When I meet prospective new clients and find out about their business and why they have engaged us, I will always ask if they have a budget for HR. Usually, the response is no.  Initially, it didn’t worry me, as long as they knew what our services would cost them and they were happy to use our services.  As we’ve grown and started working with clients of different sizes and across industries, it is now becoming more evident that businesses, no matter what size, don’t have an HR budget or think about what they may spend on HR a year.

From my meetings, it seems that most businesses don’t seem to consider what their potential HR costs are going to be for each year. From a selfish point of view, I guess that would be really helpful for me when talking to businesses to know what their budget is. However, the more I thought about it, it should really be part of any business’s strategic plan to have an HR budget of some sort.

Every business at some stage would have paid for some form of HR or employment help or recruitment. That is a good place to start to know what costs to account for in their budget each year.  We have helped many businesses over the years with setting up employment documents, HR processes, personal grievances, mediations, values workshops, engagement surveys, and so on.  Now, I have a fair idea of what organisations should allocate towards HR based on their size and needs.

Depending on the size of your business and how you view HR you should take into account all the key HR activity from the employee life cycle to strategic.


  • Vision and values
  • Workforce planning
  • Talent development
  • Employee engagement
  • Recruitment
  • Salary reviews and rewards
  • Operations (contract updates, new policies, onboarding)
  • Contingency (personal grievance)


You should also work out what you’re prepared to spend per year or at least is in your range. I am always flexible with clients and work with them.

If you don’t know where to start, I am more than happy to have a no obligations session with you and work out what some of your potential HR costs could be and help you plan a budget.  I recently helped a client by advising them not sign-up for a subscription HR service because they didn’t need it at their stage of growth.  All they needed were the basics HR documents. In 12 months, they could take another look at it. It saved them an unnecessary cost. My approach is always practical with the view that it minimi_bses risk as well.