Striking a balance between effective budget management and providing vital employee support and benefits is a common challenge that organizations face. In this article, six top professionals share their best tips for managing HR department budgets while still providing employee support and benefits. From optimizing repetitive costs with bulk orders to investing in strategic hiring and retention, these leaders provide invaluable insights based on their experiences.
Optimize Repetitive Costs with Bulk Orders
Managing an HR department's budget effectively hinges on recognizing and optimizing the repetitive, cyclic costs. These often include recruitment advertisements, employee training programs, HR software subscriptions, and event expenses.
In my experience, purchasing these services piecemeal from varied vendors can rapidly inflate costs. However, a shift in strategy made all the difference. We established long-term contracts with our primary vendors and started placing bulk orders.
This approach led to substantial savings. Many vendors deeply value stable, long-term clientele and offer significant discounts on batch orders. By doing this, we saved up to 70% on some of our regular expenditures, ensuring employee benefits remained robust while maintaining a healthy budget.
Fred Winchar, Founder, Certified HR Professional, MaxCash
Align Budget with Real Employee Needs
HR is one budget you don't want to cut because, if you cut too much, there can be a cascade effect in which other costs skyrocket.
HR budgets help support your team so you can reduce employee turnover as much as possible—good working conditions and respect breed happier employees who want to stick with you. With a shoestring HR budget, you may end up paying more to replace the employees who leave than you would spending the money to keep everyone happy.
To understand where that budget money should funnel, it's important to ask your team what they want most. Ensure that your approach aligns with real employee needs and use their feedback to tweak spending as necessary.
Gillian Dewar, Chief Financial Officer, Crediful
Get the Team’s Buy-in with Surveys
Tailor benefit options based on employee preferences. Conduct surveys to identify valued perks, just as in financial analysis. This approach allows us to allocate the budget efficiently, offering benefits employees truly appreciate. By offering a personalized benefits buffet, we optimize resources while enhancing employee satisfaction, resembling financial allocation precision.
Julia Kelly, Managing Partner, Rigits
Implement a Shared Investment Strategy
A strategy that helps to keep the human resource budget in check is shared investment. At the heart of it is blending company-sponsored benefits with employee investment. Instead of shouldering the total cost of a premium employee benefit, a significant portion is covered, and employees are offered the option to purchase exclusive features at a subsidized rate.
This is a sustainable way to stretch the HR budget without compromising on the quality of benefits—it also gives employees the chance to prioritize their perks without losing out on other benefits. It also proves that with a bit of ingenuity, top-tier benefits can still be provided even when on a budget.
Karl Robinson, CEO, Logicata
Conduct a Cost-Benefit Analysis of Programs
A valuable tip for managing HR budgets while prioritizing employee support is to conduct a thorough cost-benefit analysis of existing programs.
In my experience, I assessed our range of benefits, identified underutilized offerings, and eliminated those with minimal impact. This reallocation allowed us to maintain crucial support while optimizing budget utilization. Regularly reviewing and adjusting benefits based on employee needs and cost-effectiveness proved to be a strategic approach to budget management.
Ranee Zhang, VP of Growth, Airgram
Invest in Strategic Hiring and Retention
Managing HR department budgets while still providing employee support and benefits can be achieved by being strategic in hiring and retention practices. Carefully considering the skills and experience needed for each position and investing in employee development and training can build a strong team that can handle a wider array of responsibilities. This can reduce the need for additional hires and help keep HR department budgets in check.
Additionally, offering flexible work arrangements and other employee benefits can help attract and retain top talent without breaking the bank. In the case of my current company, we were a lean team and needed to be strategic about our hiring and retention practices. We carefully analyzed the skills and experience needed for each position, and invested in employee development and training.
This helped us build a strong team that could handle a wider array of responsibilities, reducing the need for additional hires.
Matthew Ramirez, Co-Founder, USMLE Test Prep
From conducting cost-benefit analyses of programs to optimize budget utilization to strategically focusing on hiring and retention practices to reduce the need for additional hires, there are several ways to balance HR budgets with employee benefits. By following these tips, HR departments can strike a balance between budget management and employee support, ensuring a healthy HR budget without sacrificing the well-being and satisfaction of employees.
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