7 Great Ways to Invest Your HR Budget in 2016, Part 1
As we enter the last quarter of the year, many of us are beginning to think about strategy, planning, and budgeting for 2016. At this moment, recruiters and talent management professionals should be reflecting on the successes and failures of the past year, thinking about new, improved approaches for the next year that could yield better results.
There are plenty of tactics and strategies out there to guide your planning for 2016, but not all approaches are created equal. Selecting the way forward for your organization can often feel like a dangerous gamble.
And let’s be honest: choosing where to invest your resources next year is a gamble. To increase your chances of winning that bet, consider investing your HR budget in one of these areas that promises to deliver a great return:
1. Reinforce Behavioral Interviewing
Ninety-four percent of the most successful organizations use behavioral interviewing, in which candidates demonstrate their skills by describing specific, real-world examples of those skills in action. So behavioral interviews are not just a nice HR initiative — they are effective ways to driver greater commercial performance.
Despite the benefits of behavioral interviews, research shows that 92 percent of organizations still engage in informal, unstructured interviews. Is your organization one of those companies, failing to take advantage of a great interviewing method? You may want to bet your HR budget on behavioral interview training and related initiatives. Doing so is likely to yield a strong return on investment.
2. Introduce Quarterly Performance Reviews
The appraisal process has come under attack recently. Confidence in performance reviews is at a serious low in the eyes of both employees and managers, and a few firms are doing away with annual appraisals altogether, replacing them with lower-stakes quarterly check-ins.
This method is proving to be quite effective: research from Bersin by Deloitte found “companies that set performance goals quarterly generate 31 percent greater returns from their performance process than those who do it annually, and those who do it monthly get even better results.”
Betting some of your HR budget on reforming your annual appraisal process should deliver excellent investment returns for your business.
3. Embrace Business-Case-Driven HR Practices
According to research from Bersin & Associates, the No. 1 practice that yields the most HR impact and ROI is taking a business-case-driven approach to HR, rather than relying on gut feelings and instincts. The business case approach is marked by HR teams making a much heavier use of data and data analytics in order to make decisions and implement strategies.
Is your HR department still following its feelings? Then it may be time to invest in data and data analytics.
4. Train Your Middle Managers
An awful lot of a company’s training budget is spent on developing senior leaders; as a result, middle managers are often overlooked. Research shows that middle managers are being undervalued by firms, and this undervaluation may be negatively impacting their performance.
One of the biggest ways to boost corporate performance, then, may be to spend some training dollars on middle managers. This People-Profit Chain analysis shows that high-performance organizations are 9.5 times more likely to ensure that middle manager behavior is geared toward corporate goals. Middle management engagement, it seems, is crucial to strategy execution.
One of the best areas to invest your HR budget this year might not be in C-suite leadership development, but in more targeted training within the middle management layer.
Found this article useful? Check back tomorrow for part two, where we’ll explore three more ways to invest your HR budget smartly in 2016.