Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Getting Your HR Budget in Line

Companies / SME Jan 10, 2020 - 03:01 PM GMT

By: Sumeet_Manhas


Human resources; one of the essential parts of any business and always will be. With this in mind, it’s important to get it right. First and foremost, this starts with HR budgeting, and this is what we want to discuss today. How do you ensure that the budget meets the needs of the company and accommodates, or even encourages, growth?

Biggest HR Costs

Before doing anything else, you need to have a full understanding of your HR costs. Without this, you will have no idea how much money is being allocated to that department, and the business could suffer as a result. We believe it can be broken down into six main areas;

  • Recruitment - Advertising, drug testing, skills testing, agency fees, background checks, temporary help, etc.
  • Training/Development - Registration, certifications/exams, development courses, travel expenses, food and drinks, supplies, equipment, consulting fees, etc.
  • Benefits/Compensation - Overtime, salaries, payroll costs, insurance, incentive compensation, pension plans, survey reports, commuting expenses, etc.
  • Health and Safety - Nurse hotline, safety training, fitness facilities, lockers and security measures, employee assistance programs, etc.
  • Labor Relations - Performance appraisal software, employee satisfaction surveys, diversity management program administration, awards programs, etc.
  • Miscellaneous - Charitable donations, intranet installation, and maintenance, consultants and other experts, HR memberships and subscriptions, etc.

By carefully considering a budget, the HR team has the funding they need to ensure success in each of these six areas. Rather than having to make sacrifices, and thus affecting the whole business, they can attract high-quality talent, keep them happy, and ensure long-term employment within the organization.

Building a Budget

At this point, we can save you lots of hassle by saying that more and more small businesses are choosing to outsource things like HR and payroll to specialized outsourced service providers. Starting with the services you need, it’s possible to keep scaling up the services you receive until you think it’s financially viable to launch an internal HR team (if this is even necessary!).

With the budgeting process itself, you might be tempted to look at last year’s budget before then adjusting based on performance, expectations, and needs. For example, if last year fell short, and the HR team didn’t have the resources they needed, you could adjust it upwards. This is called incremental budgeting, and it’s one of two viable strategies.

On the other hand, you might prefer what’s called ‘zero-based budgeting.’ With this, you don’t start with historical data, you start with absolutely nothing. From here, you consider your costs in each of the categories we’ve mentioned. Using the strategic objectives of the company as a base, each expense should contribute when assessed individually. Since each expense is considered carefully in relation to the overall goals of the company, this strategy is often employed to help reduce costs.

Choosing a Strategy

Which method will you choose? This all depends on a few factors. First, how successful was your HR budgeting last year? If you were close to perfection but need a few small adjustments, it might be better to go with incremental budgeting. If you were far off-budget or big made some mistakes, you might want to break everything down, even if it takes a little longer.

Second, are you pressed for money? For those with minimal funding, zero-based budgeting may allow the company to save money because every single expense is justified. Whatever you do, be smart about it, you don’t want to be broke during the next recession.

As mentioned previously, there’s a third option too because there are some affordable online HR services ready and willing to help. With extensive experience in this field, they will know all about budgeting and how to improve your business even as it grows!

By Sumeet Manhas

© 2019 Copyright Sumeet Manhas - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules