Shape Your HR Budget for the New Year

Featured in the HR NOLA December 2018 Newsletter

Are you putting the effort into shaping your HR budget for 2019 and beyond?

HR Budgeting – What Businesses Should Consider

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It’s that time of the year again and who doesn’t enjoy the budgeting and forecasting process? Whether you’re zero-based budgeting or incremental, it’s important to establish a budget and a plan to review different HR needs so that you don’t come up short in the places where you need extra funds. Here are 5 key areas we typically start with:

1. Employee Wages & Salaries

The greatest cost in your HR budget will be employee salaries and wages, so it’s best to begin there.  Think about next year’s annual raises, promotions, hiring plans and commissions.

2. Cost of Employee Benefits

What’s your organization’s strategy toward contributing to employee benefits, including health and other insurances and 401(k) contributions. Will it remain the same in 2019? Last year the average cost of providing health care made up 7.6 percent of a company’s annual operating budget and equates to an average of $8,669 per covered employee, according to the Society for Human Resource Management.

3. Training and Development

Estimating the cost of employee training and development can be as basic as calculating the cost of joining webinars, attending seminars and conferences, tuition reimbursement, certifications, etc. Recent studies show development is a powerful acquisition and retention tool!  

4. Paid Time Off (PTO)

To accrue or not to accrue - the time-off accruals that go unused and are carried on your books are a liability to the company. Account for PTO accruals in your books somehow, whether in HR or accounting.

5. Recruitment

If you’ve been keeping track of how much you’ve spent on recruiting in past years, extrapolate that number based on how many candidates you want to hire in the coming year so that you don’t come up short when you need to fill an important position.

Conclusion

HR is an important function that impacts every employee in an organization—and that has a cost. The better you understand the cost of being an employer, the better decisions you can make for your organization.


Looking for help with your HR budget? Call HR NOLA today at 833.HRNola.1 or visit us online!