Take It From the Top: Successful Budget Strategy

One of the many struggles HR managers face is being the middle person between front-line employees and the leadership team—feeling stuck between hearing what front-line employees want and finding a way to demonstrate the importance of those requests to top-level decision makers. Often, it seems that the only thing standing between the request and the approval is the delivery of the message. If only there was a secret formula for that!

Meet James McDevitt: James is the Vice President of Human Resources at MRA and has more than 20 years of experience successfully leading teams. He is a great problem solver, with a strong belief in collaboration. An expert communicator, he has agreed to share tips for managers to communicate effectively with leadership while working toward desired outcomes. We hope you enjoy the MRA Edge new feature article—Take It From the Top.

Looking toward 2023, the budgeting begins, and so do negotiations. The initial wish list is created for recruiting, training, benefits, engagement, and numerous other items that will make accomplishing next year’s goals easier. The final version of a budget typically looks significantly different from the first. How can you bridge that gap and come closer to the original plan?

HR professionals are in a unique position to add value to their organization. Those who are truly embedded within their organization can contribute to the development and implementation of the business strategy—while advocating for their employees.

Budget season is a great opportunity for HR professionals to demonstrate this value to their organization. It is important for HR to be involved in the budget process, to help ensure that important people strategies get addressed in the budget, are properly funded, and are aligned with the business strategy.

To be truly effective, HR needs to fully understand the mission, vision, and strategic plan for the business. These are the guiding principles and direction the organization is heading. If you are unclear, ask your business partners. Use the budget planning process to also ask questions of the business—how does the budget meet the goals of the organization?

A good practice is to facilitate a talent and organization review prior to starting the budget planning. Ask the important questions, while keeping the established goals in mind:

• How should the organization be structured in order to achieve its goals?
• Are the right people in the right jobs?
• Are there gaps in resources that need to be addressed?
• Are the identified gaps included in the budget? For example, if you are going to add a product line, including hiring a new team:
  • Identify which roles need to be added and when, and budget accordingly.
  • Include any recruitment costs that are likely to be incurred.

Meet with business leaders and discuss how many employees will be needed to deliver the strategic plan. In a production facility, you may want to start with how many work hours are required, then calculate how many employees are needed to work those hours. Take into account anticipated absences, such as vacation or sick time. For example, you may find that in order to have 100 employees on the floor at any given time, you may need to hire 106 employees. Discuss this with your leaders. You may want to offer overtime instead of hiring extra employees. Either way, it needs to be discussed, agreed upon, and then budgeted for. HR’s goal is to strategically support the business, and this is one way to demonstrate value.

If a manager wants to add a position, discuss the strategic value-add for that hire. Steer the conversation away from just replacing someone who has left. Partner with the manager and discuss what problem that person is going to solve and how he or she will contribute to the strategic plan and the bottom line. Do we really need that person? If so, why? What is the return on investment, or ROI?

Use these questions to guide your conversations:

• So what? What problem is this going to solve?
• What is the value this will contribute to the organization/ department?
• How will this add to the bottom line? What is the return on investment (ROI)?

Taking these tips into consideration can help HR advocate for employees by translating their needs and what they are asking for into a language that speaks to leadership.