Home » Our Blog » 5 Tips for Your HR Budget
back to the top
5 Tips for Your HR Budget

5 Tips for Your HR Budget

Share on Facebook Share on Twitter Share on LinkedIn Share on Google Plus Share through email Print it More share options

5 Tips for Your HR Budget

Today’s HR budget is multifaceted, largely due to HR’s shift from a traditional operational role to strategic business partner. No longer viewed as simply “personnel,” HR now consists of many aspects, all of which must be considered when planning the department budget. While there is no fixed rule concerning what should be included in an HR budget, here is a list of the five most common elements.

  1. Compensation and Benefits

Out of all HR programs, compensation and benefits programs typically are the most scrutinized, according to Bloomberg BNA and 59 percent of surveyed organizations reported holding frequent assessments of their wages and salary and benefits programs.

In the budget review for compensation and benefits, consider including:

  • Wages and salaries
  • Salary and promotion increases
  • Overtime pay
  • Bonuses and commissions
  • Medical, dental and vision insurance
  • Life insurance
  • Disability insurance
  • Retirement plans
  • Employee travel
  • Benefits plan administration

 

  1. Training and Development

Spending on training expenditures in U.S. corporations and educational institutions rose to $70.6 billion in 2015, a 14.2 percent increase in just one year, according to Training magazine. Clearly, employers are seeing the value of employee training and development.

Common HR budget considerations for training expenses are:

  • E-Learning, video tutorials and classes
  • Consulting fees
  • Employee turnover
  • Travel and meal expenses
  • Seminars, workshops and conferences
  • Certification exams
  • Subscriptions
  • Ongoing training, such as certifications

 

  1. Employee Retention

One of the toughest issues many organizations face today is how to retain their top talent – which makes developing an effective retention plan a fundamental HR function. The cost of the retention plan included in the HR budget may cover:

  • Awards and paid time off to reward high performers
  • Fun activities at work, such as holiday parties, games and competitions
  • Gifts to acknowledge personal/family milestones, such as marriage or childbirth
  • Voluntary benefits and perks, such as college savings plans and retail store discounts

Work-life balance incentives

 

  1. Health and Safety

The Occupational Safety and Health Act (OSHA) requires that employers provide a healthy and safe workplace. In your HR budget, think about including the cost of fulfilling OSHA requirements and other programs designed to enhance employee well-being, such as:

  • Employee assistance programs
  • Safety promotion and training
  • Fitness facilities
  • Smoking cessation programs
  • Workplace violence prevention

 

  1. HR Technology

HR’s progression to strategic business partner has escalated the demand for HR technology. According to CB Insights, in 2015, investors plunged $2.4 billion into HR tech vendors, a 60 percent jump from the previous year. HR tech tools that allows your workforce to take ownership of their information, enroll in benefits, view pay stubs, request time off, enroll and track their training courses will alleviate the HR team.

An HR budget should take into account how technology can streamline:

  • Benefits administration
  • Compensation structures
  • Employee retention
  • Onboarding and off boarding
  • Performance management
  • Recruiting
  • Training and development

 

Be sure to examine the operational and financial impact of your preferred HR technology, because your tech solutions should be delivering real-time data and agility to facilitate improvements for success.



Author Bio: As a Human Resource Professional with over 20 years of experience, Jenny has extensive experience in management, mentoring, policy development and recruiting. Jenny's team player mentality and leadership abilities make her an elite HR Director who is always on top of the latest HR trends. She relentlessly directs associates and executives to achieve their maximum potential for both themselves and their companies.

New Leaders

Businesses in 2017 Need New Leaders. Are You Ready?

Share on Facebook Share on Twitter Share on LinkedIn Share on Google Plus Share through email Print it More share options

Businesses in 2017 Need New Leaders. Are You Ready?

Companies are growing and the need for new leaders is growing with them.  A recent Yahoo Finance article noted that workers are returning to the workforce in droves, with the employment-to-population ratio hitting 60 percent — the highest it has been since February 2009. Consequently, if you ask businesses what they need from employees in 2017, the answer of more leaders soars to the top of list after list.

Leaders Needed

Deloitte’s 2017 Global Human Capital Trends study noted, “Leadership development continues to be a significant challenge for companies around the world, as the transition to the new digital organization creates even larger leadership gaps.”

With the speed at which technology moves, being at the helm of a team can feel overwhelming, especially when a leader’s daily to-dos often overtake precious time that could be spent working strategically to hone team members’ skills.

However, when it comes to succeeding in business, nothing will put you on the fast track quite like efficiently meeting an immediate need like building leaders. Here are two simple techniques to get you started.

  1. Embrace Online Training

Baby boomers, Gen Xers and millennials are more alike than you think. With the breakneck speed of the internet, everyone must be perceptive to change. An openness toward online learning will serve you well as you lead your team through the information age.

“The most critical need for most organizations is for leaders to develop digital capabilities,” said the authors of Deloitte’s 2017 study. “Today only 5 percent of companies feel they have strong digital leaders in place.”

Additionally, in a recent article in The Economist, author Andrew Palmer called lifetime learning an “economic imperative” and said, “Technological change demands stronger and more continuous connections between education and employment.”

Many businesses are beginning to embrace training by offering employees robust opportunities through learning management systems. Those interested should start by taking advantage of any on-demand learning their employers offer. Figure out where your learning pain points are and dig into a training module that transforms your professional and personal knowledge.

  1. Value Teamwork

Historically, American employees have always worked hard, diligently climbing each rung of the corporate ladder. However, the old, “me-focused” way of doing business is outdated.

Teamwork is crucial to today’s leaders because innovation happens on a minute-by-minute basis. Leaders of today have to look for strengths in others and bolster team successes over individual achievements. You’ve heard the phrase, “a rising tide lifts all boats?” Workers should focus their time ensuring their tide is composed of high-achieving, collaborative team members, and then watch the rest of the boats rise.

By valuing online learning and working as a team, today’s organizations can accomplish their 2017 leadership development goals and be better prepared for the future.

Posted in Blog, Featured, Leadership

Jeff York

by Jeff York


Author Bio: Jeff York, Paycom’s chief sales officer, has more than three decades of sales experience and has held a variety of sales management positions; prior to joining Paycom In 2007, York spent 12 years with a legacy payroll provider, where he held a variety of sales management positions including vice president of sales for the major accounts division. York, a Texas Tech University graduate, also holds an MBA from Baylor University’s Hankamer School of Business.

4 HR Reports for the C Suite

4 Reports Every HR Pro Should Bring to the C-Suite

Share on Facebook Share on Twitter Share on LinkedIn Share on Google Plus Share through email Print it More share options

4 Reports Every HR Pro Should Bring to the C-Suite

As an HR leader, you are the trend master.

You know that businesses generate more data than ever. Because of this, they have developed an acute desire for metrics.

You know that even though the goals of businesses continue to be product- and output-centered, the way business happens has shifted.

And you’re right. According to a 2017 Deloitte survey of more than 10,000 HR and business leaders, “88 percent of companies believe they need to redesign their organization to succeed in the digital age.”

However, as a leader, it’s your job to understand what’s behind the buzz, figure out the best way to capitalize on what’s trending and provide cogent recommendations to a C-suite executive looking for answers.

Reports provide quick, coherent overviews from employee retention to hire quality; they help HR leaders dial into the metrics that matter. Although every business is unique and requires different measurements from HR, there are few metrics and reports that may place businesses ahead of the digital curve while still meeting and then exceeding senior leadership’s expectations. Here are four HR reports the C-suite really wants to see.

  1. The Cost Per Hire report

As the saying goes, you’ve got to start somewhere. Understanding how much it costs your team to hire each employee is the bedrock from which other metrics originate. It’s surprising how many businesses neglect this metric, when according to Glassdoor, “It’s crucial to have a solid estimate of your cost per hire (CPH). Knowing this figure can help you make smarter investment decisions, define your referral bonuses and save your organization money in the long run.”

One helpful formula for calculating CPH is:

(Internal Costs) + (External Costs) / Total Number of Hires in a Time Period

 Once you discover your company’s CPH, other metrics, such as employee ROI and quality of hire, can be built from this cost, which provides a clear picture for how that employee investment is really performing. 

  1. The Quality of Hire report

The real business MVP of 2017 is the employee. Consequently, understanding the effectiveness of your hiring process is crucial to the health of your business. That’s where a quality of hire report comes in. Quality of hire metrics can be tricky to identify and are continuously evolving, but one useful formula pulled from HR Daily Advisor is:

(Performance + Retention + Productivity) / N

For purposes of this formula:

  • Performance equals the average new-hire performance rating
  • Retention equals the percentage of new hires still employed after a year
  • Productivity equals the percentage of the new hires achieving full productivity scores during a desired period
  • N is the number of indicators used in the formula

Although some quality metrics are subjective, they are useful when consistently reviewed. Called the “holy grail of recruiting,” figuring out your business’s quality of hire numbers minimizes hiring problems and maximizes employee ROI. 

  1. The Turnover Rate report

According to a recent article in Fortune, “The biggest priority, and concern, for business leaders in 2017 will be retaining employees in a competitive talent marketplace.” With companies pulling out all the stops in hopes of keeping talent and enticing new candidates, today’s job market is fierce.

Turnover reports outline the number of employees who have left, and then dig into whether the number is higher or lower or than normal. High turnover rates exacerbate hiring costs and lower productivity and morale; therefore, a consistent report is a good way to gauge the health of a business. Monthly turnover metrics also inform upper management of any significant trends they may need to address. 

  1. The Revenue Per Employee report

 Senior executives make decisions based on facts, not feelings or opinions.” This quote from an article in HR Magazine articulates something HR leaders know better than most: Almost every company’s biggest expense is its employees.

Therefore, the most powerful measurement for the C-suite is the return (or lack thereof) on investment for those employees. There is a reason top tech companies excel with these numbers. Revenue per employee (RPE) is simple to calculate:

Total Revenue / Total Number of Employees

This metric determines how effectively HR is hiring and training their employees. As long as HR leaders ensure they compare their company’s RPE to similarly sized businesses from their industry, RPE can help senior leaders confidently make game-time decisions.

In summary, HR leaders can actively contribute to business decisions by presenting the C-suite with metrics that matter. In an interview for HR Magazine, compensation analyst Jennifer Triumph noted, “[HR leaders] need to present data that show our human capital strategy is effective and that we are acquiring, developing and deploying the proper talent.”

The data-driven desire of those in senior leadership isn’t going anywhere and HR needs to be aware of their business’s metrics in order to lead their workforce into a successful future.

Posted in Blog, Featured, HR Management, Leadership, Talent Management

Chad Raymond

by Chad Raymond


Author Bio: With over 19 years of experience in employee engagement, benefits administration and government compliance, Chad has unparalleled knowledge in the fields of leadership and human resources. Chad has worked in several different capacities with Paycom including leading our product development team and HCM initiatives as well as the former director of Paycom’s service department. Chad’s vision and execution helped empower executives and their teams to reach their full potential, ultimately leading to his role as Paycom’s vice president of HR.

Strategic HR

4 Ways Strategic HR Moves Your Company Forward

Share on Facebook Share on Twitter Share on LinkedIn Share on Google Plus Share through email Print it More share options

4 Ways Strategic HR Moves Your Company Forward

Business leaders are realizing that skill shortages and disruptions in the workforce will change everything. The link between effective talent management and profitability becomes more evident every day. As a result, the C-suite is looking to HR to attract, build, engage and retain the talent their business needs to compete and grow. If you and your team haven’t yet adopted a talent-focused and service-delivery model, conditions are perfect for making this leap.

Why now?

The looming skills shortage and changing nature of the workforce has a lot to do with it. According to research by PricewaterhouseCoopers, 72 percent of CEOs list the availability of key skills as one of the biggest threats to their business.

To offset this potential negative impact, CEOs increasingly have become involved in decisions regarding talent. Many have explored options like outsourcing certain business functions or departments, and utilizing staffing agencies and independent contractors to fill the gaps. Business leaders have begun to revisit their talent strategies and embrace nontraditional employment structures in order to have the workforce they need to achieve organizational goals.

But as technology continues to revolutionize the way people communicate and work, talent strategies must evolve continuously as well. The rise of the “gig” economy and the growth of telecommuting will continue to challenge both CEOs’ and HR leaders’ ideas of what the workplace – and an employee’s career – looks like. Employers are taking a proactive stance.

According to Deloitte’s 2017 Global Human Capital Report, 87 percent of U.S. companies rated preparing for the future “very important.” However, only 11 percent of companies reported knowing how to build “the organization of the future.”

Moving forward

Because an organization’s workforce ultimately drives its performance, and business leaders acknowledge the link between talent and performance, Deloitte’s findings represent an exciting opportunity for HR leaders and their teams. To become the talent enhancement department and drive the business of the future, consider these four tips:

  1. Use all of your payroll and HR software. 

    Focusing on cultivating talent means shifting your time and resources away from other HR functions; but compliance, payroll, benefits and more still must be managed flawlessly. This is where your human capital management (HCM) technology can act as a real load-lifter – if you’re using it properly.

If you or your team is underutilizing your HCM tech, think about what’s holding you back. Are paper-based processes still alive because your new system isn’t user-friendly? Does your team find it easier to do things the old way? If so, ask your provider for training. Then, help keep your team’s collective eyes on the prize. Reiterate how turning the administrative work over to the tech will give them the time they need to focus on talent strategy.

  1. Use behavioral profiles to recruit top talent.

    Identifying top performers and create behavioral profiles of those individuals. Giving these profiles to recruiters and hiring managers can help them find similar candidates who have the skill set and personality to succeed in specific roles.

The use of behavioral profiles can also increase employee retention. A study by PI Worldwide reveals that establishing behavioral profiles for specific roles helps managers create succession plans and performance incentives that work.

  1. Work with front-line managers to build engagement.

    According to Gallup, managers can influence employee engagement by as much as 70 percent. But not every person in a managerial role has the ability to inspire and drive his or her employees. Luckily, there are several ways HR can help business leaders give managers the tools they – and their employees – need to succeed. 

  1. Tie your metrics to business outcomes.

    According to ERE Media, traditional HR metrics tend to focus more on departmental efficiency than business performance. Instead, find and report on new-hire productivity, the costs associated with losing key employees and filling their vacancies, and revenue per employee. These metrics paint the big-picture view leaders need to make informed workforce decisions.

Following these steps can help you become the high-impact HR organization your company needs, now and in the future.

Tags: , , ,
Posted in Blog, Featured, HR Management, Leadership, Talent Management

Chad Raymond

by Chad Raymond


Author Bio: With over 19 years of experience in employee engagement, benefits administration and government compliance, Chad has unparalleled knowledge in the fields of leadership and human resources. Chad has worked in several different capacities with Paycom including leading our product development team and HCM initiatives as well as the former director of Paycom’s service department. Chad’s vision and execution helped empower executives and their teams to reach their full potential, ultimately leading to his role as Paycom’s vice president of HR.

Subscribe to Paycom's blog
X

Learn more about Paycom

  • Are you a current Paycom Client?

    Yes

    No

    • Talent Acquisition

    • Time & Labor Management

    • Payroll

    • Talent Management

    • HR Management

  • Subscribe me to Paycom's newsletter.

*Required

We promise never to sell, rent or share your personal information with a third party unless required by law. By submitting this form, you accept our Terms of Use and Privacy Policy.