What I wish I knew while planning my first HRMS budget

Establishing and maintaining your first HRMS budget can be a daunting task. It sets the baseline for cash allocation in future years. Your performance review may reflect how well you’ve managed to stay within your budget. With so many things riding on budget planning, how can you be sure to get it right? Here are three things I wish I knew when planning my first HRMS budget.

1. Implementing functionality will bring requests for more features

A sign of a great implementation is that users love your HRMS so much that they want more functionality. When you plan your HRMS budget a year in advance it can be difficult to foresee how strongly the users will support your system. A top tip is to keep a line item called ‘additional enhancements’ to be used for small items that can be easily implemented in the HRMS to keep users happy.

2. Build in a 10% buffer

Use actual amounts when making your budget but always add in 10% to allow for slight variances or price increases. Costs for external consultants, licensing fees and paycheck stock are going up each year. While you want your budget to be as close as possible to your actual costs, a 10 percent differential will protect you from any unexpected increases.

Use this HRMS pricing guide to start planning your HRMS budget as accurately as possible

Many companies operate under a ‘use it or lose it’ system and your future budget may be lowered if you underspend. If your company operates in this style be sure to use any excess prior to the close of the budget year. Some easy spending options are professional memberships in HRMS associations or vendor training credits that can be used in the future.

3. Going the cheapest route may cost more in the long run

The least expensive option is not always the best choice, especially when it comes to budgets. I have seen a scenario repeatedly and I’d like to share it with you. An HRMS implementation is done with minimal training, with consultants training the project team and end users. There is a decision not to allocate funding on training courses. After the HRMS is launched and the support team takes over there are tasks they do not know how to do properly, like advanced reporting. Without a training budget the team muddles on causing larger problems in the HRMS. Finally, consultants are brought in to fix issues and the team is sent to training. As you plan your budget consider the risks each time that you decide not to allocate budget funds.