Majority of HR leaders feel compelled to reallocate the HR budget through a zero-based budgeting (ZBB) process to create value for the company!
Nicolas BEHBAHANI
Global People Analytics & HR Data Leader - People & Culture | Strategical People Analytics Design
?? HR leaders are focusing on Reducing, Replacing and Rethinking their HR Budget.
?? A total of 60% of HR leaders anticipate budget reductions or intend to sustain the budget from the previous year while tackling expanding HR duties without augmenting their resources. HR investments focus on driving HR efficiencies as well as retaining and reskilling critical talent.
?? HR technology continues to be the top investment priority, with 48% of HR leaders intending to boost their budget in this domain. It is followed by learning and development (L&D), total rewards, and talent management as key areas of focus.
?? Additionally, many leaders are considering the delegation of more tasks to shared services teams, according to a new interesting research published by Gartner using data ?? from a survey of around 300 HR leaders.
?Reallocation of HR budget
Researchers have observed that the application of a zero-based budgeting process (ZBB) allows HR leaders to reduce, replace and rethink HR budgets areas in low-value-add HR areas, and reallocate the liberated resources to HR areas with high value addition that bolster business expansion.
?? HR leaders must focus on prioritizing HR investments that closely align with strategic business objectives and HR priorities, while reducing investments in HR initiatives that add little value.
?HR leaders should consider reducing, replacing, and rethinking their HR budgets.
Researchers have identified multiple methods to cut costs, substitute, and rethink the HR budget in areas that add little value.
Additionally, there has been an increase in the number of HR leaders intending to adopt these efficiency measures in 2024.
1?? Reduce:
To streamline operations, HR could reduce the number of processes, tools, or services by lowering service levels or deferring projects. If necessary, HR leaders might contemplate severe actions like reducing staff numbers, decreasing salaries, or implementing hiring freezes.
2?? Replace:
Identifying cost-effective or more efficient alternatives to current expenditures is crucial. For instance, HR leaders could renegotiate terms with external vendors or restructure the external vendor portfolio. Additionally, they could shift more transactional tasks to shared services teams and outsource entire processes.
3??Rethink:
Reevaluating spending is a multifaceted task that frequently necessitates comprehensive assessment and occasionally initial investments. This can involve overhauling the HR operational framework, standardizing and centralizing procedures, and deploying technological solutions to automate tasks or facilitate self-service.
?The top HR efficiency measure
In 2024, HR leaders are concentrating their cost-saving initiatives on rethinking and replacing strategies to optimize cost.
This involves a critical assessment of current practices and the implementation of innovative approaches to enhance efficiency and reduce costs without compromising the effectiveness of HR services.
The four most common HR efficiency measures include:
?? Improve processes by extending the use of HR technology
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?? Leverage new emerging HR technology.
?? Transform the HR operating model/ run an HR transformation.
?? Transfer more tasks to shared services.
?The top 4 HR investment
Researchers have identified the top four HR investment areas that reflect organizations' needs to boost growth and efficiency through technology, alongside reskilling and retaining essential talent:
?? HR Technology (48%)
?? Learning and Development (L&D) (33%)
?? Total Rewards (29%)
?? Talent Management (28%)
?? Finally, researchers provided the following three recommendations for HR leaders: Invest in HR technology to expedite HR's digital transformation, support business growth, and enhance HR efficiency. Additionally, ensure that these investments yield returns by:
??Setting realistic goals for the technology implementation
?? Improving employee adoption
?? Adjusting spend based on constant ROI measurement
?? ???? ???????????????? ????????:
This insightful research on the latest trends in HR efficiency reveals that HR leaders prioritize enhancing HR processes to ease the adoption of HR technology and shift more non-value-added tasks to Shared Services.
The strategy of reducing, replacing, and rethinking the HR budget, as proposed by researchers, is a sound approach.
It is evident that transforming the HR operating model is no longer a focal point for HR leaders.
Thank you ?? Gartner researchers team for these insightful findings:
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VP Asia-Pacific @ SmartRecruiters | Helping Talent teams implement AI powered software for superhuman hiring
5 个月Great post Nicolas. Thank you for collating. What we are seeing at SmartRecruiters is HR and Talent Leaders appreciating the education on how you can improve OPEX and CAPEX across their respective teams and IT by partnering with technology solutions that help reduce overheads and improve efficiencies across people, process and technology. The implementation of automation and AI is one thing but the operational costs of configuration, maintaining and upgrading talent technology can be reduced to almost $0 when you partner with the right solutions. We’ve just had a large customer run a digital transformation of the Talent function, selecting SmartRecruiters as their vendor. Through process automation, productised integrations zero’ing out integrations costs and being able to mobilise their Talent team in to new roles (away from administration burdens they were doing before), they’ve seen a $22.6m ROI within a year (x22 ROI) on software and implementation investment.
Head of Talent | HR Strategy | Talent Management | Workforce Transformation | Talent Acquisition & Optimisation
5 个月Nicolas BEHBAHANI To create values and transform the business in the age of AI, HR must first transform ourselves. ZBB is exciting for us to press the reset button to rethink and reimagine our approach to HR and how we create values. While ZBB can offer benefits in enhancing efficiency, HR leaders must carefully consider the potential implications for employees' well-being and take proactive steps to balance the pressures of budget constraints with driving efficiencies, retaining critical talent, and promoting employee development. Prioritizing strategic investments and fostering open communication can help mitigate risks and ensure a sustainable approach to budget management in HR.
Human Capital Management Consultant | Executive Coach | Executive Search | Psychologist ??
5 个月Interesting! HR technology helps HR leaders by streamlining processes, improving efficiency, and supporting business growth. Key benefits include enhanced HR processes, better data management, and the ability to shift non-value-added tasks to shared services. ????
HR Business Partner at Mulberry England
5 个月Thank you for sharing!!
Industry Veteran | Exploring Future of Work | Great Manager’s Coach & Mentor
5 个月?? Excellent mid-year share to re-think the HR budget, Nicolas BEHBAHANI. ?? The researchers' suggestions are spot on. A small add: Adjusting spend based on constant ROI (+Value) measurement is crucial. ??♂? Investment in technology is essential if affordable, but investing in people is always a MUST. ? Different Strokes for Different folks: Method: ABCDE A - Aligning HR budget to Business (+HR) Strategy, each business has its unique needs & wants. B - Buy, Build, Borrow - Resources - principles to be in place. C - Collaborate - HR Budget is not only HR baby - involve line. D - Develop KPI's for measurement & take a informed call on - Start, Stop, Continue. E - Evolve - Everyday. (This is a very different world - Volatility prevails). Keep some budget for rainy days - now-a-days we don't know, which part of the world it will Rain OR Heat-up. (analogy).