Dear Colleagues, I wish to talk about the 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 out-going year.
This should naturally include but not limited to the following:
TRAINING & STAFF DEVELOPMENT.
This sub-head would include on a departmental basis number of personnel to attend courses both locally and abroad, duration of such courses, cost implication as well, and other related logistics that would be attached to such e.g. ticketing, hotel booking.
It should be noted here that Companies with there 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 especsially the training functionaries.
COMPENSATION.
This is another issue that the HR has to as a matter of urgency take upon his/herself to carryout way ahead of Management if need be.
On a regular basis HR should carry out compensation survey within and outside the Company's industry and compare notes putting in mind the larger business environment and all other variables-inflation rate, tax policy, cost of living etal
Having done the survey an estimated compensation budget is presented to Management also putting in mind employees that ought to be elevated which implies an increment, vacancies opened 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 etal
It is again the duty of the HR to see to it that there is fairness and equity in the appointment/placement of staffers-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 recriutment 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 over-head been reduced to a marginal level.
For instance working towards a properly organized Company owned training centre, this would certainly reduce the total amount that falls under this sub-head,
When the right personnels are recruited there would be a positive retention result hence reducing labour turn-over the finanacial cost that goes with it.
A more recent way of saving money from overheads is the introduction of a Local Area Network in the work place, this allows for computer to computer interactions within the office thereby reducing stationery consumption and in general time also is saved by officer not leaving there 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.
Afolabi Ajayi
From Nigeria, Lagos
6Firstly 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 out-going year.
This should naturally include but not limited to the following:
TRAINING & STAFF DEVELOPMENT.
This sub-head would include on a departmental basis number of personnel to attend courses both locally and abroad, duration of such courses, cost implication as well, and other related logistics that would be attached to such e.g. ticketing, hotel booking.
It should be noted here that Companies with there 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 especsially the training functionaries.
COMPENSATION.
This is another issue that the HR has to as a matter of urgency take upon his/herself to carryout way ahead of Management if need be.
On a regular basis HR should carry out compensation survey within and outside the Company's industry and compare notes putting in mind the larger business environment and all other variables-inflation rate, tax policy, cost of living etal
Having done the survey an estimated compensation budget is presented to Management also putting in mind employees that ought to be elevated which implies an increment, vacancies opened 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 etal
It is again the duty of the HR to see to it that there is fairness and equity in the appointment/placement of staffers-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 recriutment 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 over-head been reduced to a marginal level.
For instance working towards a properly organized Company owned training centre, this would certainly reduce the total amount that falls under this sub-head,
When the right personnels are recruited there would be a positive retention result hence reducing labour turn-over the finanacial cost that goes with it.
A more recent way of saving money from overheads is the introduction of a Local Area Network in the work place, this allows for computer to computer interactions within the office thereby reducing stationery consumption and in general time also is saved by officer not leaving there 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.
Afolabi Ajayi
From Nigeria, Lagos
Afolabi,
Hi!
The financial responsibility of HR can vary from organization to organization. I have seen HR being tasked to prepare all its financial requirements for a given period, only to be told that many of the activities proposed cannot be funded.
HR must realize that in the overall management of an organization, personnel cost is expected to be within certain limits of the total corporate operating budget. Also, personnel cost beyond a certain percentage of production cost is considered to be inefficiency and not cost-effective.
The HR professional must therefore find out from top management these allowable limits within their organization. Some would say 10% is the upper limit.
What do you and your experience say?
Best wishes.
Ed Llarena, Jr.
Managing Partner
Emilla Consulting
From Philippines, Parañaque
Hi!
The financial responsibility of HR can vary from organization to organization. I have seen HR being tasked to prepare all its financial requirements for a given period, only to be told that many of the activities proposed cannot be funded.
HR must realize that in the overall management of an organization, personnel cost is expected to be within certain limits of the total corporate operating budget. Also, personnel cost beyond a certain percentage of production cost is considered to be inefficiency and not cost-effective.
The HR professional must therefore find out from top management these allowable limits within their organization. Some would say 10% is the upper limit.
What do you and your experience say?
Best wishes.
Ed Llarena, Jr.
Managing Partner
Emilla Consulting
From Philippines, Parañaque
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