How to Convince the CFO You Need a Bigger HR Budget

You can’t simply walk into a budget meeting with your hand out and hope to walk away from it happy. Preparation takes time. With the new budget season nearly upon us, hopefully, you’ve already begun. Unfortunately, asking for a bigger budget isn’t as simple as explaining why you need it. To capture the attention of company executives, you’ve got to illustrate why it matters to them. Before the big meeting, you need a detailed HR budget to present to your team. Here are a few considerations that could help you build a better one.

How Does the Company Create Value?

Hiring talent that helps further the company’s goals is impossible without a rock-solid understanding of the business model ”and the assumptions that make it work,” notes Undercover Recruiter. Intellectual capital is an important part of the whole.

Intellectual capital is traditionally made up of three parts:

  • Human capital: knowledge, skills, creativity
  • External capital: relationships, brands, and trademarks
  • Internal capital: technology, intellectual property, policies, databases

HR deals in human capital, so that’s where you need to focus. What knowledge, skills, creativity, experience, and other human capital qualities are most important for creating value? And how does the budget affect your ability to make those talent acquisition investments?

How Do You Measure the Value of Roles Within the Company?

Every department has a role to play and so does every employee within. They’re all components of the business model, but they don’t all carry the same level of importance for value creation.

Talent Growth Advisors explains that the ability to determine value from one role to another is critical to developing a compelling budget case. Link company roles ”to the value creation process,” they explain. Acknowledge that all roles are important, but that they don’t all carry the same weight. Just avoid using too many averages, and aim for more hard facts.

Using a bit of talent forecasting, you can build reasonable projections for the coming year’s talent needs. What level of investment is necessary to source and hire talent for each of those roles in the company? If projections are based on data that you can defend, your argument will stand a much better chance at logically fitting into the value creation narrative.

How Will Performance Improve Under the New Budget?

Getting down to the real heart of the matter, what return on investment can the finance committee expect from granting your budget proposal? This is where all of your research, forecasting, and layers upon layers of spreadsheets come into play.

In your department, a better budget means you’ll have the ability to spend a certain amount on new technology which makes another part of your job easier. You can source talent in ways most likely to secure a great hire, develop new programs for employee engagement and a host of other line items. But those issues probably don’t resonate with company executives.

What do they want to hear? HR C-Suite says, ”Align your budget with better profitability.” That’s how you’ll get their attention. Google has made the HR news circuit lately for this very thing. According to, Google has proven that at least in their company, the investment you make in sourcing and hiring is directly related to company profitability. Hiring the best might take more time, but it’s worth it for value creation and overarching company goals.

How Will the Budget be Allocated?

And now for the finer details. Once you have the committee’s attention, you’ll need to dazzle them with your plans for how the new, bigger, better budget will go to work in your department.

Here are just a few of the HR talent management points you might want to cover and tie back into the profitability discussion:

  • Employer brand building
  • Talent acquisition channels
  • Talent pipeline management
  • Internal leadership development
  • Skills assessments and internal training to shrink skills gaps
  • Benefits that resonate with people in different company roles
  • Programmatic technology that helps you source talent more efficiently and effectively

Budget allocation is where you prove that you’ve done your homework. It uses all of your research, testing, feedback collection and investigation into the competition. And it allows you to paint a detailed picture of the coming year and how this HR budget will help the company grow.

Your case for a better budget next year begins with understanding. How well do you understand your role the company’s value creation? What about the value of all the people you’ll hire next year? And how well does the C-suite understand the relationship between the HR budget and better profits?

It’s not as simple as compiling statistics and making correlations. You need evidence that ties your HR budget to the profitability of the company. If you haven’t started yet, there’s no time to lose.

Subscribe to Our

Stay in the loop on recruitment industry trends, news, tips and tricks.

Job advertising
made easy

Ready to try our AI Recruiting Platform?