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Evaluate the HR Budget Planning, Proposal, and Negotiation Strategy

From burden to boardroom: transform your HR budget to become a strategic partner.

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Contributors

  • Laura McAdam, President, Profitability Now
  • Tony Dimnik, Professor, Queens University
  • Simon Horton, Lead Trainer, Negotiation Mastery
  • Valerie Grub, Consultant, Val Grub & Associates, LTD

Your Challenge

  • Over 40% of organizations do not have a formal HR budget. Those that do have budgets suffer from poor data and declining resources.
  • Attempts at creating an effective HR budget suffer from a variety of underlying challenges, including: a view of HR as overhead rather than a business partner, a lack of time/knowledge to create an effective budget, and a struggle to demonstrate the value of HR investment.

Our Advice

Critical Insight

  • A well-defined process – such as the one suggested by McLean & Company – combined with a detailed project timeline will alleviate the stress associated with HR budgeting.
  • There should never be such a thing as an HR initiative, just business initiatives; every dollar spent in HR should help the business achieve its goals.
  • Consult with stakeholders before, during, and after budget creation for best results.

Impact and Result

  • Determine the gaps between business needs and current HR initiatives.
  • Use historical data to forecast next year’s HR operational costs.
  • Define HR projects that fill business gaps and forecast their costs.
  • Negotiate appropriately in order to maintain stakeholder satisfaction.

Research & Tools

1. Prepare for HR budget creation

Appreciate the important problems and opportunities related to HR budgeting and create a timeline to document milestones and deadlines for the HR budget.

2. Calculate HR operational costs

Forecast next year's HR operational costs.

3. Determine the financial value of the HR projects

Evaluate and project costs for proposed HR projects.

4. Communicate the budget outcome to stakeholders

Ensure all stakeholders are aware of the HR project deliverables for the next fiscal year.

Guided Implementations

This guided implementation is a four call advisory process.

Call #1 - Prepare for HR budget creation

Discuss any questions you have about McLean & Company’s HR budgeting process and clarify budgeting terms and concepts.

Call #2 - Link HR initiatives to business goals

Analyze the organization’s strategy, the results of your HR Business Vision survey, and the gaps identified between business needs and available HR resources.

Call #3 - Determine HR operational costs and determine HR project costs

Discuss the HR Budget Planning and the HR Project Value Analysis tools, the selection and prioritization of your projects, and any issues discovered during the meetings with your HR team.

Call #4 - Create and refine the budget proposal

Identify stakeholder communication strategies to use during the budgeting process, negotiate to reduce the severity of budget cuts, and mitigate the damage of budget cuts.

Onsite Workshop

Discuss This Workshop

Book Your Workshop

Onsite workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn't enough, we offer low-cost onsite delivery of our project workshops. We take you through every phase of your project and ensure that you have a roadmap in place to complete your project successfully.

Module 1: Make the Case

The Purpose

  • Establish metrics that will help you demonstrate the value and improvement achieved by evaluating and preparing both an operational and project-based budget plan.

Key Benefits Achieved

  • Use the data to assist with gaining stakeholder buy-in for strategic business-focused projects.

Activities

Outputs

1.1

Discuss the challenges that will be most significant in evaluating the HR budget process.

  • A list of challenges and discussions on how to overcome these barriers.
1.2

State expectations for the workshop.

1.3

Discuss the values and benefits leadership development.

Module 2: Link HR initiatives to business goals

The Purpose

  • Establish how the current HR strategy is meeting business goals and objectives.
  • Determine how the current HR strategy can become more closely aligned with the business to deliver value add.

Key Benefits Achieved

  • Identify how current HR strategy is meeting organizational goals.

Activities

Outputs

2.1

Evaluation of all proposed projects against business drivers.

  • A list of projects and their linkage to drivers and how they will help advance the business.

Module 3: Prioritizing the Projects

The Purpose

  • Establish which projects are key and must be delivered.
  • Establish projects that are not a priority and can be delayed should there be budget cuts.

Key Benefits Achieved

  • Prioritization of all projects based on linkages to business drivers.

Activities

Outputs

3.1

Discussion of top priority projects placed on a continuum of important to not important.

  • A list of prioritized projects.

Search Code: 74319
Published: March 2, 2014
Last Revised: September 18, 2014