5 tips for HR planning on a tight budget (2023)

Cost constraints are nothing new in the world of HR and People leaders. We’re continually challenged to do more with less, eagle-eyeing line items in our team budgets and finding tools to build cost-saving efficiencies. But when the world follows suit and dollars are pinched in every which way, pushing forward people goals can quickly fall to the wayside.

In my 15-plus years as a global people leader, I’ve found that there are a few key consistent points to keep your people strategy marching in the right direction, no matter how tight your budget. Let’s jump in.

Accept agile, because it’s the only way forward

I’m a big believer in agile thinking. Agile’s history is firmly seated in the world of tech, but wider business areas are using the principles in their day-to-day work to plan and prioritize. Agile is dependent on three things: Feedback loops, a prioritization framework and a “customer collaboration” mindset.

(Video) How Do I Make A Budget And Stick To It?

5 tips for HR planning on a tight budget (1)

  • Agile encourages iterative deliverables with continuous feedback loops – which enables you to stay on track with what your customer (in this case, your business and employees) needs are, even as they change.
  • Agile principles also provide a good framework for prioritization, with a mix of setting long-term ambitious goals delivered through shorter-timed planning periods. For example, you could have a 1 or 3-year strategic ambition, but work toward delivering on it in quarterly time boxes to enable the team to gather feedback and adjust the plan regularly – and, where needed, pivot the approach.
  • At its heart, the Agile Manifesto subscribes to “customer collaboration.” Remember that in our world of HR, our customers are our employees and our business, and as such, we should connect everything we do to their needs.

Our research shows that only 28% of U.S.-based HR leaders believe their strategy allows them to adapt quickly, and for that I say:

In times of economic turbulence, you’ve got to be OK with adopting an agile mindset, where you can pivot and be nimble.

Yes, you always want to work towards your company’s north star and future vision, but how you get to that endpoint needs to be agile enough to respond to the market changes, especially in how they affect your business and industry.

Keep your business goals top of mind

5 tips for HR planning on a tight budget (2)

There always has to be a connection to how investments directly impact the bottom line of the business.

(Video) Create an Annual Budget in 5 Minutes (Solution)

When we experience economic turmoil or major budgetary constraints, we need to have initiatives, deliverables and programs that we can clearly demonstrate are contributing to the overall success of the business.

For me, this ties into looking at the metrics around some basic people data regarding labor turnover. If you’ve got high labor turnover, what does that cost you every time you lose somebody great from your business? Not only when you lose someone, but also think about the cost of onboarding, too.

By putting in place the right kind of people initiatives and programs, you’re stopping the business from hemorrhaging money in elevated recruitment and retention costs, which moves your project from a nice-to-have to a must-have.

Think creatively to find low-cost solutions

If you haven’t got a great deal of budget, it’s looking inward at what skills and knowledge you have got across the business that you can leverage. When we’re looking specifically at financial wellbeing, we need to remember the resources we have at our fingertips, as well as others within reach.

If you’ve got the budget, you can bring in an external provider to do sessions on investments or money management. But if you haven’t got the budget, you have a finance team with knowledge and expertise in your own company who could impart that knowledge to other people in the organization.

Not only is that a cost-effective way of doing things, but it also helps build a culture of learning in your organization, while encouraging people to work outside of their siloed areas.

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The other thing you can consider is what partners you have standing relationships with that might provide a certain service for you. They may be willing to dedicate an hour or two to an employee-dedicated wellness webinar, for example, to show employees what’s available to them.

Our recent research shows a variety of ways employees are looking for their employers to help them outside of pay, specifically around cost of living increases:

5 tips for HR planning on a tight budget (3)

Internally, one thing you can do that is absolutely free is promote, promote and promote some more! What benefits do you have on offer that your employees need to hear about? Whether that’s a discounts program to help them stretch their take-home pay (like we offer), or by centralizing resources and lesser-used benefits in one place so employees can find them, now is the time to double down on packaging and promoting how you can best support your people.

Equip your managers to lead the way

Your managers should be seen as the lifeline for your business during disruption. They are the ones that get the messages out to frontline employees and can be your make-or-break moment in keeping your top talent. Just like you should be promoting benefits and resources to all employees, ensure your managers are signposted to all the support that’s available to them as well. For example:

5 tips for HR planning on a tight budget (4)How can managers foster employee resilience at your organization?

Lead manager development or provide relevant materials on how to support employees, whether leaning in on education around how to create a supportive work environment, or how managers can create a psychologically safe environment at work for employees to open up.

(Video) Chapter 5 HR Planning

Do your managers know how to spot signs of burnout in themselves, or in others?

Focusing in on mental health resources, time management and productivity hacks, giving managers autonomy to grant time off or supporting them to model flexible working styles can make a huge difference in an employees’ day-to-day stressors.

Are you keeping your managers in the know?

Without open, honest and transparent communications from the top-down, fear leads to office rumors and job insecurity. Keep your managers in the loop on important company updates and how it will affect their team so they can instill confidence in their leadership style.

Don’t forget about R&R and the power of a free “thank you”

Not everything needs to have a number attached to it, though. Make a point to emphasize the non-financial elements of recognition, with a colleague or your leaders saying “thank you for your hard work,” to recognize and show employees that they’re valued goes a long way.

Not only does it make the person that’s received the sentiment feel good, but it’s also about the person giving it.

Building a culture of healthy, consistent employee recognition shows you care about your employees, and that connects back to retention and recruitment goals. It’s not trivial – it’s an incredibly valuable program that can make a huge difference.

If there’s a small monetary element to it, whether it’s $10 or $15 for example, this can make a big difference to individuals or even their families. It could be a lovely treat for themselves or for them to share with a relative or a child. It could just make the difference for them that particular week when it’s an especially trying time.

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These principles and tactics can apply whether you're an organization of 50 people, or 150,000. What changes the most is how you deliver on them, and what resources you have to execute. But the principles of mapping our strategy and focus, even in difficult financial times, remain consistent.


What are the 5 steps in human resource planning? ›

Five Planning Steps Every Organization Should Use
  • Analysis of Organizational Plans and Objectives. ...
  • Preparing a Human Resources Inventory. ...
  • Assessing Future Supply and Demand. ...
  • Matching Supply and Demand. ...
  • Establishing an Action Plan.
Jul 29, 2020

What is the most important thing to consider to plan for the HR budget? ›

Compensation and Benefits - This is almost universally the greatest cost to any business, and will likely be the top priority when planning your HR budget. This category includes such considerations as: Employee salaries.

What is HR strategy budget? ›

The human resources budget refers to the funds that HR allocates to all HR processes enterprise-wide. The HR budget will include funds allocated to hiring, salaries, benefits, talent management, training, succession planning, workforce engagement, and employee wellness planning.

What are the 5 pillars of human resource management? ›

Human Resources manages 5 main duties: talent management, compensation and employee benefits, training and development, compliance, and workplace safety.

What are the key steps in HR planning? ›

There are four key steps to the HRP process. They include analyzing present labor supply, forecasting labor demand, balancing projected labor demand with supply, and supporting organizational goals. HRP is an important investment for any business as it allows companies to remain both productive and profitable.

What are the 5 steps of budgeting? ›

Creating a budget
  • Step 1: Calculate your net income. The foundation of an effective budget is your net income. ...
  • Step 2: Track your spending. ...
  • Step 3: Set realistic goals. ...
  • Step 4: Make a plan. ...
  • Step 5: Adjust your spending to stay on budget. ...
  • Step 6: Review your budget regularly.

What are 3 budget planning tips? ›

Here are some important points to keep in mind as you build your budget and identify what goes into your income and expenses.
  • Overestimate your expenses. ...
  • Underestimate your income. ...
  • Involve your family in the budget planning process. ...
  • Prepare for the unexpected by setting saving goals to build your emergency fund.

What are the 3 most important parts of budgeting? ›

Any successful budget must connect three major elements – people, data and process. A breakdown in any of these areas can have a major impact on your results.

What are the three important elements in a budget? ›

The three main elements, or parts, of a personal budget are income, expenditures, and savings. Each of the three elements plays a part in ensuring that a household operates and uses their income responsibly. Income is the money that comes from a job.

What are the 4 HR strategies? ›

Compensation planning, recruitment, succession planning, and employee development are examples of strategic HR functions.

What are the 4 pillars of HR strategy? ›

Other HR strategy pillars include organization design, employee relations, service delivery, legal requirements, etc. To develop and sustain an effective HR strategy, be professional and and keep pace with HR trends trends in the marketplace to attract, engage and retain the best possible talent for the company.

What are the 4 types of HR strategy? ›

What are strategic HR functions? Examples of strategic HR functions include compensation planning, recruitment, succession planning and employee development.

What makes a successful HR strategy? ›

The key to a successful HR strategy is to identify what unifies and motivates employees and to develop a strategic plan around that understanding. Think about conducting a regular survey where you ask what motivates employees and ask them to rank a series of options in order of importance to them.

What are the six key elements of strategic human resource management? ›

Any basic strategy involves an HR framework of the following pattern: recruitment, selection, onboarding, training, work environment, performance, development and reward.

What are the four core HR areas? ›

The four (4) core HRM Systems consists of: (1) recruitment, selection, and placement; (2) learning and development; (3) performance management; and, (4) rewards and recognition.

What are the 3 core elements of a HR plan? ›

The three key elements of the HR planning process are forecasting labour demand, analysing present labour supply, and balancing projected labour demand and supply.

What are the 6 steps in HR planning? ›

Here are six steps you can use in your HR planning process:
  • Make HR objectives. ...
  • Analyze the current workforce. ...
  • Determine HR supply and demand. ...
  • Create an action plan. ...
  • Continue to train and develop. ...
  • Evaluate the plan.
Mar 10, 2023

What are the six stage of HR planning? ›

There are six distinct stages at play: attraction, recruitment, onboarding, development, retention and separation.

What are the 4 C's of budgeting? ›

Four Cs—continuity, correctness, conservatism and crowding-in—are the hallmarks of the Union budget for 2022-23 presented by India's finance minister on 1 February.

What is high five budget method? ›

The high-five method recommends maintaining two checking accounts. One account covers your routine payments, including bills and grocery spending, while the second account holds your spending budget for eating out, entertainment and other wants.

What are the 4 important parts of budget? ›

The primary components of a budget are sales revenue, fixed costs, variable costs and profit.

What are 4 steps in preparing a budget? ›

The following steps can help you create a budget.
  1. Calculate your earnings.
  2. Pay your bills on time and track your expenses.
  3. Set financial goals.
  4. Review your progress.

What is the best budget strategy? ›

Try the 50/30/20 rule as a simple budgeting framework. Allow up to 50% of your income for needs. Leave 30% of your income for wants. Commit 20% of your income to savings and debt repayment.

What is the #1 rule of budgeting? ›

Key Takeaways. The rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must-have or must-do. The remaining half should be split up between 20% savings and debt repayment and 30% to everything else that you might want.

What are the three 3 common budgeting mistakes to avoid? ›

Listed below are 10 common budget mistakes to avoid and easy ways to fix them.
  • Not writing your budget down. ...
  • Not tracking your spending. ...
  • Setting unrealistic budgeting goals. ...
  • Forgetting to track one-time expenses. ...
  • Not planning for emergency expenses. ...
  • Forgetting to plan for fun expenses.
Dec 15, 2022

What are the five 5 factors affecting a budget preparation? ›

5 Things to Consider When Preparing the Annual Budget for Your...
  • Start Budgeting Early. ...
  • Involve All Departments. ...
  • Accurately Define Expenses. ...
  • Accurately Define Expenses. ...
  • Know Your Cash Flow.

What are 2 key benefits of budgeting? ›

Benefits of budgeting include providing "guardrails" (i.e., designated limits) for spending, achieving financial goals (if savings is included as a fixed "expense"), and for peace of mind.

What is the six step HRP process? ›

Here are six steps you can use in your HR planning process:
  • Make HR objectives. ...
  • Analyze the current workforce. ...
  • Determine HR supply and demand. ...
  • Create an action plan. ...
  • Continue to train and develop. ...
  • Evaluate the plan.
Mar 10, 2023

What are the 4 R's of human resource planning? ›

So for any middle management recruitment, HR should devise and inculcate the 4 principles of “R” namely Recruitment, Rehabilitation, Re-training and Retention.

What are the 6 stages of human resource management? ›

The employee life cycle model (ELC) is an organizational method used to visualize how an employee engages with the company they are a part of. There are six stages involved in this model: Attraction, Recruitment, Onboarding, Development, Retention, and Separation.

What are the 9 steps in human resource planning? ›

Steps in Human Resource Planning (explained with diagram)
  • Analysing Organizational Objectives: ...
  • Inventory of Present Human Resources: ...
  • Forecasting Demand and Supply of Human Resource: ...
  • Estimating Manpower Gaps: ...
  • Formulating the Human Resource Action Plan: ...
  • Monitoring, Control and Feedback:

What are the 3 steps in the human resource planning model? ›

What are the steps in the human resource planning process?
  • Step 1: Assess your current human resource capacity. Start by looking at your current human resources state of play. ...
  • Step 2: Forecast future HR requirements. ...
  • Step 3: Identify HR gaps. ...
  • Step 4: Integrate the plan with your organization's overall strategy.
Aug 19, 2021

What are the 7 stages of HR cycle? ›

The employee lifecycle model is used to identify the various stages an employee goes through during their engagement with your company. The 7 stages include attraction, recruitment, onboarding, development, retention, exit, and advocacy.

What are the 4 C's of human resource management? ›

The 4 C's refer to the HR leader and department being a Catalyst, Coach, Conductor, and Consultant within their organization.

What are the 3 C's in human resource planning give and define? ›

In human resources, the three Cs refer to compensation, career path, and culture. All three are major factors that can help—or hurt—your company's ability to retain employees.

What are the two important components of human resource planning? ›

Scheduling and communication are key components of an effective human resource planning process.

What is the 7 basic human resource management? ›

What are the basics of Human Resource Management? Recruitment & selection, performance management, learning & development, succession planning, compensation and benefits, Human Resources Information Systems, and HR data and analytics are considered cornerstones of effective HRM.

What are the 3 elements of HR? ›

The three major roles in human resources are; administrative, change management, and people management. Administrative tasks include hiring and monitoring of employees, managing payroll and benefits, and development of policies and guidelines.

What are the 7 task of human resource management? ›

What Does an HR Manager Do? 7 Functions of the Human Resources Department
  • Recruitment and Hiring.
  • Training and Development.
  • Employer-Employee Relations.
  • Maintain Company Culture.
  • Manage Employee Benefits.
  • Create a Safe Work Environment.
  • Handle Disciplinary Actions.


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