The pace of change in the industry has accelerated rapidly in the last two years, and as in many sectors, HR will have many challenges and goals to achieve.
The outlook for the coming year is beginning to take shape, and companies are starting to budget for 2023, considering all aspects.
Miguel Ángel Cruz Flores, Head of Advanced Modular Consulting BU at MBI Talent Group, shares his background, expectations and recommendations on this topic.
Achieving a well-planned and documented HR budget demonstrates strategic thinking about the expenses that could be incurred. This will be critical by 2023 as 60% of business leaders globally expect HR to be a key driver of corporate decision-making.
Planning the budget for this area is an action that can’t be taken lightly. It is not just a matter of allocating funds. It is a process that involves analyzing, identifying and forecasting scenarios, eventualities, needs and changes within and outside the company.
Human Resources funds should include everything from recruitment to salaries, training, talent management and even the implementation of risk prevention strategies that strengthen the well-being of human capital. That is why having a lousy recruitment procedure can be detrimental to your company.
There are so many factors that come into play in budget planning sothis process must follow guidelines, so that at the end of the year, it translates into a successful and productive investment that also values the participation of the workforce within the organization.
Miguel’s career goes back several years, and he has been able to develop personally and professionally. He has studied Administrative Computer Systems, with a Master’s Degree in Human Development, also has certifications to build human capital groups, and is a personality and competency test evaluator.
Within MBI Talent Group, he promotes consulting with different projects and also develops the Business Development team by giving them more tools to increase the company revenue. For him, one change that has been growing is the requirements for the C-suite of soft skills, as it now carries greater weight. In recent years, companies have implemented mentoring to develop social intelligence skills.
In his words, face-to-face training is slowly making a comeback due to the need for companies to continue building strong organizations. However, some advantages have been discovered, such as the democratization of training and socialization of foreign teams, which opened the panorama for massive events to be held remotely, including distant people.
The metaverse has been an important parameter in the digital world, combining virtual reality with AI making, through studies, an in-depth study of the speaker, and improving some of their skills by providing qualification and support in areas of weakness.
From Miguel’s vision, technology within training creates generational changes that companies can take advantage of, to maximize its benefits and improve their training processes. On the other hand, HR leaders will take more initiative to incorporate more technology. He also gave examples of web tools that allow people to be trained more dynamically.
Organizations should exercise an incremental budget for the following year, based on the personnel budget of the previous year.
HR leaders should confirm the importance of the department by designing strategic plans for the different areas of the organization, from succession planning to employee welfare, among other points.
For him, the benefits of having an annual budget plan are:
- Maximize investment results by being able to carefully analyze which actions are in-house and which ones you need help from strategic partners
- Evaluate the value propositions calmly to determine which will have the best results
- ROI is measured differently
“The planning has to go with the long term line that the management has to strengthen the key competencies that can lead to exceeding expectations”—Miguel Ángel Cruz
For him, companies will focus next year on leadership skills for newly promoted managers, communication skills and effective teamwork. One of the challenges will be how to continue to strengthen the organizational culture and avoid employee turnover.
Miguel Cruz shared the International Monetary Fund’s global growth projection figure for 2023, which is 2.7%, lower than last year and points to a clear slowdown where economic activity has not been able to recover due to many factors.
In terms of talent, this means that digital industries with accelerated growth will be in a better position to attract and retain talent, such as blockchain, augmented reality and metaverse, artificial intelligence, the internet of things, and fast network protocols like 5G.
While technical skills will be key to keeping up, it is precisely the automation of information flows that will demand us to further develop skills in effective communication, active listening, conflict resolution, coaching, and team empowerment.
“The companies that best know how to align the talents of their employees to training programs that exploit these strengths, will achieve lower turnover rates and will reduce the importance that the employee gives to the perceived salary”—Miguel Ángel Cruz.
A poorly planned budget means that money can run out faster than planned in an organization.
It also means that resources are wasted without benefit in return. HR budgets are critical to the business, but their importance is often overlooked. That’s why the best way to prove your worth is to plan a budget that fits the organization’s needs and strategies.
How do you plan your company’s annual budget? Stay tuned to MBI Talent Group’s blogs for more topics of interest.