Combating a 360 Degree Approach Within Limited HR Budgets

Today, cost optimisation within organisations has become a very critical concern for many HR leaders. The times are such that new challenges have been addressed within the existing kitty of the HR fraternity. And, the root cause of the issue is the limited HR budgets which now have be managed for additional employee needs too.

Undoubtedly, the onset of COVID fever has transformed the physical workplace scenario into the digital era, but on the other hand it has also diminished the inflow of money in many ways.

Budgets Are Never At Adequate Levels

Hybrid work models are indeed interesting as they seem to be offering the best of both worlds as well the ambiguity which exists in both. The health and safety of employees and value chain partners has enabled the evolution of work from home and hybrid models. Moving with the flow, Prabir Jha, Founder & CEO at Prabir Jha People Advisory states that, “Budgets are never adequate enough. Even in the best of times, funds are never enough. My own experience is if CHROs can build out a strategic case, funds can be better always. But it needs conviction and the ability to influence.”

Having said that, in a world of such discontinuous change, the ability to do a good Pareto of mission-critical agenda items will be key.  Not everything is equally critical. And not everything critical necessarily needs a lot of money. “My experience has been to always put your money where the mouth is. What really is most likely to derail business? Or what is most likely to multiply business possibilities? HR expenses must necessarily pivot themselves around these first principles rather than the noise that many HR teams lose themselves in.”

Allocation of budget and availability of resources to drive people agenda are no more matters of concern in progressive and performing organizations. Key issues are impact of utilisation and returns. If the proposed HR programs aid into strategic priorities, operational imperatives or long term capability requirements, resources are allocated as these are critical for success.

Hybrid Structures Have New Parameters

Hybrid workforce structures with proper mix of on roll and off-roll resources bring in flexibility and cost advantage. Developing reliable and capable alliance ecosystem in large scale businesses is an important area that provides competitive advantages. Segregating core areas from auxiliaries and having differentiated approach of resource management helps address budget issue to a large extent. Careful adoption of relevant technology solutions in work systems will continue to create more value with less cost.

“New workplaces are likely to be less enforcing, more flexible in time and attendance but far more sharper in goal and outcome orientation. Teams and managers are likely to go through steep learning curve in effectively managing work from dispersed locations. It will open up new vistas to organizations for access to talent without compulsions of relocation. In long term, this will certainly alter concentration of talent from large city centres to tier 2 & 3 hubs. These are exciting trends to catch in times to come. It will also have implications on net cost of employment,” asserts Dr. Jayant Kumar, Jt President - HR at Adani Group.

He further elucidates that organisational design of future is likely to be more flexible beyond rigid lines and boxes. Organizing teams around tasks and assignments with frequent changes will be smarter things to do. Inculcating a mindset, of anticipating and preparing for changes around, in workforce is an important agenda for leadership and HR community in times ahead.

What’s Ahead

However, expectations from HR teams have changed and leadership requires ingenious, progressive and innovative solutions against needs. There are immense opportunities in several areas of people management to bring in contemporary solutions which will work equally well for employees and the organisation. 

“Organisations should now focus on building future skills and capabilities. Its slated that tectonic shift in the skill mix and companies would do well to anticipate their future skill needs and invest in building them. Make choices may both be expensive and inadequate. Companies should spend both effort and money on building agility in their eco-system. This will need investment both in technology and process flow re-engineering,” advises Jha.

Many jobs can be flattened. A lot of the middle management is flab. So spending some money on redesigning the companies to get leaner and agile is both a requirement. But it will eventually pay for its self. Finally, instead of the huge pressure only of financial rewards, Experts suggest that some investment in designing better recognition for smarter strategic alignment of people to the future aspirations. A lot of money is today wasted in doing things that don’t really add up. A dramatic review will help.

 Gartner senior executive advisor Matthias Graf believes that, “successful HR leaders focus on cost optimization as an ongoing discipline, not as a one-off exercise. Cost optimization strategies should look beyond cost-cutting and proactively promote options for immediate efficiency gains while not compromising on long-term impact on business performance.”