It’s that time of year … you’re up to your ears in open enrollment, as well as planning your major business initiatives for the 12 months ahead. With this comes the inevitable “B word” – your HR budget. From rising costs of healthcare to basic administrative costs, companies face a significant budget challenge each year to attract and retain top talent.
As an HR leader, you need to fully understand the numbers behind your role. The stronger your grasp on the cost of being an employer, the better decisions you can make for your company. Strategically outsourcing some functions – including assistance with planning and budgeting – to a professional employer organization (PEO) can greatly ease the burden.
A Planning and Budgeting Partner
Your PEO can assist as you accurately forecast your 2019 strategy for:
Wages and salaries:
This begins with looking at your company’s overall business plan, and then using your current employee roster to review historic data. You also need existing market data in order to project numbers for the upcoming year. Work with your PEO to estimate base compensation figures, bonuses, commissions, and both across-the-board and performance-based pay raises.
Take into account your company’s strategy for contributing to employee benefits in 2019. How much of your employees’ health insurance premiums will you contribute? Do you want anything to change based on recent business performance? And overall, what will your upcoming premium costs look like? It’s advisable to budget for anticipated increases, so gather as much market data as possible. Your PEO can help you devise a conservative approach to tackle unpredictable premium costs. You need to go through the same process for any other insurances you offer, such as dental and vision plans. Plus, you need to budget for 401(k) contributions and the other items on your benefits menu.
Training and development:
Calculate the cost of joining webinars, tuition assistance, educational seminars and conferences, and licensures and certifications. Again, use existing data and market updates as guidance.
Paid time off:
Even though vacation and other paid time off accruals are usually line items in a company’s accounting budget, HR plays a major role budgeting for them. Those accruals that go unused are a significant cost liability, so your team should be involved in reviewing these balances.
Partner with Lyons HR!
As an ESAC-accredited PEO, Lyons HR can help you nail your budget forecasting plans for 2019 and beyond. We offer unparalleled market intelligence and access to the data points you need to nail the process. And we can help with the day-to-day legwork while you focus on running your business. Contact us today so we can tell you more.