Dear Colleagues,
HR Budget and Its Management
Firstly, it is the duty of HR to make available at least a tentative financial budget and request, as the case may be, a month or two before the expiration of the outgoing year.
This should naturally include but not be limited to the following:
Training & Staff Development
This sub-head would include, on a departmental basis, the number of personnel to attend courses both locally and abroad, the duration of such courses, cost implications as well as other related logistics that would be attached to such, e.g., ticketing, hotel booking.
It should be noted here that companies with their own training institutes save more money by investing in these institutes. Employees are nominated based on their intellectual/skill requirements to attend, and honorarium is paid to visiting facilitators while in-house presentations are seen as part of their functions, especially the training functionaries.
Compensation
This is another issue that HR has to, as a matter of urgency, take upon him/herself to carry out way ahead of management if need be.
On a regular basis, HR should carry out compensation surveys within and outside the company's industry and compare notes, keeping in mind the larger business environment and all other variables—inflation rate, tax policy, cost of living, etc.
Having done the survey, an estimated compensation budget is presented to management, also considering employees that ought to be elevated, which implies an increment, vacancies that ought to be filled, employees leaving by way of resignation, retirement, gratuity, pension fund/insurance financing, and all other financially related compensations/benefits.
Employment Equity
Not to sound too deterministic, it takes a very strong-willed HR practitioner to work in some business organizations.
However, all hope is not lost. For the HR practitioner to be protected in such companies, he/she should ensure that there exists a functional employee handbook that states categorically procedures for selection/recruitment, evaluation, promotion, transfer, termination, etc.
It is again the duty of HR to see to it that there is fairness and equity in the appointment/placement of staff based on qualification, years of experience, talent, and other innate potentials.
It should be noted that it is not always a bed of roses for the HR professional when it comes to recruitment and placement—there could be board/CEO interference, hence most times standards are compromised.
Measuring Financial Impact of HR Systems
When a good budget is made, this would certainly give room for proper financial planning and implementation.
However, a substantial impact can only be felt in the area of cost-saving and general overhead being reduced to a marginal level.
For instance, working towards a properly organized company-owned training center would certainly reduce the total amount that falls under this sub-head.
When the right personnel are recruited, there would be a positive retention result, hence reducing labor turnover and the financial cost that goes with it.
A more recent way of saving money from overheads is the introduction of a Local Area Network in the workplace; this allows for computer-to-computer interactions within the office, thereby reducing stationery consumption, and in general, time is also saved by officers not leaving their desks when not necessary.
In summary, an empowered HR practitioner would always carry out his/her function objectively, look for ways to improve the working conditions of employees, seek advanced and swifter ways of doing his and the corporate business in general—he would certainly subscribe to new technologies such as HRIS.
In the meantime, as always, I rest my case here.
Regards, Afolabi Ajayi
HR Budget and Its Management
Firstly, it is the duty of HR to make available at least a tentative financial budget and request, as the case may be, a month or two before the expiration of the outgoing year.
This should naturally include but not be limited to the following:
Training & Staff Development
This sub-head would include, on a departmental basis, the number of personnel to attend courses both locally and abroad, the duration of such courses, cost implications as well as other related logistics that would be attached to such, e.g., ticketing, hotel booking.
It should be noted here that companies with their own training institutes save more money by investing in these institutes. Employees are nominated based on their intellectual/skill requirements to attend, and honorarium is paid to visiting facilitators while in-house presentations are seen as part of their functions, especially the training functionaries.
Compensation
This is another issue that HR has to, as a matter of urgency, take upon him/herself to carry out way ahead of management if need be.
On a regular basis, HR should carry out compensation surveys within and outside the company's industry and compare notes, keeping in mind the larger business environment and all other variables—inflation rate, tax policy, cost of living, etc.
Having done the survey, an estimated compensation budget is presented to management, also considering employees that ought to be elevated, which implies an increment, vacancies that ought to be filled, employees leaving by way of resignation, retirement, gratuity, pension fund/insurance financing, and all other financially related compensations/benefits.
Employment Equity
Not to sound too deterministic, it takes a very strong-willed HR practitioner to work in some business organizations.
However, all hope is not lost. For the HR practitioner to be protected in such companies, he/she should ensure that there exists a functional employee handbook that states categorically procedures for selection/recruitment, evaluation, promotion, transfer, termination, etc.
It is again the duty of HR to see to it that there is fairness and equity in the appointment/placement of staff based on qualification, years of experience, talent, and other innate potentials.
It should be noted that it is not always a bed of roses for the HR professional when it comes to recruitment and placement—there could be board/CEO interference, hence most times standards are compromised.
Measuring Financial Impact of HR Systems
When a good budget is made, this would certainly give room for proper financial planning and implementation.
However, a substantial impact can only be felt in the area of cost-saving and general overhead being reduced to a marginal level.
For instance, working towards a properly organized company-owned training center would certainly reduce the total amount that falls under this sub-head.
When the right personnel are recruited, there would be a positive retention result, hence reducing labor turnover and the financial cost that goes with it.
A more recent way of saving money from overheads is the introduction of a Local Area Network in the workplace; this allows for computer-to-computer interactions within the office, thereby reducing stationery consumption, and in general, time is also saved by officers not leaving their desks when not necessary.
In summary, an empowered HR practitioner would always carry out his/her function objectively, look for ways to improve the working conditions of employees, seek advanced and swifter ways of doing his and the corporate business in general—he would certainly subscribe to new technologies such as HRIS.
In the meantime, as always, I rest my case here.
Regards, Afolabi Ajayi