How to create an HR budget to Attract the Best Talent
An effective HR budget can go miles in attracting the best talent to your organisation.
An HR budget lays out a plan for how the HR department is meant to allocate funds for the next quarter or year, which is crucial. An HR team aligned on its spending plans will find it easier to execute meaningful talent strategies and employee development in an organisation.
Talents within a company who are well taken care of and provided for in terms of their professional growth, are a company’s best advertisement for new talent. Employees who aren’t provided growth, because of a lack of effective HR budgeting, planning and resources, are likely to share their bad experiences with other potential candidates in the market.
In today’s professional world, word travels fast about which companies go above and beyond to provide the best career development and employee experiences for employees.
So how do you make sure what’s being said about your company is positive?
Strategic HR planning and an effective HR budget is key.
Steps to Create an Effective HR budget
While upper management might have grand plans about what to do for the company in terms of its talent strategy, it’s often HR’s role to step in to prioritise what’s realistic budget-wise and what is top priority.
Review past budgets
Understanding where the HR department has spent money in the past and how effective those budgets have been in achieving goals is helpful in creating a new one.
From here, HR can understand what needs to be tweaked and updated, such as where expenditure needs to be increased or decreased. For instance, you may realise from looking at the numbers that increased expenditure on a recruitment marketing agency yielded more quality talents than increased spending on new hires in the HR team.
You might also realise that in previous years, too much was allocated to a certain area, or too little was allocated to another area and it went over-budget. These are things which can be modified with a new budget.
Keep track of your budget
A budget calendar is crucial in getting on top of an HR budget. This would include dates like budget reviews, budget approval dates and when budgets are due. It’s important that the HR department and other departments within the organisation are on the same page when it comes to how much is allocated to HR.
Within the HR team itself, it’s also helpful to set up an Excel spreadsheet with the department’s budget in order for everyone to be aligned.
Establish realistic goals
While it can be tempting to focus on everything at once, it’s essential for HR to determine areas for improvement which are of top priority. When the time comes, other concerns can also be addressed, but with a limited budget, the need for focus is extremely important.
Areas of spending might include the following:
Resources for employees
Conduct regular budget reviews
Budgets are not set in stone and need to evolve with a company. A change in management or a new direction the company is taking are reasons to revisit the crafted HR budget.
While adjustments to an HR budget shouldn’t be happening too often, it’s important for companies to be flexible in keeping up with changes within the organisation. Failure to do this will mean running the risk of being left behind, particularly in fast-moving industries such as technology.
With strategic HR planning, your organisation will be on its way to crafting a realistic and comprehensive HR budget. For more articles on HR, talent sourcing and employee experience, visit the JobStreet Insights page for more content.