HR Budgeting Basics: What Should Be Included and How Often Should It Be Reviewed?

Dear All,

What are the components that go into HR Budgeting? How often does it have to be reviewed, and to what extent does it have an impact on the company?

HR Budget Elements

The elements in the HR department budget would vary with company policy, budget process, company accounting system, and the nature of the business operation, etc. Here is a broad set of guidelines:

- Recruitment/selection [internal/outsourcing]
- Contractors [external]
- Salary/wages
- Training/development [includes induction/orientation]
- Staff benefits
- Staff amenities
- Workplace facilities
- Workplace safety [OHS]
- Salary contingency
- Workers' compensation
- Staff communication [includes newsletter/intranet]
- Labor relations [legal/investigations]
- HR administration
- HR travels
etc.

Once again, the reviews vary with organizations. The majority review the HR component every six months, while in others, it is reviewed quarterly. The more labor-intensive the industry is, the more frequent it is. In the service sector, like banking, telecommunication, BPO, business services, hotel industry, hospitality, etc., it is done very frequently [at least quarterly].

The more labor-intensive, the greater the impact. Hope this is useful to you.

Regards,
LEO LINGHAM

Sir,

Do these elements include only the HR Department, or all company's other departments? How do you approve your budget? Is it based on your previous one and on the company's strategy?

Thank you

It's good information. Why don't you make it a little bit clearer by posting the entire process from start to end? It would be helpful for us. I need some more information, so please provide the necessary details.

Regards,
Madhusudan.

Thanks for the complete breakdown. Would you like to know if companies engage in this budgeting activity on an annual, bi-annual, or quarterly basis?