⚡Subscribe for the Yearly Pro plan, and get the next 6 months free.⚡Offer valid till 31st March 2024.
⚡Subscribe for the Annual Pro plan, and get the next 6 months free.⚡Offer valid till 31 March 2024.
Click to avail!
⚡ Join us for the Silver Jubilee episode of our LinkedIn talk show. ⚡
Register here

Only for Limited Customers

A start-up friendly guide to plan your HR budget in 2023

Tanvi

December 4, 2022

Every startup needs to hire talented resources and invest in the growth of employees.

But major expenses like these can become an immense barrier to growing a successful business.

This article will break down the crucial line items you need to include in your HR budget 2023, in order to get a clear overview of what they will cost.

So, let’s get straight to it, shall we?

How to plan HR budget

What is an HR budget?

HR budget is the planning and allocating funds for crucial HR processes during the year.

HR budget is a key factor in the growth of any company. It helps in increasing productivity, enhancing quality and maintaining a healthy work environment for employees. It also helps in building employee morale and retention rates.

In order to maintain a healthy work environment for employees, companies should allocate HR budget for various activities like training, counselling, wellness programs, benefits packages etc.

What is an HR budget?

HR budget is the amount of money that a company or an organization has set aside for their HR department. A budget can be used for recruitment, training, and other HR related expenses.

There are many different factors that affect the size and shape of a particular HR budget.

HR budget includes:

  • The size and scope of the company
  • The industry
  • The company's financial situation
  • Whether or not it has any debt

This budget allows you to plan your capital usage wisely and cover anticipated costs such as hiring talents, rewards, software costs, etc., whether you’re a start-up or an established business.

Why HR Budget is important in a start-up?

With a well-planned HR budget, you clearly understand how much finance to allocate, where to allocate it, so that important decisions don’t get stuck during the year.

A funded start-up hurdle to expand the teams. With an HR budget, you clearly understand the staffing need and can prevent the over-hiring mistake to a great extent.

With the HR budget, you can focus on the career growth of your employees with learning & development programs and upskilling efforts.

It helps you to recruit talented resources and reduce the employee churn rate to a great degree.

Important line items to consider in your HR budget 2023

Important line items to consider in your HR budget 2023

Recruitment Talents

The success of a startup greatly depends on the experienced professional they hire. And, hunting for talent is no less than a never-ending battle.

Therefore, your HR budget should include different cost headers such as advertising the job postings, conducting interviews, background checks, paying hiring agencies, employee relocation, and onboarding costs.

This way, you can ensure that cost doesn’t become a hurdle in finding the right resource.

Salaries, Rewards & Incentives

With new hires salaries, promotions & appraisal- the salary component in your HR budget becomes incremental in nature.

Therefore, you should consider a 3- 5% hike from your last year’s salary budget to ensure an easy flow of funds.

Plus, you should also consider the extra cost incurred due to an increase in the health policy premium, employee retention cost, over time, and other perks if you expect them to add/increase in the current year.

Enhancing your Workplace Productivity with We360.ai

Schedule a Demo

Click here

Learning & Development Program

Learning & development is the most crucial to polish the skills of employees yet it is often neglected in most organizations.

With regular training, employees concrete their knowledge, have better job satisfaction, stay motivated, and become more efficient with less monitoring.

The best part is that with motivated employees you observe less absenteeism and quality work.

So, learning and development should be carefully planned and added to your HR budget.

HR Tech Solutions

This is an important item to consider in the HR budget so make sure you don’t miss it.

Not just sales or marketing, HR teams also need to pace up and adopt technology in order to attract, hire & retain talent efficiently.

Right from creating the talent pool, to onboarding and further managing employees’ performance, you need robust solutions in place.

If you are looking for a rounder software that can track attendance, project performance, and employees daily activities, your search ends with We360.ai

Employee Benefit Programs

Employee benefits could become an important point for a job candidate while choosing your organization over your competitor.

Employee family health insurance policy, gratuity fund, online medication consultation plan, corporate plan of fitness programs, accidental coverage (if the nature of the job includes traveling), vacations and paid time off, medical check-up camps, etc are all important things to consider in your HR budget.

What is format of an HR budget?

The HR budget is the document that is used to describe the cost of a business's human resources. This includes salary, benefits, long term incentive plans, bonuses, and other elements that are considered part of an employee’s compensation package.

The HR budget should be formatted in a way that it can be easily understood by employees who have varying levels of experience and knowledge. It should also be easy to read and understand for managers who are not familiar with accounting terminology and online accounting services

The Sample format for an HR budget is as follows:

  • The first section should include the total amount of money that will be allocated to all employees in the company throughout the year.
  • The second section should include a breakdown of what each type of compensation costs per employee per month or year.
  • The third section should be where you list any additional benefits or perks that each employee will receive throughout the year.

The future of HR budgets

The future of HR budgets is a complex issue. The key trends in HR budgets for 2022 would be:

  • Emphasis on employee happiness and retention.
  • Focus on the digital world.
  • More emphasis on technology, automation, and robotics.
  • More focus on the individualized experience.
  • Focus on the customer experience.

Final Thoughts

Hope you now have better clarity on what all should be included in the HR budget.

If you are up to utilizing your funds wisely in 2022, make sure your HR budget makes room for all the line items we mentioned above.

In addition to these line items, let your innovation play and find ways to help your employees and organization reach their respective goals.

Share

Recent Post

We360.ai Motto

Making a Mark in 2024: Featured on Leading Platforms

Explore We360.ai, revolutionizing employee monitoring with cutting-edge analytics. Discover their mission, features, and industry accolades. Join their innovation journey in 2024. Read more in the blog.

We360.ai Motto
We360.ai

We360.ai's 2023 Year Wrap: A Chronicle of Achievements, Innovations, and Future Endeavors

Embark on a captivating journey through We360.ai's transformative 2023, where achievements, innovations, and unprecedented growth converge. Join us in reflecting on pivotal moments that shaped our path and anticipate an even brighter future. Explore the symphony of success with We360.ai!

We360.ai Motto
Culture

10 Key Insights for Enhanced Productivity

Unlock productivity secrets with 'Unlocking Workforce Potential: 10 Key Insights.' Discover actionable tips to maximize your team's capabilities and elevate workplace performance.

Still need help? 

No worries at all! Drop us a line at sales@we360.ai or hit us up in the chat at the bottom right corner, and we'll help you out. That's what we're here for!

GET STARTED FOR FREE

First 7 days - FREE. Absolutely No Strings Attached.