HR budget planning for personnel training. That the coming year? Making an HR budget

When recruiting personnel, specialists preferably use the internal resources of the enterprise, i.e. persons released as a result of optimization of personnel numbers. Moreover, these are not always competent and responsible workers, despite the fact that these are people who have worked for many years at the enterprise. On the other hand, recruiting personnel from outside is not safe. Therefore, cooperation between the HR department and the Bratsk Employment Center, as well as with the city’s recruitment agencies, is extremely necessary.

Personnel selection is carried out by the heads of the LCP departments, which distracts them from their main responsibilities, and also entails that the selection is carried out not on the basis of the production’s need for qualified employees, but on the personal preferences and interests of the managers. This once again confirms that cooperation with professional agencies is necessary.

The absence of a personnel specialist for a specific organization and the fact that the personnel structure is managed by one person, to whom a number of other divisions of Progress-Grant OJSC are subordinate, also brings significant inconvenience to both the specialists themselves and the employees interacting with them. Therefore, it is necessary to assign a separate HR specialist to each production, who would deal not only with hiring and firing employees, but also with their selection, selection, distribution and training.

In most medium-sized and small companies, as experience shows, the allocation of personnel service expense items in the general budget of the company is not provided; Progress-Garant OJSC was no exception. As a rule, long-term plans on the basis of which the HR budget is based are developed only in large organizations that are firmly on their feet. The filling of the budget of the personnel department depends on the level of development of the company and the range of functions that this service performs. At some enterprises, the wage fund for all personnel is included in the budget of the personnel department, and this is quite reasonable, since determining the amount of wages is directly related to the processes of hiring, adaptation, assessment and determining ways to motivate employees.

The form of the document reflecting the budget is also determined by its content. The list of items included in the budget of the personnel department is approximately as follows:

Recruitment:

Placing advertisements in the media;

Payment for recruitment agency services;

Conducting pre-employment testing;

Participation in job fairs.

Employee adaptation:

Additional payment for mentors.

Evaluation and development:

Payment for services of assessment providers;

Purchase of special diagnostic programs for employee assessment.

4. Training:

1) external training;

Training of top managers;

Training of sales department employees;

Purchase;

Logistics, etc.;

2) corporate training center;

Products for coffee breaks;

Teaching materials, certificates;

Office equipment, consumables.

5. Personnel records management:

Purchase of work record forms, cards, forms, special storage cabinets, etc.

6. Corporate events:

Birthdays;

Holidays;

Issue of a corporate newspaper;

Conducting competitions.

7. Social package:

Gym rental;

Payment for health insurance (VHI);

Payment for travel packages;

Payment of financial assistance.

8. Business trips of department employees.

9. Salary of department employees:

Permanent part;

Compensation;

10. Expenses for maintaining the department:

Office expenses;

Participation in special personnel conferences and exhibitions;

Subscription to special literature, etc.

11. Labor protection:

Purchase of equipment.

How to predict expenses for certain expense items and where can you save? The cost of posting job advertisements in the media does not raise any questions: each publication and website has a price list. And the maximum that a personnel manager can do to save budget funds is to negotiate discounts on publications.

In theory, there should be no difficulties in paying for the services of recruitment agencies either: their price, as a rule, is 12-20% of the annual income of the selected employee. However, in many companies (especially small ones), the issue of cooperation with a recruitment agency is decided individually for each vacancy, and it is quite difficult to foresee the amount of work and its cost in advance. The following technique may be effective: set the amount for recruiting through recruitment agencies not for a month, but for a quarter. An approved personnel selection/rotation plan, as well as a presentation of the results of a tender held among recruitment agencies, will greatly facilitate the task of the personnel officer during the discussion of the issue of financing this article.

Testing during selection can be carried out either in-house or with the involvement of professionals from other organizations. An argument in favor of the latter option can be the recruitment plan, as well as the cost of a mistake if hiring is carried out without testing (money spent on a probationary period, re-searching for a specialist, etc.). An additional cost for testing may be the purchase or creation of a computer program.

Onboarding costs typically include the cost of mentors and the cost of developing and producing company brochures, which can be allocated to both the HR budget and the advertising department.

As for personnel assessment and development, if a company conducts certification on its own, this does not require significant financial resources. When choosing a contractor company, it is advisable to systematize the results of the tender among the companies conducting the assessment, as well as feedback on the quality of their work.

The costs of training events include the cost of searching and selecting provider companies (in the case of external training), the average market price of certain trainings, seminars, etc. In addition, the “Training” budget includes the cost of materials and equipment for training facilities, as well as methodological literature. Since this expense item can amount to a very significant amount, before defending it, it is advisable to discuss with management the list of equipment and materials planned for purchase. The HR manager’s report on the financial effect of already conducted trainings will greatly facilitate the process of agreeing on the training budget.

If the head of an enterprise believes that personnel records management does not require special investments, he is mistaken. For normal document management, special computer programs are required, which are also periodically updated. A very effective way to convince management of the need to purchase automated systems can be to provide a list of regulatory documents that must be available at the enterprise, and possible penalties in case of their absence, as well as the results of an hourly calculation of time for manual paperwork.

The amount of funds for organizing corporate events, as well as the list of additional compensation included in the social package, are determined by the company’s policy. And, as a rule, if the employer has already decided to include one or another item in this list, then discussing and allocating money for its implementation does not cause any difficulties. One piece of advice: you should be aware of the average market prices for services included in the social package and the conditions associated with them.

With regard to employee salary planning, difficulties may arise in the following cases:

Based on the results of the assessment or review of the employee’s compensation, the salary was increased or decreased, and in the budget its previous amount was fixed until the end of the year;

The employee performed one-time work, for which he was awarded a lump sum bonus, and the wage fund changed accordingly.

Because Since this recommendation applies only to HR specialists, it is better not to go into complex calculation schemes and stipulate the size of the quarterly bonus fund. Its distribution occurs in accordance with incentive orders, decisions based on evaluation results, etc. In this case, there is no risk of exceeding the budget for wages.

The current expenses of the personnel department can relate to both the personnel service budget and general corporate (administrative) expenses. Typically, they include the cost of office supplies, water (if it is imported), subscriptions to newspapers and magazines for the unit, etc. As a rule, the amount of these costs is constant from month to month.

Budget planning begins with preparation. It includes the collection and, if necessary, the creation of fundamental documents: plans for hiring personnel, training and development; provisions on social and corporate policy, material incentives, salaries, mentoring; staffing schedule, etc. This stage also includes collecting information, holding tenders, finding out the cost of the necessary equipment, materials, etc.

Then you need to decide on the form of the budget. If the document is large, it is advisable to divide it into departments, allocate a sheet for each month, and summarize significant data from each in a summary sheet based on the results of the year.

During the defense process, the following is clarified: who will exercise control over the execution and compliance with the budget, how to receive money (by application for payment or in another way), what amounts require additional approval (for example, when selecting candidates through a recruitment agency), how to dispose of unused current month funds.

However, the budget, like any “living” project, must be adjusted regularly. In practice, changes are most often made to articles relating to training. Their weight in the total budget can reach 40%. Recruitment costs are also usually subject to adjustments. Some of them, for example those related to seasonal migration of people or reorganization, may be planned. At the same time, losses are impossible to predict.

Having a HR department budget in the company allows you to solve the following problems:

Clearly formulate the goals of working with personnel;

Achieve transparency of HR service activities and indicators

Reporting;

Clearly explain to management how much it costs to maintain the HR department itself;

Formalize the calculation of such important indicators for personnel policy as the cost of selecting a specialist, his retention and development.

The amount offered is quite significant. Therefore, it is necessary to determine the sources through which it is possible to form a budget for the personnel service. In the next chapter, the author will make an economic calculation, with the help of which it will be possible to determine the source of budget formation.

An approximate form of the HR service budget is presented in table. 8.

Table 8 HR budget form (RUB)

When planning the annual HR budget for training, problems arise in companies where there is no clear system for planning costs associated with employee training, but separate training events are carried out. What should an HR specialist responsible for the training process do in this situation?

From the material you will learn:

• How to plan an HR budget for personnel training;
• What are the features of planning an HR budget for executive training?

First of all, personnel should be divided into two categories - managers and specialists. After analyzing the training needs of these categories of workers, taking into account the innovations, you can begin to draw up a training plan.

HR budget planning for specialist training

As for the HR budget for training specialists, the need for their training should be identified based on the final results of the analysis of the assessment of their knowledge and skills.

This approach to cost planning can be used in organizations with a regular system of personnel assessment and training.

Read about the topic in the e-zine

You can begin by drawing up plans for training specialists without assessing their knowledge and skills. The main thing is to determine the significance of these workers for the enterprise’s activities, to identify their level of efficiency, as well as the likelihood of negative consequences of incompetence.

Important!

The amount of costs for external training consists of the cost of educational institutions’ services and business travel expenses. If the training process takes place on the job, the main expense is the salary of the mentor.

Particular attention should be paid to training specialists with a high level of efficiency working in those structural divisions that bring the company the main profit. It is advisable to start training with these specialists, even if their knowledge and skills have not been assessed.

Having identified the employees who should be trained first, the HR service employee selects forms of training for them, taking into account its purpose and the amount of allocated funds. Then applications for training are drawn up, the wishes of department heads are summarized, and training goals are correlated with the organization’s plans for the next year.

Training costs should be adjusted for inflation. It is important that training is optimal in terms of cost and quality. It is highly desirable that an apprenticeship agreement be concluded with employees sent for training, according to which an employee who has completed retraining or advanced training courses will be obliged to work out the resources invested in his training. The apprenticeship agreement can stipulate that in the event of dismissal, the employee must reimburse the company for training costs, including business trip expenses. Using this approach will allow the company to avoid possible financial losses.

Planning an HR budget for executive training

Now let’s look at planning an HR budget for executive training. It is important for managers to increase the level of management competencies. As the current practice in Russia shows, as a rule, professional specialists with extensive work experience are appointed to the position of managers. The management team of the organization must be able to plan, build effective communications, have project management and work organization skills. Depending on the needs of the organization, forms and methods of improving managers are selected.

Example

The changed approach to management has activated the need for the development of competencies among the company's top managers, such as project management, description and optimization of business processes. Accordingly, the priorities in training managers are precisely these skills.

For individual managers, you can take advantage of both individual training programs, for example, project management, and group trainings to develop the skills necessary for all categories of managers (the ability to make presentations, conduct business negotiations). The amount of training costs in the first case will be similar to the costs for ordinary specialists. In the second, it is better to choose corporate training in the form of a seminar or training, then the main cost items will be the costs associated with the cost of the seminar (training) and the teacher’s travel expenses.

Individual training of managers significantly increases costs. You can significantly reduce costs by inviting a trainer to conduct training in a group. Managers participating in such training master the technology of preparing management decisions that are adapted to the specific conditions of the organization.

When those employees whose training is planned for the next year have been selected, and the optimal form and place of training have been determined for each, all costs should be combined into a common plan and summed up.

Important!

If there is no assessment of personnel, then the purpose of their training may be determined incorrectly, which means it is quite possible that past mistakes will be repeated. To avoid this, in the future it will be necessary to introduce a high-quality personnel assessment and development system at the enterprise, including a description of the basic requirements for employees, their key competencies, the development of assessment methods and a professional training program.

Attached files

• Job description of the vice president for personnel management, taking into account the requirements of the professional standard (form).doc
• Job description of the head of a structural unit, taking into account the requirements of the professional standard (form).doc
• Job description of a specialist in social programs taking into account the requirements of the professional standard (form).doc

Available to subscribers only

• Job description of the vice president for personnel management, taking into account the requirements of the professional standard (sample).doc
• Job description of the head of a structural unit, taking into account the requirements of the professional standard (sample).doc
• Job description of a specialist in social programs taking into account the requirements of the professional standard (sample).doc

Very soon you will have to defend the company’s HR budget. When discussing the costs of, say, payroll, the company's top officials may ask whether wages are inflated or whether the staff is overstaffed. It is possible that the owners and the CEO will want to discuss specific divisions. The HR service will probably also be affected.

Unfortunately, company management often suspects that there are many people in the personnel department who do not understand what they are doing, but receive good salaries. Hence, The HR department is too expensive for the company. The thought arises: should we cut costs on it? So that you have something to answer, draw up, in addition to the general HR budget, a separate budget for the personnel service. After all, you are the head of this unit. This means that you must understand what, how much and why you spend it. And most importantly, justify the costs and protect the HR service from unwanted decisions of the company’s management.

Consider what will need to be done next year in all areas of HR work. Make a plan

In other words, outline the usual professional tasks that the HR service will face next year in the main areas: selection, training, assessment, staff motivation. In a word, according to those that are in your company.

Make a table. In it, list the events that you need to carry out in 2018. Next to each, indicate the expenses. When you think the list is complete, add up the costs. Only don't forget to add 5-10% to account for price increases due to inflation. You will then add the total amount to the HR department’s budget.

The plan that you draw up will help you subsequently justify the budget of the HR service. A fragment of the plan is below. The main thing in the article Hide

Determine what other costs the HR service will incur besides those you indicated in the plan

Firstly, the plan did not include payroll costs for personnel services, secondly, expenses for activities that cannot be attributed to the usual, traditional functions of the HR service. Let's say for large-scale HR projects– implementation of a personnel assessment system in the company or automation of personnel management processes.

Consider whether there are any other costs that were not included in the plan, although perhaps not for large-scale events. Eg, for maintenance of the internal portal and preparation of the corporate newspaper. Don’t forget to calculate the costs of these projects and include them in the HR budget. In addition, separately calculate HR training costs. You will most likely be asked with passion during your budget defense about how expedient the training and, consequently, the costs of it are.

Oksana SELIVANOVA,

HR Director at RDTECH

Constantly conduct HR analytics to easily justify costs to owners

When drawing up a budget, remember: we are talking about the costs of the company, and therefore the owners. Be prepared for the company's top officials to ask: “What will I get in return? Why VHI, English, expenses for external recruiters, corporate holidays? The HR director will not be able to answer these questions without calculating the return on these activities. Therefore, I constantly conduct HR analytics in order to have information about the effectiveness of investments in personnel.

When calculating the payroll of the personnel service, do not forget about insurance contributions to extra-budgetary funds

Summarize salaries of all employees and bonuses– both those that are a variable part of the salary and are paid monthly, and those that are provided for payment based on the results of work for the reporting period. Let's say a bonus for meeting KPIs. Set aside an amount that will be enough to pay bonuses if all HR employees meet key performance indicators.

To reward subordinates additionally for special merits, set aside a separate amount. Let's say form the HR Director Fund and plan your money there. Typically, HR directors contribute an amount equal to 2–3% of the total amount of all HR salaries and bonuses to the Fund. You can also spend them on unforeseen expenses in your current activities.

Don't forget to budget money and for additional staffing units that you plan to introduce into the HR service next year.

Be sure to calculate the amount of insurance premiums that the accounting department will charge on the salaries of HR service employees and pay to state extra-budgetary funds. After all, the total amount of these contributions will be included in the costs of the personnel service. In the Pension Fund - 22%, the Social Insurance Fund - 2.9%, the Federal Compulsory Medical Insurance Fund - 5.1%. But you also need to add a contribution for insurance against accidents and occupational diseases. The rate depends on the type of activity of the company. We will accept the base rate as 0.2%. The general contribution rate is now 30.2%. For an example of calculating the costs of payroll for HR services, see.

Alena MIKHALEV,

Head of Recruitment and Personnel Development at Europlast Decor

We include in the budget the costs of training newcomers. They actually get a new profession

Training with us is the main item in the budget, since it is almost impossible to select a ready-made specialist for our production. Each newly hired employee undergoes not just introductory training, but receives a new profession.

Costs for HR projects: hold an absentee tender among providers

Costs for HR projects, as noted above, should be calculated separately for each, since they are especially important for the company’s business. In addition, their costs are often significant. Formulate the name of the project so that it is clear for what purpose it is being implemented and what will be the evaluation criterion. For example, “Implement a field training system to increase revenue by 30% within three months.”

Indicate when the project should be completed and estimate costs. If you plan to involve third-party specialists, hold an absentee tender among service provider companies. Look at the prices on the websites of different companies, negotiate and choose the optimal conditions. Approve the price and put these figures into your budget.

Example

The HR service of a logistics company will have to implement a chatbot in personnel selection. As part of the project, 6 training sessions will be organized for recruiters on the use of chatbots. The HR director counted the expenses. Thus, the services of an external trainer will cost the company 52,300 rubles. The average salary of 8 participants is 22,700 rubles. Production of handouts – 5000 rubles. You will have to pay 10,000 rubles to organize a coffee break. Total 90,000 rubles. For 6 trainings – 540,000 rubles. To this, the HR director added the cost of renting a chatbot per year – 360,000 rubles. Thus, the total cost is 900,000 rubles.

Tatiana VOLKOVA,

HR Director at Ingrad Group of Companies

To create a budget for a corporate event, remember how much you spent last year

I create the budget for corporate events by analogy with previous periods. For example, the cost of the event amounted to 3,000,000 rubles. 200 people took part in it. This means that there are 15,000 rubles per participant. Then I multiply this amount by the number of employees we currently have, and add another 10–15% for inflation and additional expenses. If the company has not held corporate events before, I consult with several contractors, request figures, evaluate proposals and select acceptable ones. I enter the amount into the budget.

HR Training: Don't Overlook the Costs

If you do not take them into account and do not include them in the budget, the financial service will still write it off to your department. This means that you may not have enough funds for everything you planned. Do not forget: training costs are divided into direct and related. Direct costs are the cost of the trainer’s work, as well as the preparation of teaching materials (slides, videos, computer programs). Related expenses, as we have already indicated, include, for example, the cost of renting premises, purchasing supplies, food for participants and teachers, and sometimes travel expenses are included here.

If you intend to send several people to a training organization, then you are entitled to discount. But you can ignore it– let this be your reserve for unexpected expenses. For example, to increase tuition prices.

Example

The HR director calculated the costs of a two-day training for five managers on personnel assessment. Direct costs: the cost of a trainer (3,000 rubles/hour) for 2 days for 7 hours every day – 42,000 rubles. Preparation of handouts (slides, videos, computer programs) – 4,000 rubles. Associated costs: rental of premises (2 days) - 10,000 rubles, equipment - 8,000 rubles, consumables - 2,000 rubles, meals for participants and trainer (lunch and coffee breaks) - 50,000 rubles. The head of human resources summarized all the costs. The result was 116,000 rubles (42,000 + 4,000 + 10,000 + 8,000 + 2,000 + 50,000).

Anastasia LOBAREVA,

HR Director at GlavElectroSnab (Novosibirsk)

Discuss with the CEO whether you can redistribute costs within the budget without going beyond it

I had to prepare several versions of the HR budget: for a season, six months, a year and even for three years. Redistributing expenses within the seasonal budget (say, for the summer, during the New Year holidays) is not allowed. The maximum that an HR director can do is, if necessary, to transfer the amount from one cost item to another. Now I'm preparing a budget for the year. Within it, you can adjust your expenses - spend a little more than planned in one month, a little less in another. But there is a limitation: overspending should not exceed 10%. This is especially true for payroll.

If you intend to buy tests to evaluate candidates, budget for this

Calculate how much you will have to pay for the automated methods themselves, their updating, and installation of computer equipment. Enough have 2–3 personal assessment methods in the selection department’s arsenal(MMPI, CATTELL test) and the same number of tests for intelligence, speed of thinking (CAT) and attention (MUNSTERBERG test).

Compare prices from several companies and make your choice. If possible, purchase professional tests to assess the knowledge, skills and abilities of applicants. For example, when selecting an accountant, you need to check how the candidate works in a specialized program, whether he can write the necessary entries and make the necessary calculations. And for a lawyer, provide tests for drawing up a statement of claim and examining the contract.

Put everything into a single table. This is the budget of the HR service

Data on the budget items of the personnel service for the current year is necessary so that both you and the members of the budget commission can compare expenses for the current and next year. Moreover, for last year, indicate planned and actual expenses. Do two columns for explanations. In the first column, indicate why some actual expenses for the current year deviated from the planned ones. In the second, note what caused the deviations in the planned amount of costs for 2018 from the amount of costs that were included in the 2017 budget. Please provide explanations if deviations exceed 10%.

Example

When the HR director presented the first version of the personnel service budget for the next year, the financial director immediately noticed fluctuations in the costs of paying for the services of recruitment agencies. So, for 2017, the head of the HR service budgeted 800,000 rubles. However, not a penny of this amount was spent. But next year the HR Director plans 1,080,000 rubles for the same purposes. "Where is the logic?" – asked the financial director. HR explained: “Yes, this year we did not spend money on the services of recruitment agencies, since we managed to organize the selection on our own. However, next year this will not be possible, since new divisions are opening in the regions and agencies will have to be involved.” This explanation satisfied the financial director.

It’s also bad when actual costs constantly exceed planned ones, and when, on the contrary, the HR service regularly spends noticeably less. If there is an overrun, this means that you make mistakes in planning and do not include all the expenses that are necessary. If funds remain unspent, The HR Director either pledged large sums, or the HR service did not accomplish something as planned. Let’s say in 2017 they planned to spend 1,400,000 rubles on job advertisements, but in fact the costs amounted to 1,000,000 rubles. On the one hand, this is budget savings. But is there a shortage of staff, will this harm the work of the company? Find out the true reasons for fluctuations between actual and plan data and eliminate them. A sample draft budget for the HR service is below. The main thing in the article Hide

Irina BELOVA,

HR Director of the group of companies "NORTEX" (Ivanovo)

Show the CEO that spending on social projects will bring real benefits in the future

We pay special attention to social budget items: voluntary medical insurance, professional skills competitions and special payments to valuable employees who have worked at the enterprise for more than 10 years. By justifying the amount of costs for this, I show what fruits a particular project will bring in the long term. In particular, my task is to popularize our company as an attractive employer, to interest young people, as well as to identify and disseminate the best professional practices.

The main thing in the article Hide Budget protection: be prepared to justify costs, answer commission questions

When you present your budget proposal, take with you all the materials you used to create it. These could be, for example, training programs, detailed plan of HR activities for next year and other documents. Be prepared to give detailed explanations for each budget item and answer questions from top executives. What questions might these be and how should you answer them?

Question 1: “Are there too many employees in the HR department and are their salaries inflated?” When justifying the number of people in the personnel service, appeal to the working standards of HR people and their workload in the company. Provide research data (for example Axes Monitor) about How many new recruits should one recruiter select?. Usually – 9–12 employees for mass positions and 4–5 specialists and lower-level managers. One training specialist in a company is enough for 500 people, and a corporate trainer is able to efficiently work out 12 training days a month using ready-made programs and conduct several new trainings. And finally, human resources department inspector with minimal automation (1C) it can manage 400–600 employees.

Confirm that salaries are not inflated using data from the salary survey. Your task is to convey to the company management that the HR department employs the best and their salaries do not exceed market values.

Question 2: “Isn’t it better to transfer the selection to a recruitment agency and cut recruiters?” When answering this question, make a calculation and show that the agency’s services are much more expensive than the costs of your own recruiters.

Example

The personnel selection department of a pharmaceutical company has 4 HR managers. Each person’s income is 60,000 rubles per month, including bonus. Only 240,000 rubles per month
(60,000 rubles × 4 people). The insurance contributions paid by the employer to the funds for these employees amount to 72,480 rubles per month (240,000 rubles × 30.2%). The total cost of payroll for the personnel selection department is 312,480 rubles per month, which is 3,749,760 rubles per year (312,480 rubles × 12 months). The plan that is set for each recruiter is to fill at least 8 vacancies per month for various categories of employees with an average salary of 50,000 rubles. Total 32 vacancies per month. If a company cooperated with a recruitment agency, it would pay it 20% of the employee’s salary and 18% VAT. Thus, the payment amount for filling only one vacancy would be 11,800 rubles (50,000 × 20% + 18%). To fill 32 vacancies per month, it would cost 377,600 rubles (11,800 rubles × 32 vacancies). For a year it would be 4,531,200 rubles (377,600 rubles × 12 months). It turns out that the costs of recruiting personnel using recruitment agencies are higher than paying internal recruiters.

This article is devoted to one of the most pressing topics - cost optimization when forming an HR budget. Employees of the BDO group division, specializing in outsourcing of business processes in the field of accounting, payroll, personnel records and administration, shared practical examples of how the cost optimization system was built in their company.

Maximum return with minimum investment

When we talk about company budgets today, the hottest topic is savings, or, as it is often called, cost optimization. In fact, saving and optimizing costs are not exactly the same thing, both in essence and in content. But there is a common goal in these concepts - maximum results with minimum costs.
Let’s admit it to ourselves frankly: it doesn’t matter whether your budget has been cut to the minimum, whether the only pressing question is “How to do everything planned within the department, reducing all costs exclusively to paying the wages of your employees,” or whether your company is quite optimistic about the future. In any case, your main task is to achieve impressive results with an approved budget that is not encroached upon by the realities of a stormy economy. When it comes to costs, our main goal is to get the maximum return for the minimum investment. Therefore, let me continue this topic with a story about how in various projects traditionally carried out by personnel services, our company was able to achieve positive results while reducing costs.

Ask the provider company: what is included in the service package, in addition to the software product?

Firstly - training. For our employees, this is one of the key factors in the further development of the company. We do not just offer clients to take on issues related to accounting and tax accounting, payroll or personnel records. We undertake to prevent (if not solve) the numerous problems that companies encounter when confronted with regulatory government agencies. Our specialists must be aware of all the nuances and changes in countless laws, regulations, orders, norms and opinions of competent sources, who have the power to pronounce a verdict on the quality of our work for clients.

To do this, we, first of all, maintain the status of certified employees working as professionals of the highest category through licensed training centers. Reducing the cost of paying for their services is not easy: they did not experience a shortage of requests for their programs even during the crisis. It’s not easy, but, as practice shows, it’s quite possible. For example, having analyzed the market for services for advanced training programs for professional accountants, we came to the conclusion that corporate universities of large companies and corporations that are entering the external training market for the first time are good alternatives to traditional training centers. Given the proper quality of teaching and connections with highly qualified specialists who have already won a name for themselves in the training and consulting market, they are ready to take a much more flexible approach to payment issues than “venerable” centers that have not yet felt the notorious spirit of the economic crisis. Some of the corporate universities also do not mind if their educational materials are used by clients for further “internal use”.

An excellent help for us in terms of maintaining the professional knowledge base of our employees is cooperation with a company that supplies us with computer legal reference systems. If you purchased such a system, ask your provider what is included in the service package, in addition to the software product. It is quite possible that you have access to not only regular consultations on additional program features, but also thematic seminars and trainings in which your employees could take part as listeners without additional payment.

When an employee pays for training himself, he is much more responsible

Often free seminars, open tables and trainings are held within closed professional communities. Ask your employees whether they are registered members of such “closed clubs” and what opportunities they have to participate in events that are interesting from the point of view of sharing professional experience. Which of their colleagues can, in turn, be recommended to such a community.
Oddly enough, the transition from foreign language teaching, which was compensated to employees, to training that uses the company’s resource base, but the teacher’s services are paid for by the employees, has also worked well in practice. Compared to the option where the employee does not bear any costs, the formal results of paid training are much better. Obviously, when an employee pays for training out of his own pocket, he treats the issues of practicing educational material and obtaining real useful skills much more responsibly: he finds time to complete assignments, learn words, and does not hesitate to ask the teacher again and again to explain the material that raises questions. On the other hand, if you can provide quality classrooms and give your employees 2-3 hours of work time per week to attend these on-the-job classes, many of them will prefer this option to attending courses on their own at a training center located on the other side of town , on weekends or after work.

Take advantage of internal cross-departmental training resources

And finally, the most important thing - if your company still does not use internal resources for training and knowledge exchange between employees, be it the “mentor-student” system, professional communities or regular cross-sectional “master classes” for junior colleagues and associates , now is the time to start. For an internal training program to be successful, you first need to identify the most in-demand skills and knowledge that one or a group of your colleagues already possess, and find those who are most interested in acquiring them. Next, find out what these two groups lack in order to reach an agreement. Perhaps you need to take on the organizational side or convince management of the promise and potential usefulness of the initiative in order to get the go-ahead for the additional workload of future internal trainers. Or, due to the specifics of your company, it will be easier to organize an initiative from below and involve informal leaders with the potential of mentors, in order to then give official status to the already established practice of transferring knowledge and skills.

Algorithm for drawing up a draft budget

To develop a budget for personnel costs you need to:

1. analyze the situation;

2. draw up a plan for working with personnel;

3. choose planning options and methods;

4. determine personnel cost items;

5. develop forms for collecting and processing information on planned personnel costs;

6. collect and process information from department heads;

7. develop a general draft budget;

8. After this, the budget must be protected and approved by management.

1. Situation analysis

Start developing a budget for personnel costs by assessing the situation in the organization, as well as by analyzing the implementation of the budget over the past period. When analyzing, first of all, identify deviations from the plan and budget for the previous year. Examine the reasons for unplanned expenses, for example, those associated with overtime, changes in personnel numbers, and wages.

Also examine unused resources: open vacancies that have not been filled for more than those months, payments that are not used in practice, unimplemented activities.

Assess the effectiveness of the organization's current HR policy. To do this, evaluate:

• ​staff turnover;
  
• ​employee satisfaction with work;
  
• ​loss of working time (illness, absenteeism, tardiness, downtime, etc.);
  
• ​the effectiveness of the current motivation system;
  
• ​qualitative composition of personnel, their compliance with the goals of the organization;
  
• Features of corporate culture.
  

All this will allow us to develop a more competent HR plan for the next year. Please take into account the possibility of errors. To do this, study the most common mistakes when budgeting personnel costs. For these errors and how to resolve them, see this material below.

2. HR planning

Start developing a personnel budget by analyzing the situation in the organization. The fact is that the basis of the personnel budget is the personnel plan for the coming year. This plan is consistent with the organization's strategic goals. In this regard, first of all, check with the organization’s management about plans for the coming year, both for the organization as a whole and for individual divisions and branches. After this, make a detailed list of activities for each area of ​​​​work with personnel: hiring, adaptation, training, assessment, dismissal, etc. and determine the amount of costs.

For example, next year an organization plans to exit one market segment. In this regard, staff reduction is expected, and accordingly there will be expenses for the payment of severance pay and compensation. If, on the contrary, the management plans to open a branch, then new employees will be required, therefore, the costs of selection, training and remuneration will increase. These expenses “follow” from the strategic goals of the organization. In the first and second cases, the amounts of expected costs must be fixed in the budget for the next year.

If, by the time the budget is formed, the organization’s plans have not yet been determined or they are not specific enough, develop an investment budget. Take into account separately all expenses that can already be accurately determined, and separately - everything related to the planned activity.

3. Planning options and methods

After an analysis of the situation has been made and a personnel work plan has been drawn up, select, taking into account the specifics of the activity and structure of the organization, a method and option for planning expenses, as well as the budget structure.

4. Budget items

By area of ​​activity, budget items can be classified as follows:

• ​wages fund (WF). This is the largest expense item, which includes wages and various types of bonuses. Here, in a separate sub-article, they show the taxes and insurance premiums that an enterprise with a payroll pays;
• social programs, benefits, compensation. This section reflects expenses for medical insurance, food, sports, financial assistance in various situations, transportation of employees to work, rental housing, etc. Separately, they plan expenses for labor protection: the purchase of protective equipment, special clothing, milk and other additional food for employees in hazardous production. It may also include additional compensation payments for such employees. Additional payments can also be included in the wage fund, highlighted as a separate line. This item of expenditure is planned based on the amount of payments for hazards and the number of employees in such positions;
• expenses not included in an organization's labor costs. These include: income of employees from shares and from participation in the organization’s property (dividends, interest, etc.), remuneration to members of the board of directors of a joint-stock company, founders, exempt trade union employees who are not on the payroll of the organization’s employees, etc.;
• personnel selection. Expenses for cooperation with recruitment and headhunting agencies, posting vacancies in print media and on specialized job search sites, participation in job fairs, cooperation with universities, etc.;
• education and development. Costs for organizing an internal training center, interaction with training companies and individual business trainers, coaching, foreign language and computer training, employee participation in trainings and seminars, and organizing internal training. As a sub-item, this part of the budget includes expenses for subscriptions (periodicals), purchase of business and professional literature;
• personel assessment. Costs for cooperation with external providers offering the services of assessment experts, for the purchase of special software for assessing employees, for example, using the 360 ​​degree method, for the purchase of special equipment, for example, a lie detector, for creating your own assessment center, etc.;
• development of corporate culture, corporate events. Expenses for organizing and conducting cultural events and PR companies, for example, corporate events: expenses for renting premises, food and drinks, performances by artists, payments to specialized agencies, etc.;
• conducting personnel records. Costs for purchasing work books and inserts for them, processing documents for foreign citizens, consumables (cartridges, paper, etc.);
• ensuring the activities of the personnel service. Expenses for subscription to specialized magazines, purchase of books, special software;
• present. Expenses for gifts for the New Year, International Women's Day, Defender of the Fatherland Day, employee birthdays, organization birthdays, etc.
• travel expenses. Expenses for business trips of personnel service employees to geographically remote departments, or to clients, partners, dealers in other cities (regions). These expenses may constitute a separate budget item for personnel costs or an item in the budget for the functioning of each specific department.

Also, nowadays, in conditions of fierce competition between organizations in the labor market, new areas of work with personnel are emerging, requiring the allocation of separate budget items. Among these areas are:

Research in Human Resource Management;
- work to increase the loyalty, commitment and trust of employees in relation to the organization (internal PR);
- creating an attractive employer image in the labor market (HR branding), etc.

Budget items in these areas can be either highlighted separately or included in more general items. For example, the cost of research in the field of human resource management can be included in the budget item for personnel training, the cost of work to increase loyalty can be included in the cost item for the development of corporate culture and cultural and social services.

5. Planning forms

Once the budget structure and personnel expense items have been determined, develop summary table forms that will allow you to collect the necessary information from all departments for each expense item. Depending on the planning option, this information is provided by:

• ​HR service employees responsible for various areas of work with personnel (after collecting data from department heads);
• heads of departments and branches;
• Responsible for working with personnel in departments.

In any case, all amounts for each department must be agreed with the heads of departments and verified by the person responsible for drawing up the budget. You can develop the forms of pivot tables yourself and take into account the budgeting features of the organization and individual departments, or use universal ones, for example:

• ​budget for recruitment costs;
  
• ​budget for expenses for dismissals and relocations of employees;
  
• ​expenditure budget for employee training and development;
  
• ​budget for social programs;
  
• ​expenditure budget for corporate events.

6. Collection of information

After planning forms have been developed, distribute them to department heads or other persons responsible for working with personnel. As a rule, it takes from 7 to 10 days to collect information by department. Make an analysis of the amounts received, compare them with previous periods, with the development plans of the unit and the organization as a whole. Discuss their development plans with department heads and ask them to justify the costs.

7. Budgeting

After collecting and processing the information received from all departments on all budget items, consolidate all amounts into a single document. Draw up a budget in any form. A budget is a document that, as a rule, always consists of several pages. Therefore, to make it easier to defend it before management, it is recommended: on the first page, display condensed information from the names of items and the total amounts of expenses for them; then, on other pages, decipher each of the articles with explanations that members of the budget committee can refer to if necessary.

8. Budget verification and protection

After the draft budget for personnel costs has been developed, it needs to be checked. Next, the budget must be signed by the head of the personnel service and agreed upon with the person responsible for budgeting the organization’s funds. As a rule, this role is played by the head of the financial and economic service. After receiving a financier visa, approve the budget from the head of the organization or another authorized person: financial director, deputy head, etc. The procedure for protecting the budget for the purpose of coordination and approval has its own characteristics. This scheme for coordinating and approving the budget for personnel costs is the same for all options for developing a budget. The only difference can be observed only in the volume of information processed and the number of employees who are included in the process. In large organizations, these tasks can be solved by entire divisions and directorates.

An example of creating a budget for personnel costs

In the trading organization "Alpha", the person responsible for drawing up the budget for personnel costs is the HR Director E.V. Prigozheva.

Prigozheva determined employee costs while planning the organization's work for the upcoming financial year. At the first stage, she held a meeting with the head of the organization and the head of the sales department. Together they formed an annual sales plan with detailed development for individual business areas.

Next, the HR director, together with the heads of all departments, determined exactly what labor resources and in what quantities would be required to implement the organization’s plans. As a result, the following personnel cost items were identified:

• ​remuneration of working employees;
  
• ​recruitment of new employees;
  
• ​development and implementation of individual training programs;
  
• ​providing employees with the necessary technology and equipment;
  
• ​bonuses based on performance.
  

At the next stage Prigozheva E.V. Together with a personnel selection specialist, a specialist in the financial and economic department and heads of departments, she determined the amount of costs for each item and drew up quarterly plans for each department.

As a result, this group jointly prepared two documents:

• ​personnel cost budget broken down by quarter and individual business areas;
  
• ​consolidated corporate budget, in which personnel costs are shown in general terms.
  

When planning personnel costs, the HR director sought to provide some budget flexibility, since the market situation may change during the year, and this is difficult to predict. To do this, in agreement with the management of the organization, she laid down reserves for increasing employee salaries. The budget also included additional reserve amounts for the development of measures to attract the best specialists from the market and retain valuable employees of the organization.

Simplify planning

To make it easier to draw up and evaluate the adequacy of the personnel budget, formalize your personnel policy. For example, if an organization indexes wages taking into account inflation, then record this in a regulatory document of the organization, for example, in the Regulations on Remuneration or a collective agreement. Specify the frequency and amount of indexation: for example, twice a year, salaries are increased by 10% or by the amount of inflation for the period preceding indexation.

You can also fix in an internal document the amount of training costs, for example, three percent of the wage fund. In a similar way, you can determine the size of budget items for the formation of a social package, for gifts to employees, etc.

If the personnel service actively works with recruitment agencies, then it is necessary to establish rules for interaction with them. First of all, determine which employees and for which positions will be sought through agencies. Thus, third-party companies can be entrusted with searching for candidates for the so-called. service positions serving the business of a given organization and not included in the main business process, for example, lawyers, financiers, accountants; or seeking candidates only for positions of senior management or middle management in certain departments.

Such formalization will significantly simplify budget analysis, reduce the risk of errors when planning recruitment costs and, most importantly, save the time of the employee responsible for developing and monitoring the budget.

Also, to make budgeting easier, do an analysis of previous years' personnel costs. Write down all previously existing cost items and, based on the personnel work plan for the next year, add new ones to this list.

At the same time, remember, in order to protect the budget of the personnel service before the management of the organization, it is necessary to justify only two aspects:

• ​importance of expense items;
  
• ​feasibility of the proposed amount of costs.
  

In this regard, initially evaluate each expense item according to these two criteria and develop arguments for each item for future protection of the amounts.