. Or check out our Ultimate Guide to Team Accountability.

Download Our Ebook Organizational Effectiveness for 2030

Judy Johnson
Judy Johnson

Judy partners with executives and leadership teams to engage and inspire employees in a way that delivers sustainable strategic results. She brings deep expertise and creative ideas to solve organizational effectiveness issues and closely collaborates in a way that builds internal capabilities. Judy has spent over 25 years consulting in a variety of industries, bringing her expertise in behavior to a wide range of organizational issues including organizational behavior change, leadership, change management, culture and engagement.