What Are the Best Practices for HR Budgeting?
From saving a lot by automating to using API integrations, here are six answers to the question, “What do you believe are some best practices for HR to manage its budget?”
- Streamlining Pre-Employment
- Automating Tedious Tasks
- Conducting a Needs Analysis
- Buying Right the First Time
- Avoiding Pay-Per-Use Pricing Models
- Leveraging Integrations Between Providers
Streamlining Pre-Employment
You can actually save a lot by automating as many HR tasks as possible. By investing in software that handles the more mundane tasks—like recruiting and applicant tracking—there’s no need to set aside much of the budget to pay someone to do the same thing.
It may surprise you at how much money you save by automating pre-employment testing, thus reducing your time to hire. The traditional way of doing things in HR is far more expensive and wasteful than leveraging the latest innovations in HR tech to improve your hiring process.
Linda Scorzo
CEO, Hiring Indicators
Automating Tedious Tasks
The biggest part of any HR budget is the staff. Having HR managers spend their valuable (and costly) time performing tedious tasks such as sending endless rejection emails, sending individual Google Docs with candidate assessment tasks, and replying to questions such as “What is the status of my application?” can end up costing companies much more than HR tools they can use.
Automating candidate communication and pre-hire assessments frees up a lot of HR managers’ time. This also ensures they spend the budget on productive activities and do not respond to many similar emails.
Since we developed our automation, we use our allocated HR budget on activities that make a difference and improve our organization instead of staying stagnant because of tedious tasks that HRs need to perform.
Gordana Sretenovic
Co-Founder, Workello
Conducting a Needs Analysis
Managing an HR budget can be challenging for HR professionals, especially in today’s rapidly changing technology landscape. HR should review their needs to manage their budget better. Conducting a needs analysis is an essential step in managing their budget effectively.
It involves evaluating the current functions, processes, and systems to determine what’s working well and what areas require additional resources or investments. The goal of the needs analysis is to identify the most critical HR functions and allocate funds accordingly to ensure that these functions receive support.
Luciano Colos
Founder and CEO, Pitchgrade
Buying Right the First Time
You won’t save money by being thrifty with your HR products. Rather than trying to nickel-and-dime your way into savings by buying inferior products, it’s better to get exactly what you need.
Make a list of your HR team’s primary responsibilities, ranked by importance and frequency. Any HR products that you buy for your business should align with the scale of the needs you’ve been able to list out.
They should prioritize making the most frequent or arduous tasks easier for your HR team so that they can better focus on things that may require more personal attention.
Not only will this make work more efficient, but it will spare your business from having to repurchase better products when one doesn’t work or becomes defunct because of a lack of support or the dropping of a product by its creator. Buy what you need the first time, and you’ll save in the long run.
Max Ade, CEO, Pickleheads
Avoiding Pay-Per-Use Pricing Models
In my experience, HR professionals show proper due diligence regarding procurement, but only at the start. Once you complete implementation and the related procurement bureaucracy, that is when HR spending loses focus and can easily get carried away.
As a result, I strongly recommend avoiding pay-per-use pricing models when tightening the HR budget. More often than not, clients underestimate their expected usage, resulting in expensive overages that weren’t originally accounted for.
This throws off your projections, making additional implementations down the line difficult. Instead, opt for fixed-cost licenses simplifying HR spend and ensuring predictable costs throughout the year.
Ben Schwencke
Business Psychologist, Test Partnership
Leveraging Integrations Between Providers
HR professionals usually have to choose between convenience and cost. On one hand, you can choose one provider for all your software needs, saving you from managing multiple platforms.
However, this prevents you from choosing more cost-effective providers for each solution, which increases costs. However, by using API integrations, you can link up your various HR platforms, granting the best of both worlds.
You can choose your preferred suppliers for each function but host them under a unified platform, helping to prevent so-called “app fatigue.”
For example, by using an applicant tracking system (ATS) that integrates with your video interview software, online testing platform, and team collaboration software, you can use your ATS as a central HR hub, simplifying the process while allowing you to minimize your HR spending.
Oliver Savill
CEO and Founder, Assessment Day
Submit Your Answer
Would you like to submit an alternate answer to the question, “HR always seems to be limited by budget. What’s a best practice for HR to manage its budget – especially with all the HR tech now available?”