More and more traditional HR tasks are becoming automated or outsourced. As a result, today’s top HR heads are in a serious period of change—evolving from largely operational roles to strategic business partners. To stay relevant, human resources specialists need to grow their skill set and become experts in implementing their companies’ overall business strategy.
Here are some innovative ideas to keep in mind as you start building your strategic HR plan and budget.
Use KPIs to play the long game
HR needs to align its specific departmental goals for the next few years with wider organizational benchmarks. From a budget standpoint, this means making every effort to ensure that every dollar HR spends supports your company’s mission and vision.
The best way to do this is to take the time to determine key performance indicators (KPIs). Determining what your HR KPIs are can help empower people leaders to assess the progress and effect of HR on organizational goals and objectives. These measurements are pertinent to the HR department’s ability to communicate objectives across a company.
If you set out to slash your company’s turnover rate, for example, your company may see a rise in retention as a result. So, when you create budgets supporting one of those goals—for example, by improving onboarding or employee perks—you know you’re making two investments in your future.
Identify the leaders you’ve already hired
An HR team that proactively takes steps to ensure their people’s professional development is essential to engagement and retention rates. So as you evaluate your talent needs for the new year, you’ll also want to keep in mind the people you already have working for you.
Which of these ninjas are primed for a promotion? As you build next year’s HR budget, team members who have exhibited promising leadership qualities, expressed a desire to move to a new department or want to pursue additional education or professional certification must be acknowledged.
For HR, this means noting opportunities for career development and following through with them in the new year.
Want to learn more about identifying internal leaders? Check out our guide to spotting and growing leaders.
Budget for unexpected change
As workplaces expand beyond borders and time zones, it’s important to remain flexible with your budget. Research shows that there’s a strong connection between an HR manager’s flexibility and people’s overall level of commitment to reaching organizational goals.
What does it mean to be agile? Staying current on the latest technological trends is vital. A company whose HR department doesn’t budget for time-saving advantages is bound to fall behind the competition.
You need to be aware of and budget for technological leaps forward in internal communications, information sharing, and onboarding. These are the tools every company needs to create a crucial feedback loop between team members and managers. Such metric-driven HR tools of the trade clarify expectations, which will boost your people’s confidence in their company.
Recommended For Further Reading
Translating great hiring into profitability
Ultimately, your HR budget should be geared towards boosting your company’s ROI. Only by embodying profitability will you be able to implement initiatives to strengthen your workplace culture. Speaking the language of revenue generation is a powerful way to make your company’s CFO sit up and take notice. As a result, your annual budget is much more likely to be approved.
This means that you should become besties with your CFO. Seriously. Being a strategic business partner means knowing what drives—and depresses—your company’s profit margins. Close collaboration with your CFO will greatly increase your business knowledge and understanding of how innovative HR solutions can help your company increase its ROI.
Give HR a seat at the budgeting table
The good news is that 73% of CEOs say that their HR leader had provided data that they had incorporated into their business strategy. But first, it’s up to you to successfully negotiate your HR budget.
You can’t expect your company’s top decision-makers to automatically understand HR’s role in furthering your company’s wider objectives. This is why you need to draw a clear picture for the heads of all other departments about HR’s role. To drive home your point, use spreadsheets to demonstrate the connection between HR’s KPIs and your company’s ROI. Also, use PowerPoint to demonstrate the strong connection between HR’s supportive work and your company’s ability to run smoothly and adapt to change without missing a beat.
By injecting organizational strategy into HR’s budgetary goal process, you’ll greatly enhance the HR department’s role in your company—and be in a stronger position to create a workplace culture of success.
