Let the Budgeting Begin: 2021 Will Be Here Before You Know It!

We all know 2020 has been anything but ordinary, so how best to plan for 2021?

The pandemic and its impact on our nation’s health, both physically and financially (not to mention mentally!), has the US in its first recession in more than 10 years.  As a result, amidst the uncertainty of the current climate, budgets may continue to hold steady at best or shrink at worst.

So what does this mean for HR?

Dive into the Data

As you prepare your HR budget, be sure funding requests are accompanied by data that shows the impact of such programs on revenue, employee retention, and customer satisfaction.

Speaking of employee retention, one crucial tool in your budget-planning toolkit is our recently released 2021 Pay Projections survey. Click here as this survey provides a regional view of what members are considering pay increases throughout the year.  Need to keep your rock star performers? Note the data supplied on projected increases for top performers.

Streamline Your Processes

Some HR functions like recruiting may be a bit slower than usual, and if so, it is the perfect time to consider workflow efficiencies. Take a hard look at low or no-cost technological advances that can help you do more with less .

Additionally, if you plan on continued remote/hybrid work, consider technology-based engagement tools (e.g., enhanced instant messaging, virtual meeting tools, or video conferencing). These can take the place of expenses historically earmarked for office lunches and events.

 Plan for the Unexpected

Unless you have a crystal ball, we can all but guess what the new year will hold. This time last year, I would hazard to guess that few of us anticipated we would be in the throes of a worldwide pandemic at this moment. However, planning for contingencies can help. Some teams budget as much as 5 – 10 % to cover unknown or unanticipated costs. We did not think we would be searching for hand sanitizer and logoed facemasks throughout 2020, but those who budgeted for the unexpected have had funds to draw on for such expenses.

Upskilling, Reskilling, and Keeping Current

While some will suggest that this is no time for an expense like training – nothing could be farther from the truth! From an HR and compliance perspective, ensure managers and employees are fully trained in safe working protocols and behaviors is critical, now more than ever.

Speaking of compliance, HR and all leaders need to stay abreast of changing regulatory requirements from a safety perspective and from an employment law perspective.

It is also a great time to ensure you have your bases covered by cross-training your employees. If your business is cyclical to being with, you have likely mastered shifting people resources to match production needs. However, using informal training methods such as job shadowing, coaching, and virtual training can be time well spent in upskilling your workforce.

Ensuring you are carving out a sufficient portion of your budget to train your people can act link a chain reaction of rewards that add value vs. cost your bottom line:

Increased employee safety + increased employee satisfaction and retention + increased performance = improved customer experience, which leads to increased revenue.

By putting our learnings from 2020 to work, we can draft a budget covering the bases while also being flexible enough to handle whatever 2021 throws our way.