Developing the human resources portion of your organization's budget is often part of your job responsibilities as an HR executive. A complete budget will enable you to meet the human resources related computer, travel, recruiting, salary, membership and benefit requirements of your organization. As you prepare your department's budget, include both current and projected needs to present a fiscally sound, realistic plan to your accounting department.
Compensation and Benefits
Compensation and benefits generally comprise the majority of an HR budget, as many organizations run employee payroll through the human resources allocation budget. When working on the compensation and benefit portion of the budget, include employee salaries, unemployment and associated federal and state taxes. Also include the employer portion of health insurance. Depending on your organization’s insurance package, you may need to include life, vision, health and disability insurance. If your company has a retirement plan, also include those costs in the compensation and benefit portion of your budget.
Human Resource Information Systems
The human resources information system is a vital part of most HR departments. HRIS is either a specifically installed software or online system you use to input a wide variety of information on your employees, such as employee data, applicant tracking and payroll. The cost of your HRIS system will vary based on the features your system offers and how your accounting department allocates your computer access. Work with the accounting or information technology departments to determine your HRIS cost.
Training and Development
Training and development costs are an important part of your human resources budget. You may be responsible for training and development on an organization-wide basis or only responsible for training and development of your human resources staff. In either case, an article by the Society for Human Resource Management entitled, "What Should Be Included in a Training Budget?" recommends including the cost of digital and printed training materials, speaker honorariums or fees, online training access and rental of off-site conference rooms, if needed. Meet with upper management to determine what training modules they would like presented throughout the year to develop your budget. For your own staff, include the cost of membership to human resources organizations, conference fees and travel.
Human Resources Services
The human resources services portion of your budget encompasses the peripheral services your department provides to support the organization. Include employment agency fees if you occasionally use temporary workers during busy times. Allocate money for executive search firms, if appropriate. Other costs can include the cost of pre-employment or periodic drug testing for employees, credit check fees, employee assistance programs or background testing. If your organization uses newspapers, magazines or online sources to advertise open positions, include advertising costs in your budget.
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