How To Plan and Present an Annual Staffing Budget
October is notorious for new year planning, budgeting & forecasting, and with the consistent business ebbs and flows the past few years, having a clear plan around staffing budgets and resource allocations is more important than ever.
I’ve personally worked in the staffing industry for the past 10 years and wanted to provide an overview and some helpful tips and solutions to make sure your team is set up for success when starting to plan out 2023 staffing budgets.
What is a staffing budget?
A staffing budget is money organizations allocate towards their full-time employment, contingency, and temporary labor resources over a 12-month fiscal year.
Each department head is responsible for putting together a budget based on accomplishing the team’s goals, both planned as well as special projects that may arise due to business shifts throughout the year.
How to create a staffing budget
Utilize last year’s staffing budget as a starting point
Starting with last year’s budget will give you a clear idea of how much you spent on each employee, as well as any unforeseen costs that may have come up.
Once you have your baseline, begin to look at what changes need to be made for the upcoming year. This is where conducting a headcount analysis comes in handy (more on that later).
Conduct a gap analysis for your staffing budget
A gap analysis is conducted by comparing your current budget to your desired budget and then identifying the differences.
This can be done by evaluating things like employee salaries, training and development costs, and recruiting and retention fees.
Once you know where your gaps are, you can understand what budget items need to be added, removed, or changed for the upcoming year.
Conduct a headcount analysis for your staffing budget
A headcount analysis is a process of evaluating the current and future staffing needs of an organization.
Conducting a headcount analysis will give you a clear understanding of the staff you currently have, as well as what positions need to be added or removed.
This is important when creating your budget as it will help you understand how much money needs to be allocated toward each position.
Define your department goals for your staffing budget
To determine the needs of your department and company goals for the new year you’ll need to consider things like growth, scaling, and breaking into new areas.
Then, make sure to understand the new organizational costs that may be added on top of last year’s budget.
- Plan for new hires to grow and scale the existing team.
- Incorporate promotions and raises. 3% is the average year-over-year employment raise.
- Allocate a percentage of the budget for performance-related bonuses.
- Plan for attrition and backfilling current roles.
- Allocate money towards special projects that arise throughout the year that may require contractors and temporary resources.
- Budget for consistent staffing allocation and plan for short-term, temporary, or consulting hires for projects that may not need long-term or permanent positions.
For a complete breakdown of all the top Tech, Creative, and Digital Marketing salaries, download our annual Salary Guide.
Questions to ask when building a staffing budget
- How has your company grown or shrunk?
- What new projects or initiatives will be taking place?
- Have you had any recent turnover?
- How many people do you need to hire?
- Are there any positions that can be filled internally?
- What is the going rate for the positions you need to fill?
- What are the skillsets required?
How often should a staffing budget be reviewed and updated?
Budgets should constantly be on top of mind for business leaders. Each month, take inventory of where you stand against your yearly budget and how your business is tracking.
If shifts need to be made to your budget, these should be made on a quarterly basis.
Business ebbs and flows are natural, but if you’re veering too far off track, it’s better to make adjustments and course corrections sooner than waiting until it’s too late to make sure you are able to end the year on target or exceed goals.
Use your data to help you forecast and make sound business decisions should you need to update a budget that’s already been set.
How to pitch a staffing budget
Determine your team’s annual goals
This will help you to establish and communicate how the staffing budget and personnel will allow you to achieve those business goals.
Have the data to back up your staffing budget
Be prepared to present your staffing budget with specific numbers and data points and pitch the Return on Investment (ROI).
Prioritize your projects for your staffing budget
By prioritizing your projects, you can show how each one will impact the business goals and what staffing is needed to complete them.
Always have a plan A, B & C for your staffing budget
You never know when you’re going to be asked to make last-minute changes to your staffing budget or plans. By having a backup plan, you can show that you’re always prepared for any eventuality.
Building staffing into your budget
Building and presenting a new annual budget can be a daunting task, but with a little planning and forethought, it doesn’t have to be.
By understanding your department’s goals, prioritizing each project, pinpointing where there are certain gaps, and how each affects the bottom line and growth of the company, you can easily build a staffing budget that meets the needs of both your department and the company as a whole.
What’s most important is to always be prepared with data and analysis to back up your requests so that you can make a compelling case for why each role is essential to meeting the company’s goals.
To get the most out of your annual staffing budget, consider working with a staffing agency like Mondo and leverage our annual Salary Guide with industry trends and average Tech, Digital Marketing, and Creative salaries to help inform your annual staffing budget.
Get the most out of your staffing budget when you partner with Mondo
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