Why should HR see the budget?
Paige
153 Posts
Help me out here--I'm in a heated (not really) argument with our general manager (organizationally--we both report to the CEO) as to why HR should 1) be a part of the budget process and 2) be allowed to see the budget. He doesn't think either is necessary--if I have a request, I should submit it and they will tell me if the expenditure is approved or not. "HR has absolutely nothing to do with the budget.
Comments
If HR wants to be more than a clerk like function, and wants to be a stragetic planner (who is involved in more than resolving EEO complaints, and is really involved in how the organization will be staffed in the future), then seeing the budge fits well into that role. It seems like HR in your organization is pigon holed into the non-strategic role. What you need to do is to show your bosses that HR can do more -- that it can help with planning and manpower issues.
Good Luck!!
HR cannot contribute to a business unless they understand the numbers that run the business. That starts with being exposed to the budget, but goes beyond that. HR needs to be on the distribution list to receive the monthly financials so they can help make the numbers. Then HR must do their part to understand the numbers in great detail once they are exposed to them. This does not simply mean are we making budget, but how are the margins, earnings per share, manufacturing variances, overhead absorbtion, ROI, etc? I think that you need to have a conversation with your manager about the fact that you want to be a business partner, not just the HR Department. That you cannot contribute without knowing the financials that drive the business. If he shows no sign of relenting, then I think you need to resign yourself to being a clerical function for whatever time you spend your career there. If you want to progress, you will either need to change his perception of HR or find another opportunity where you do get to look at the numbers. A clerical role is easier, but a strategic role is much more interesting, exciting and fun.
I travel all around the country speaking about the topic of how to make HR a strategic player. It is critical that we change our role as HR professionals if we do not want the profession to leave us behind.
Okay, I've pushed the vein back into my head. Thanks for letting me step up on the soap box. HR is my chosen profession and I want to see us move away from the situation described above.
Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]
In short the executives, for example, don't want to hire an $80,000 year line manager in a section that doesn't need one simply because the senior manager wants to build up his or her empire. By having HR approve the position allocations, that's a large step toward ensuring proper use and payment of employees.
There may be other positive or negative fall-out from the role HR plays or doesn't play in the budget process: such as grievances and discrimination charges, again, depending on what your company's policies and practices are, whether or nor you're unionized, how promotions are determined, etc.
In the end, even that is a bottom line issue.
A budget is only a best guess on an upcoming fiscal year. Market pressures come into play and management does its best to control expenses based on actual revenue. The notion that if anyone wants to request something they can and then "management" will decide if it's in the budget is antiquate and, all things considered, in today's corporate environment, foolish. Put the cards on the table and do your best to navigate an increasingly competitive world; with the help of the entire team. Strategic items of the budget may not be shared, but the basics shouldn't be a secret. At the very least an operating statement and balance sheet should be shared with anyone who wants to see them unless things like raises etc. haven't been shared with everyone yet. I still hold that the senior ranking person of each division of the organization should be privy to all aspects of the budget.
John