Most of us have spent time at a company that ran relatively lean, from the number of employees they had to the departmental budgets. For those of us who dream big, it can be frustrating to have to cut back when we know that something will be a worthwhile investment. Even so, just about everyone has faced or will face the challenge of making do with a small budget. Going a step further, we are often expected to make big things happen with nearly no budget. It may seem impossible, but the good news is that sometimes it can be done.
Recruiting and retaining talent is one of the most costly things that an HR department does. Cutting costs here starts with getting the right person in the right position, which keeps you from filling that position again within a short period of time. When it comes to recruiting, there are ways to cut costs without hurting yourself in the long run. For instance, you may want to consider casting a smaller net when posting a job and focusing on only those sources that have proved to be successful. Use your professional and personal networks and skip the costly job postings.
Retaining your workforce is essential to avoiding added talent acquisition costs, so keep that in mind when determining where to make budget cuts. Making the right decisions when budgeting for the categories below will play a major part in retaining top talent.
When it comes to benefits, you should first focus on which benefits make the most impact on employees. This is a very tricky area because taking away or reducing benefits can lead to unsatisfied and frustrated employees. Look at where you can reduce costs without reducing benefits, such as evaluating different health insurance carriers that may offer a better value. Ramping up your wellness program may also reduce your company’s healthcare costs in the long run. Next, speak with your 401(k) plan provider about what adjustments can be made without reducing benefits. They may be able to reduce fees or make related recommendations. Although those are the two most significant benefits, you probably also offer other benefits, which you shouldn’t be afraid to negotiate on, especially if you have an established history with that company.
Professional development can’t fall by the wayside just because your budget has slimmed down. In fact, this is one area that you may actually want to kick into high gear, as it’ll be more important than ever to retain top talent. Rather than spending a lot of money on continuing education, conferences, or professional development workshops during this time, take advantage of free or low-cost resources such as massive open online courses (MOOCs), webinars offered by professional organizations your department or others are part of, internal mentorship and leadership programs, and internally-led courses focused on specific skills.
Don’t let your company’s culture and morale take a nosedive in your efforts to cut costs. Similar to professional development offerings, this is one area that should actually be enhanced during this time. Consider bringing in convenience-based benefits that you arrange and offer but employees pay to use, such as dry cleaning services, a café brought in by a vendor that doesn’t charge for use but only for the items sold, a once-weekly coffee service, car detailing, or even massages. Since many employees already pay for these services, the added convenience will be appreciated. You may also want to consider launching an employee committee that fundraises to provide small, fun events for employees.
Risk management may not be the first thing that comes to mind when you’re attempting to cut costs, but it can make a world of difference. This is one area where positive changes can directly translate into dollars saved. Start with your safety program, which affects your workers’ compensation premiums, and don’t just focus on preventing workplace accidents, but also offer ergonomic evaluations (these can be done in-house with just a little training), provide education on season-specific concerns (walking on ice, working in the heat), and even safety drills. Talk to your provider, as they are likely to offer many free resources. This is just one example of the impact risk management can have.
Since a large portion of a company’s costs comes from the HR department, whether it’s for talent acquisition, professional development, or benefits, any savings that can be generated have the potential of making a significant impact on the company’s bottom line.
What can you add to this list to help reduce HR costs? Let us know in the comments section below.
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