As an HR professional, you’re charged with not only maintaining benefits that are competitive and meaningful but also staying within budget for your department. Staying within budget is often the most challenging aspect of the human resource professional’s role; after all, competitive benefits come at a price.
Here, we share 4 ways to keep creeping HR costs low:
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#1 Avoid recruiters unless your life depends on it
Recruiters aren’t unicorns; they aren’t doing anything you can’t do yourself, but they charge up to 30% of an employee’s annual salary just for sending them your way. Avoid using recruiters by utilizing online platforms like LinkedIn instead. Build your own network of candidates and stay in touch quarterly with a social media posts, a brief email sharing open positions, company news, recent achievements, or just friendly greetings.
LinkedIn can help you maintain and organize your pipeline, but you might find that you keep the same level of detail in your records using a program that you already have access to like Microsoft Excel.
#2 When it comes to health insurance, think outside the box
Balance billing is expensive and unpredictable, leading to the kind of HR costs that creep up on you and leave you choosing between pulling benefits or going over budget. FairPrice is one great solution to reduce your spending on health insurance in three primary ways:
- They utilize reference-based pricing, which ensures you know exactly what to expect and can set firm limits on employer spending
- Making reference-based pricing easier on the employer by answering employee questions, directing them to the right healthcare providers, and provide the benefits support that usually comes from the HR department
- By mitigating the risk of surprise balance bills by offering Balance Bill Indemnity Insurance, so your employees don’t have to take on extra risk just so the company can manage their budget
#3 Address productivity
Remember that the HR budget depends on productivity and efficiency, so staying within budget doesn’t always have to mean cutting costs if you can increase revenue per employee. There are several ways you can increase your return on investment without putting more funds into it:
- Promote cross-functionality, which allows certain employees to move fluidly between roles to accommodate the ebb and flow of your industry. This ensures that you don’t have to overstaff your departments to satisfy the most demanding day of the year and then adjust to the cost of overstaffing the rest of the year.
- Conduct periodic employee engagement surveys and thoroughly evaluate the results. Establish a continuous improvement plan based on the information your employees have shared – which is rarely monetary. Do they feel challenged and appreciated? Do they know what’s going on in the company? These fixes can increase productivity with little monetary investment.
#4 Never get too comfortable
You wouldn’t buy a house without viewing at least a few options, right? As a matter of fact, if you’re like most people, you wouldn’t even buy a new printer without comparing a few different models. Likewise, you shouldn’t spend thousands of dollars on employee benefits without evaluating multiple options.
Never commit to staying with the same company just because it’s easy or you’re satisfied. Every time you renew the benefits that generate your biggest expenses, it’s important to get at least three proposals and compare your options. This ensures that you’re always getting the best price for the best products, and even if you’re not open to changing providers, competitive quotes might be just the ammunition you need to negotiate down your rates.
Put together a business case (you can find some great templates by conducting a quick Google search) comparing all of your options to ensure – and prove to the C-Suite – that every dollar is well spent.
Be creative and open-minded to keep your HR expenditures within budget despite the rising cost of benefits and talent.