How Should HR Expenses Be Budgeted?

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HR expenses need to be budgeted in a very specific way for the best possible results. Find out about how HR expenses should be budgeted with help from an accomplished attorney, author and speaker in this free video clip.

Part of the Video Series: Human Resource Tools
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Video Transcript

Welcome, this is HR That Works, Don Phin, and today I'm going to answer the question how should HR expenses be budgeted. You know, every company has a series of needs surrounding HR and starting from the top you could think of the experience of an employee, it begins with hiring and the hiring process. So if you're going to be hiring anybody this year, you know, what steps do you have to go through to hire people, what's the time and what's the out of pocket expense associated with that process. Now the next thing is you want people to perform. So what time do we have to budget, what tools do we have to budget to allow people to perform better, what can be the impact of them performing better in terms of a budget. The third thing is retention and when we talk about a retention budget we have to think like marketers, you know, when we put together marketers, a budget as a marketer, we're looking for the impact that our expenses will make. So if I run an ad I expect to make three times what I pay for the ad. When you're talking about a retention what's your return on that investment? So you've got to budget for good retention thinking about the lifetime value of the employee. Then we have to budget for training in today's environment. This is a knowledge of economy, you must budget for training. You can have low cost training expenses but you're still going to have to budget for their time. If you've got exempt managers, well you can all buy them lunch and you're budgeting for a Subway sandwich in the training, okay, then of course, there's the compliance aspects, training for compliance, any legal help that you might need, any programs like HR That Works you might be using. So you want to talk about compliance as part of your budget and then the last part of it is you know, when I say compliance we're all talking about things like safety and benefits of administration and all those things that can get you in trouble, and the last part about it is how do we kind of lift the spirits, you know, how do we budget celebrations, how do we budget things to build team fabric, how do we budget ways to make people feel better about themselves? What kind of rewards or gifts can we give that should go in the budget too. So those are the basic line items that will go in a budget. I hope that helped you. Take care.


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