Vibe check! How is your 2023 budget for HR tools looking? 👀
Don't panic if you haven’t even thought about next year's budget yet! 💓 We know it’s hard to get in a future-planning mindset when you’re putting out fires on the regular and don’t get enough time off to recover.
So far this year, HR folks have been tasked with resolving high turnover, navigating an exceptionally competitive job market, sparking stagnant employee morale, and handling all the unknowns of returning or not returning to the office.
If building the case for 2023's HR budget feels daunting, that's partly because you know how integral it is to your ability to meet your department's goals and the company's goals, right? It doesn't help that fighting for an HR budget can be a thankless task. 😓
We’re here to take the stress out of Budget Season so you can evaluate the status quo, strategize for 2023, and set Future You up for success!
Follow along as we go step by step through the HR tool budgeting process:
- Evaluate your current HR toolkit
- Budget for 2023 tools
- Compare HR tools
- Pitch HR tools to your executive team
- Show the ROI of HR tools
Evaluate your current HR toolkit
Before you start budgeting for 2023, you’ll want to take a look at what you already have in your HR toolbox. After all, you wouldn’t go to the hardware store before you looked at the tools you already had at home!
Here are a few questions to kick us off:
- Are there any HR tools your employees love?
- Is there a software program your employees can’t stand?
- Do you offer programs that no one takes advantage of?
- What tools in your existing HR tech stack do you want to replace?
Stress testing your HR tooling this year has probably shown you where there are opportunities for system improvements and which programs you'd like to continue investing in.
For instance, if hiring wasn't a focus in 2022 but you're looking to grow your team in the coming months, is your current hiring platform equipped to help you scale? These are the kinds of questions you and your team ought to discuss before diving into budgeting so you have the lay of the land. Check out our Budget Season Guide to Evaluating HR Software if you'd like more step-by-step guidance!
Our people ops team uses a shared spreadsheet to track the following info about our existing HR tools: ownership, cost per user, billing schedules, and perceived level of value. Then, when you're ready to vet new tools you can use our HR Vendor Evaluation Scorecard template to collect key info about the tools you're considering. That way, when you're ready to make a decision, everything you need will be in one place!
Budget for 2023 tools
Budgeting for the right HR tech stack could be a full-time job, but it’s only one of the many responsibilities on HR professionals' full plates. We checked with our Director of Finance and VP of People Ops to find out how they're budgeting for HR tools in 2023. Their advice:
Figure out your projected headcount for the year ahead, then work backwards to determine what you'll need to get you there. The right HR tools can make an impact on everything from administrative time to profitability!
Of course, there's so much to consider when you're working backwards! For instance, impact, taxes, and administrative time are among the primary inputs that buyers should account for when they're budgeting for an employee recognition and rewards program. (As a benchmark, SHRM recommends a rewards budget equal to 1% or more of total payroll to support a successful program. If you're considering introducing an impactful recognition and rewards system to your organization, check out this Rewards Budgeting Calculator.)
It's okay to skip ahead if you don't have a clue what some tools may cost! Just be sure to go into product demos with a clear sense of your goals for each kind of tool so that you can stay focused and spend your time wisely.
Compare HR tools
Okay, it’s time to get your HR vendor evaluation squad in formation! 👯
Get a few colleagues involved so you can divide the work of attending product demos and engage more folks in the decision making process. This will help you earn program buy-in and build internal product champions from the ground up!
Make sure you're using a shared document to your evaluation squad's call notes, vendor pricing, and everyone's impressions of the vendors you’re considering. Our free HR Vendor Evaluation Scorecard is just the ticket. 🎟
Set a demo deadline to help your evaluation squad stay on track. Scheduling a group meeting to review and discuss all the software programs on your shortlist will make the process more social and engaging. As a plus, why not offer to buy everyone coffee or lunch as thanks for their time and participation? No one can resist free food—and it's actually proven to aid in building community and cohesion, which never hurts a decision-making process! 🍛🤝
Pitch HR tools to your executive team
You and your evaluation squad have found the perfect tool to revolutionize employee recognition and rewards or diversify your talent pipeline or transform knowledge sharing at your organization.
You’re sure it will significantly improve employee retention and morale or support your org's rapid growth or accelerate employee onboarding.
But! Before you can sign on the dotted line, you need to convince your notoriously tough executive team that the tool (and the price) is right. 😤
You can do it! Here's how:
Don’t just tell the executive team about the product you’re pitching—show it to them! Ask the sales rep you’ve been working with for a recorded demo so you can talk less about the functionality and show more of the benefits.
We wrote this post to help folks pitch employee recognition and rewards tools to their executive teams. You can apply the same framework we follow in that post to anticipate questions your executive team might have about any software category you're stumping for.
Show the ROI of HR tools
Proving the direct ROI of most HR tools is difficult! Unless you're making the case for an absolutely necessary investment, like a reliable payroll system for a 500-person company, you'll need cold hard facts to get the cold hard cash. 🤑
In the realm of employee recognition and rewards, engagement, motivation, and morale are key metrics for measuring a program's success. If improving engagement, motivation, and morale aren't justification enough for your executive team, the knock-on effects of effective recognition and rewards might be.
We wanted to share some insights from a recent user survey on the ROI of Bonusly. We’ll let the figures speak for themselves:
- 70% of respondents said that Bonusly improved employee engagement
- Around two-thirds of Bonusly customers reported both increased frequency of recognition and increased visibility of recognition
- 73% of Bonusly admins spend 2 hours or less managing Bonusly each month
Ask the vendors you're talking to for proof of ROI data—no matter what they specialize in, they should be able to give you some information to help you and your team make an informed decision.
If you're in the market for a new employee recognition and engagement program, we’d love to talk about how Bonusly might fit in with your HR tech stack.
We wish you a very productive Budget Season!