Huma Ponders: Should HR Have a Seat at the Budget Table?

Running a business means making a lot of decisions. Simple decisions and decisions that affect everyone who works in the company. And many of the ones that affect everyone are made in budget meetings. However, it's often the management and not the employees who decide the budgets. But there is one person (or more) who represents both sides, and that's HR. So then we wonder: Should HR sit around the budget table?

The link between management and employees

The people who work with HR are perhaps the ones who know the company best. We could call them the link between management and employees. It's HR that takes care of matters relating to personnel.

HR people attend the vast majority of staff meetings, and often attend meetings with the management team. But what about budget meetings? It's often the case that company budgets affect employees. But on the other hand, the employees' case can speak against the budget changes.

Imagine that times are bad. Money has to be saved, and the money has to come from somewhere. The office's lunch scheme costs a lot of money, so management decides to cut it out. Of course, this sucks for the employees, so HR will probably struggle to find somewhere else to recoup the costs of the lunch scheme. In other words, it will be easier for management to make budget decisions when the employee representative is not present. But should it be like that?

Is it so important to think about the employees?

How important is it really to think about the employees? As long as the company is able to produce what it sells, it's fine, right? Well, it's probably not that simple. HR is a strategic partner that connects people, structure and competence. They are also an important contributor to the corporate culture, so they know that it's important to pay attention to the employees.

After all, the employees are the ones who make the company go round. Yes, management is important, but they wouldn't have a company to manage or a product to sell if it wasn't for the employees. So let's go back to the lunch scheme. Yes, you might save that money, but is it worth it for what you risk losing by removing the scheme?

Sometimes you're forced to make decisions that may not be the most popular with your employees. You simply can't get away from it. But then you should at least present it in a way that is perceived as actually necessary and good for everyone. 

Conclusion

Short and sweet: Yes, HR really should sit at the budget table. Budget meetings are often about making changes in the company, and changes that employees are not involved in are rarely good. HR as the employees' representative is therefore an important contributor.

"Well, it can be more difficult to reach agreement on decisions. But you don't get to the best possible outcome without some friction, do you? No, we don't think so. Multiple perspectives and multiple possible solutions will in most cases lead to a better result.