Brooks: HR, it’s time to go big on your budget requests this year
It really chafes me that there are far too many human resources professionals out there who do not get the amount of respect, authority, appreciation and enablement that they truly deserve. Back in the Aughts, when I first got involved in HR through the side door of diversity and inclusion, I kept hearing my colleagues speak about wanting to “have a seat at the table.” Hearing this made me immensely curious, and as I learned more, I was puzzled to find out that, for years, many of them had struggled to even get invited to executive meetings or to have a direct reporting relationship with the top person.
Thankfully, we’ve come a long, long way as a function (and as professionals) since then! As I shared in my first HRE column at the start of the pandemic, the “Roaring ’20s” are indeed a time for HR to roar. The Great Recession is now seen as a moment that led to the “rise of the CFO,” and this brutal pandemic is increasingly elevating chief people officers and their teams to a new level of prominence. Retained search firms have shared stories of Fortune 500 firms replacing CHROs who weren’t seen as being able to step up and lead from the front during such a critical time. Board and C-suite executives have never needed and valued the role of HR more; in fact, many recruiters have more HR open jobs than they can fill.
But much like other things these senior stakeholders proclaim that they want (innovation, flatter organizations, more diverse workforces), there is often a grand canyon that exists between stated commitments and actually doing the things it takes to drive real change and fulfill these objectives. The exact same thing is happening in HR: In this second war for talent (another trend I wrote about), these executives are more focused on HR than ever. But are they really setting us up to succeed?
From what I’m hearing from countless HR professionals across the country and the globe, expectations on their scope, speed to adapt and ability to fix nubby, long-standing people challenges are rising far faster than their capacity (and resources) to meet them. This is a massive risk to HR functions and the careers of anyone in people operations, as this increased focus on HR could easily turn us into the scapegoat for organizational challenges that we don’t fully own. Think of this as resentment in escrow.
So, what do we do about it? Ask for money—a whole lot of friggin’ money. I mean in the 2022 budgets you’re working on right now (and perhaps your compensation, too). If HR were to be outsourced entirely, and the statement of work massively changed (read: Hire in an impossible talent market, figure out a moving target of a return to the office, drive huge progress around DEI, figure out hybrid work, roll out a bunch of software, make sure that people stay engaged even though our employee experience is built around the office, onboard virtually and make damn sure our best employees don’t quit), then you’d expect your third-party provider to submit a pretty massive change order. More scope, more money.
But most HR departments are only asking for extremely marginal increases in their budget (if they’re even asking for anything at all). The math literally doesn’t add up when we do this—agreeing to deliver massively more without the support and enablement we need to be successful. A consulting partner I once worked for called this “milking mice.” When we use a prior year’s budget and keep it flat, or only increase it by a few percentage points, then we’re not doing what the best CFOs insist upon: zero-basing budgets to build, from the bottom-up, what’s truly needed for the current reality.
The secret that HR people don’t often know is that CFOs do a great job in lowering expectations around budgets, even intimidating colleagues, so that they can “control expenses”—when, in reality, it is often the CEO who makes the final call. Budgets are a game, a negotiation, and the resulting budgets are ultimately a reflection of what the organization values. Too many HR executives I am speaking with right now are literally negotiating against themselves, too afraid of rocking the boat or facing rejection by putting in budgets that reflect the true resources needed to move the needle. (By the way, have you ever heard of someone in HR being fired for asking for a big budget? Me neither.)
If you want to be taken seriously, to have the “executive presence” you might have gotten feedback about, then calmly ask for (and justify) a whopping budget increase. Regardless of the result, I am fully confident that you will earn the respect of your colleagues, as well as feel proud of yourself, for “going big.” One transferable skill I learned on a nonprofit board is that people respect you more for asking for more. And if we’re entrusted with the resources we advocate for, then we’re of course accountable to deliver.
It isn’t our job to say “no” to ourselves. And when we say “yes” to huge increases in scope without accompanying resources, we’re communicating back that we were previously overfunded or underutilized as a function, which reduces our credibility and erodes trust with senior executives.
So, ignore whatever guidance finance has given you about your budgets. Build the resource plan, including both headcount as well as increasingly third-party services like software and professional services (that are faster to deploy and easier to turn off in lean times) that will set you up for success. Be clear about the consequences of not getting the increases by forcing ruthless prioritization (“Here’s what we won’t be able to do without the budget”). Make executives make hard choices.
We have to stop being complicit in running programs and a function “on a shoestring.” It is unbecoming—and in the end, only sets our organizations up to fail. We teach people how to treat us, and then just like employee compensation, the squeaky wheel gets the grease. Go big, my friends!