How people-first budget planning boosts your bottom line
We're delighted to host a guest blog by Tali Sachs, Content Manager at HiBob. HiBob is the modern HR platform for modern companies that drives culture & engagement.
People are companies' most valuable assets. If we've learned anything from the COVID-19 pandemic and the ensuing Great Resignation and war for talent, it's that companies must prioritize their people–or they'll resign. And without the skilled professionals you need to get the job done, companies can't succeed in today's business climate.
According to HiBob research, 55 percent of professionals working at mid-sized companies said that the main driver behind their decision to quit was their need for better work-life balance.
To thrive in the modern business world, companies must shift their priorities to align with the priorities of the talent they need. This means investing in business strategies that put people-centric tools, policies, and cultures at the top of the company agenda.
Success in the modern business world means prioritizing people-centric cultures and benefits
CFOs must work hand-in-hand with their HR counterparts to determine how strategic investment in talent can lower attrition rates, save on recruitment and onboarding, boost employee satisfaction, and (ultimately) impact the company’s bottom line.
Modern companies have to rethink their approaches to talent attraction and retention. In other words, to win talent over from the Great Resignation, they must spearhead the Great Alignment.
The Great Alignment: Evolving budgets and cultures to sync with the modern professional’s expectations
Today’s companies must navigate a talent-driven market. According to research by HiBob and Fiverr, people today are leaving in search of more flexibility (30 percent), better pay (27 percent), or striking out on their own as freelancers or entrepreneurs (22 percent).
Companies must evolve their budgets to support and align with the modern professional’s priorities to come out on top. And to get it right, finance teams must sync with HR leaders and people managers to build a people-first culture with progressive policies and compensation at its core.
Adding new benefits to your compensation packages may sound expensive, but the costs of attrition, recruitment, and training add up to even more. According to SHRM, “many employers estimate the total cost to hire a new employee can be three to four times the position’s salary … That means if you’re hiring for a job that pays $60,000, you may spend $180,000 or more to fill that role.”
The importance of employee retention has never been clearer–and the ROI of investing in your people has never been higher–but what can companies do to convince top talent to stick with their jobs?
Build people-centric compensation packages into the budget
Let's take a look at four progressive compensation package essentials your company can consider building into your people-centric policies and programs budget to keep your best talent and attract even more.
Offer flexible schedules
Flexibility is the number one reason today’s professionals cite for leaving their jobs. While two-thirds of executives prefer to work on-site, over three-quarters of “non-executive knowledge” professionals “said they want flexibility in whether they work from home or the office, and even more, 93 percent, want flexibility when they work.”
The numbers are convincing, too. According to Gartner, giving your people flexible work hours is a key driver of productivity. Forty-three percent of people working remotely cited it as the top reason their productivity went up. The solution? Allocate part of your budget to home-office set-ups and supplies–and watch productivity rise.
The age-old stigma around taking time off is still common. But, people always need time to refresh and reset, especially if they’re ill, suffer a family emergency, or welcome new family members.
Extending your PTO budget to cover more than the legal standard can go far, especially regarding retention (company loyalty) and saving on recruitment and onboarding costs. Updated PTO benefits can include:
Extending paid parental leave for new parents by a minimum of four weeks
Allowing new parents to work part-time with full pay for up to four weeks after they return to work from leave
Providing up to two months of paid leave to care for ill family members and, when applicable, an additional two weeks of bereavement leave
Providing disability coverage with full pay for up to a year
Health and wellness benefits
According to the WHO, "depression and anxiety disorders cost the global economy $1 trillion each year in lost productivity." But, for every $1 you invest in treatment, you can see a return of $4 in improved health and productivity.
That kind of ROI speaks for itself. It starts with a commitment to providing a healthy workplace that puts people’s mental health and wellbeing first. Improving mental health programs at work can include:
Access to online counseling services or in-person workshops on mindfulness and meditation, or cover more mental health services in the health plan
Hiring part- or full-time counselors to provide people with easy access to therapy
Create employee-led initiatives for people to share their stories in the workplace and destigmatize mental health
Equity stakes or shares
Recent research shows that 72.3 percent of today's professionals with share options said that having options contributes to their engagement and motivation to stay with their current employer. But why? When people receive real ownership in a company, they feel appreciated and extra motivated to see the company succeed.
A bonus? Providing equity in place of higher salaries presents you with a way to give top talent the compensation they deserve without drawing on your budget. It can also boost your company brand and help recruit even more top talent faster.
HR tech can help streamline the process
Revising your compensation plans and reallocating parts of the budget to cover progressive benefits can be complex. Tech can help finance and HR leaders simplify (and automate) the process.
A quality HRIS can help you keep track of your people and payroll data while centralizing all the information in easy-to-use, customizable payroll dashboards. It’ll help you quickly extract and parse data to identify disparities according to gender, age, location, and more. With tech like this on your side, it’s easy to garner insights into people’s compensation data and your current budget plan–and make informed data-based decisions.
Finance and HR must sync. The success of modern companies depends on it.
With so much top talent quitting or leaving the job market to strike out on their own, modern companies must invest in people-first business strategies. To succeed, CFOs and finance teams must align with their HR counterparts. This way, both teams can better understand how to build people-centric cultures and budgets that keep talent engaged, loyal, and productive.