Proactively embedding cost optimization as a business discipline for HR is a strategic practice.
While organizations adapt to fluctuating economic conditions, HR must ensure that spending remains fully aligned with organizational strategy and expected business value. However, challenging workloads in HR can leave little room for practitioners to develop the key financial skills required to optimize costs effectively and strategically.
A starting point for cost optimization is adjusting your frame of mind. Know that it’s not just about making difficult cuts – in reality, it’s a creative pursuit that’s about thriving in all circumstances, not just surviving.
Impact & Result
Commit to proactive cost optimization as a strategic HR practice, showcasing the HR organization’s contribution to the organization. Integrate readiness for unforeseen challenges into strategies, ensuring proactive financial management before reactive, aggressive measures are needed.
Research & Tools
1. Prepare and evaluate
Evaluate factors that impact the organization’s financial outcomes, establish
HR cost optimization goals, and select metrics to monitor progress toward goals.
2. Uncover and prioritize cost optimization initiatives
Determine negotiable and nonnegotiable constraints, brainstorm and shortlist cost optimization
initiatives, shortlist cost optimization initiatives, identify the criteria
that will impact the implementation of shortlisted initiatives, and create a
cost-optimization roadmap.
Plan both strategic and tactical communications,
build an executive presentation, align communication to promote strategic
change management, and plan to monitor progress and outcomes of the cost-optimization
initiatives.