Workforce Plans & Driving Results Through Compensation

How does your budget align with business and HR objectives? Will you need a bigger budget for new headcount, promotions, and/or critical roles?

Workforce Plans

There is a concerning gap between compensation budgets and workforce planning. We observe that too many organizations do not budget for critical activities arising from workforce planning.

According to the WorldatWork, 46% of Canadian organizations do not account for promotional increases when creating their budgets for salary increases.

As a result, more than half of these organizations (54%) relied on savings from vacant positions or downsizing or drew money from their merit budgets (22%) to balance their budgets. (WorldatWork Salary Budget Survey 2022-2023).

A robust planning process includes calculating the costs associated with headcount changes, promotions and other development activities as well as considering if critical or hot jobs will need different programs or budgets.

Driving Results

Effective total rewards can be a major point of differentiation for organizations. When executed properly, they allow your organization to better focus on strategy and effective decision-making, while enhancing your ability to attract and retain a highly engaged and productive workforce.

More practically, compensation costs are typically the biggest expense your organization will incur – it typically represents anywhere from 30% to 70% of an organization’s overall costs.

Yet most HR departments spend an average of 15% of their time managing the cost of labour. (Paycor, 2022)

When looking to optimize your investment, consider direct compensation costs such as salaries, bonus payouts, and costs for benefits and retirement programs but also consider how the timing and administration of your compensation practices impact your bottom line and your results.

Like this article? These questions, “How does your budget align with business and HR objectives?” and “Will you need a bigger budget for new headcount, promotions, and/or critical roles?” are just 2 of 10 critical questions you need to ask to help you with your 2023 compensation budget. To learn more about the other critical questions and how to address them, you can download our complete and complimentary white-paper here:

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