Top 5 HR Priorities of HR Budget 2021
I remember reading an article sometime back where The Economist had conducted a study post the Global Recession and analyzed how it impacted major roles in the organizations. The biggest loser as per the study was CHRO as HR experienced the greatest budget restrictions. With the world reeling under a pandemic and with the global economy seeing a downturn, year 2020 seems to be like a déjà vu.
While many organizations are already looking towards stabilizing their businesses next year, the full extent of the economic contraction due to the pandemic is yet to pan out completely. Hence, planning as to how the balance sheet will look like by the end of next financial year is going to be critical.
HR needs to remain cautious and be frugal when it comes to expenditures, but at the same time continue to adopt strategies that balance employee development, motivation, experience, engagement, and performance while protecting their core businesses. So, what should be the top 5 priorities for HR while budgeting for 2021?
Re-Evaluate the Key Initiatives – Change Management and Organization Design
As per Gartner, this is one of the top priorities for 46% of HR leaders today. Change is difficult and a majority of workforce is not changing ready when required. Hence, most of the change initiatives and the necessary organizational transformations have been progressing at a snail’s pace for a long. But now, the effects of a pandemic have been an eye-opener to the series of unknown possibilities that lie ahead.
To be prepared for this, organizations need to adopt a future-forward work design where employees can be changed responsive, in sync with the customer needs, and anticipate changes that come with it. Rethinking work design will not only build organizational resilience but will also help to be in pace with fast-changing business conditions. And unlocking employee responsiveness means getting them re-skilled to newer competencies and acquainted with to latest technologies which bring to our next priorities.
Develop A Learning Organization
Fostering an environment of constant learning has always been the key to a sustainable business and the pandemic has only reinforced this need. If people and organizations are not learning, they risk being obsolete tomorrow. Hence reskilling and upskilling are norm of the future to build critical skills and competencies, even for mere survival. Organizations must start co-owning the learning needs along with the employees if they want to grow in business and achieve operational excellence. Moreover, the pandemic has forced to find alternatives to in-person, onsite pieces of training and on-the-job learnings. Augmented reality and virtual reality are also being used to disseminate the training programs. For this, assessing cost-effective online learning opportunities needs to be accommodated that suits a remote work environment.
Adoption of New Technology for Efficiency
Technology is pivotal to reimagine and redefine the work structure. When the pandemic hit us, organizations across had to adopt various technological options for business continuity while working remotely. Now that it has become the new normal, businesses have to think about a tech-led business model if they want to scale up in the future. For e.g. investing in tools like AI chatbots for gauging the pulse of the workforce will give insights into people’s behaviors and preferences to engage with them proactively. It shall empower people to connect, communicate, and collaborate with those who are physically scattered more than ever now. Apart from this, process automation for real-time data handling will be critical in creating an agile HR, which shall then focus more on meaningful initiatives and business problems without worrying much about the mundane tasks.
Focus on Holistic Well-being
Employee well-being was already a part of the overall engagement agenda much before the pandemic hit us. But now, organizations will have to refocus on holistic well-being to strengthen the trust of their people. Hence, physical, mental, and financial well-being of people will take the center-stage. Rethinking the holistic aspect may include inclusion of wider coverage of health insurance and health checkups, providing fitness program subscriptions, counselling sessions, and financial advisory on tax saving and wealth building. Today, people also wish to work for organizations that truly care for them. Helping people manage uncertainty and ensuring their well-being will likely raise engagement levels, enhance productivity, and build employee loyalty.
Expand the Bouquet of Benefits
Compensation& Benefits is another vital area which is all set to get impacted in the new normal. The talent market has tightened up and there is a talent war to acquire the top talent. Great benefits help attract and retain that talent and by reducing the turnover, businesses can save money in the long run. As per the findings of a recent survey by Willis Towers Watson, half of the organizations have already made changes to their benefits program while another 11% are planning to make the changes. Expanding the benefits package to include offerings like comprehensive Employee Assistance Programs, stock options, work-related or lifestyle-related benefits which can be offered to support the workforce.
The focus of organizations has shifted from survival and resilience to recovery and the long-term health of the company and redesigning people experience will be more critical than ever. High-touch and high-care work culture which truly values employees and caters to their learning and growth should drive the HR budget for 2021.