It’s that time of year again when finalising budgets for the next financial year is in full swing and I am often asked by businesses what should they be factoring into their budget when it comes to their people. It’s definitely not a one size fits all and the initiatives you factor into your budget should align with your strategy and business plan, however, it’s also important to consider what’s happening – what’s at play in your workplace and more broadly, the market.
I don’t think there is a business that hasn’t struggled to recruit people over the last 12 months, and there has been a lot of focus on how to recruit – find the right people and how to engage and retain our people to reduce the need to recruit. Initiatives to these kinds of challenges are what you might want to build in a budget for in the new financial year.
While interest rates have been rising and the costs of goods and services have gone up, so far, I am not seeing businesses stopping hiring or reducing their headcount. Many businesses are still struggling to find talent, particularly the right calibre of talent and even if the job market does soften, I am not expecting recruiting talent to become easy. Therefore, for the year ahead, recruitment, engagement and retention will continue to be a HR priority. If you are considering what to factor into your new financial year budget when it comes to your people costs, here are some ideas:
Employee Value Proposition
An Employee Value Proposition (EVP) is what attracts people to work for your business and what keeps your existing team wanting to work for your business. It’s about who you are and what you stand for and the experience an employee will get by working for you. If you don’t have an EVP, investing in developing one will help with attracting, retaining and engaging your people. If you do have one, the focus should be on how to promote and market your EVP to future talent and your current employees. Developing, implementing and marketing your EVP doesn’t have to be a costly exercise, but it does take time and effort and requires you to invest in keeping it ‘alive.’ It’s not a set and forget initiative. Depending on if you build in any perks to your EVP is where the budget allocation comes in, but a great EVP is not about having the most expensive perks, the focus should be on the employee experience.
Health & Wellbeing
Poor employee wellbeing is costing businesses more and more, and changing legislation and requirements for employers in regards to psychosocial health will continue to be a focus and priority for businesses this coming financial year. The opportunity here is for businesses to look at what they offer their employees when it comes to health services and EAP. It might be time to take a look at what you are offering in this space and have a good look at how effective your current EAP offering is in terms of uptake and proactiveness. This is a space that is evolving and new service offerings that are more holistic in terms of employee wellbeing are emerging. For more information on a holistic approach to employee wellbeing you might like to check out CU Health.
Training and Development
Due to the challenges in finding talent over the last couple of years, I am hearing from many businesses that they have hired new people at a lower skill base than what they have in the past. To set these people up for success in your business, a focus on training and development for both technical skills as well as soft skills will be critical. The technical skills can often be easier to train and develop and it’s the soft skills that are overlooked. When those soft skills start to impact performance, we often start to think that the employee is not a good culture fit and it’s then we start to try and address the skill gap or the employee moves or is moved on. Taking a more proactive approach to and investing in soft skill development will be key in engaging and retaining your people in the year ahead.
Recruitment
Many businesses I speak with have reported that recruitment advertising on the traditional channels such as online job boards is not resulting in attracting the right kind of talent for the vacancy they are recruiting for. Many businesses we have been recruiting for recently have tried recruiting themselves and used these traditional advertising channels with no success. While the job market may soften in the coming 12 months, I anticipate it will still be a relatively short candidate market. Therefore, rethinking your recruitment strategies and investing in how to attract and source talent will be a priority. Continuing to throw money into adverts that aren’t working is pointless and consideration should be given to how you can take that advertising spend and use it on other strategies to get a better return on investment. That might be using a recruitment agency, headhunting, building your employer brand to attract talent to your own website (links in with your EVP), developing your ideal candidate profile so you can be more targeted in trying to find the right candidate in the market are all elements of a recruitment strategy.
In addition to these initiatives, don’t forget to factor in award pay rate increases (yet to be announced) and the increase in superannuation from 10.5% to 11%.
Even if you have your employees on salaries, it will be important to ensure your employees remain ‘better off overall’ and we’d encourage you to complete a Better Off Overall Test for all your employees to ensure you remain legally compliant.
If you’d like to know more about any of the initiatives we have raised here as you put together your HR budget for the year ahead, we encourage you to get in touch with us on 5331 1734.
