Strategic HRBP Dilemma: How to Add 50 Employees Without Exceeding Budget?

Dear Members,

One of my colleagues was asked during an interview where he applied for a Strategic HRBP role. You are the VP HR of the company. There are 200 employees, and the salary cost amounts to 5 crore annually. The CTO of the company wants to add 50 more employees. However, you cannot exceed the 5 crore budget as it would impact the business. You also cannot go back to the CTO saying no to adding 50 more employees.

What would you suggest in this case?

Dear Nutan, If the employee expenses for 200 employees are Rs 5 Cr per annum, then let us assume that for 50 more employees, these would be Rs 1.25 Cr per annum. There is only one option: to reduce the salary of those 200 employees by 1.25 Cr. While on paper, it sounds good, practically it is impossible as there could be a big backlash from the existing employees. Due to the salary reduction, if they quit the company, then the cost would go up by more than Rs 5 Cr!

The second option is to outsource the work to a third party. For the finished product, they can charge some amount. This way, the manpower expenses will remain the same, but the project cost will go up. This is also a costly solution as the company will be paying profit share and GST to the outsourced agency. However, this suffices the CTO's requirement.

Thanks,
Dinesh Divekar

Dear Dinesh,

Thank you for your response. I feel the second option could have helped him clear the interview. :)

His answers were:

Option 1: He will check if the existing set of resources can perform the same task.

Option 2: He will try to find out if, at a lower skill set and cost, new employees can be hired. For example, freshers can be hired. He will present a plan to the CTO for hiring at a very low cost.

Regards,
NM