Are you in the middle of the yearly busy budgeting days? Have you found the perfect formula? Do you have the magic stick that makes all figures fall into place? Is the budget balanced? Did you include the human factor?
Most companies have a budget. They are all more or less looking the same. All include the expense of having employees. Salaries are included, but too few budgets include the wholeness of the human factor.
Include the Human Factor
“Our people is our most valuable asset” is a value a lot of leaders put forward in their yearly speeches. Most budgets traditionally include recruiting and training as a cost to increase the value of people.
Balanced budget requirements seem more likely to produce accounting ingenuity than genuinely balanced budgets -Thomas Sowell
I have a basic training in economy, and I have always wanted to underline ONE single answer in the budget. My experience from HR has however taught me that dealing with people requires budgets including the wholeness of people interaction.
Recruiting should not only include the cost of recruiting a new person. It should also integrate the fact that new recruits need time to adapt to the company culture. They need time to become included into the team. To make a new recruit a success, he or she needs the time to adopt business vision and values into daily work.
Training of your employees should not only be the training cost itself. The training line in the budget should include the time and cost needed to transfer information between colleagues. The alignment of training and business procedures need adapted work tools. Transferring new knowledge into enhanced performance takes time and should get a larger place in the budget spreadsheet.
Plan for the Unplanned
The unplanned is rarely included into budgets. With change and innovation becoming more and more important for business survival, it is crucial to include the cost of the unplanned into budgeting.
For good ideas and true innovation, you need human interaction, conflict, argument, debate – Margaret Heffernan
The cost of innovation should not only be in the R&D budget, it should also be included into the salary and training budget. The cost and time of discussions and conflicts is rarely included when companies plan for change. The time people need to adapt to the change and the cost of human reactions should be taken into account in all budgets.
A good budget should reveal more parameters. Change should be included into excel. Good budgeting systems should open for deviations to reflect that your company is adapting to innovation, to change and to its own future!
Budget Good Leadership to Ensure a Positive Bottom Line
In some countries, a percentage of the budget has to be earmarked training. Worldwide bigger companies mostly have a training system. Too few companies though have a training plan included into the long-term strategy. Only a few companies have a plan focusing on increasing good leadership that improves the bottom line.
The cold harsh reality is that we have to balance the budget – Michael Bloomberg
The cold harsh reality of good management should be translated into all strategies and budgets. Improved leadership reduces cost. Budgeting for leadership training that motivates people to perform should be the baseline of any budget.
Motivation and inspiration should be included on the cost side to increase business results on the income side. Leaders should be trained in attitude and people understanding. Budgets should increase the cost of connecting colleagues into a team. These additional costs will for sure reduce the cost of retention and in total improve the strength of the budget.
When you’re dressing on a budget, simplicity is key – Ne-Yo
Investing in your people’s performance has a huge impact on your bottom line. Including the wholeness of people performance will make your budgets simpler. Budgeting the human factor gives you a balanced budget that increases your results!
Good luck with setting up a budget including human factors!
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