The role of HR in the post-pandemic world has expanded, and it is now a priority for HR to  compress costs and improve profitability—strategically. This period of swift transformation has caused businesses to bring HR to the forefront

A survey revealed that 34% of HR leaders planned to optimize their HR function budget in 2021. 

The focus of organizations today is on optimizing investments to improve employee experience throughout their life-cycle within an organization, along with employee benefits and employee well-being. There is also a need to prepare businesses for the future of work. Leaders are expected to invest time, effort, and money into building partnerships that can influence the learning agility of the organization and its employees. Aligning employees’ personal goals with business goals has become important to revive the working economy.

And many of them are looking for help to begin right.

With the dawn of 2022, as the world prepares to rebound and re-grow, a sustainable cost optimization road map is of immense value. Here are my top 3 tips for leaders to make HR more effective by ensuring intelligent cost optimization across the hire-to-retire employee lifecycle.  

1.Begin with making smarter talent-based hiring decisions

Deploy a two-pronged approach for this.

      a. Integrate remote interviews and temporary labor with your hiring agenda

Leaders must begin to rethink traditional hiring strategies like on-campus interviews with alternate remote interview methods. You shouldn’t shy away from choosing temporary labor arrangements such as gig employees or freelancers to encourage a speedier economic recovery. 

         b. Tweak your hiring strategies with agile, current data insights 

HR leaders must tweak their hiring drives with such insights. A customized program for neurodivergent employees in real time using training software can help them secure the right talent.  You should be quick on your toes when it comes to leveraging data-driven insights to modify your current style of shortlisting talent. 

2.  Foster a culture of “continual learning”

Choose the right tech-empowered partner organizations that can help design smart, personalized learning and development plans for your employees. Invest in Learning Experience Platforms (LXPs) that leverage powerful data insights and provide interactive learning modules in a few clicks. 

According to a survey, 90% of global organizations agree that there is an unmissable skill gap in the new world of work. Not even half of them have an exact plan to close it.

• Reskilling to close existing talent gaps is the best bet according to many CHROs and business leaders. Partner organizations can help you identify skilling opportunities according to their impact on the business, impact on the customer, time criticality, and risks.
• They can help provide customizable learning plans, enabling employees to self-manage their learning journeys and achieve immediate targets using bite-sized content and interactive, collaborative methods. 
• They can help choose the most suitable LXPs that could be easily integrated with your organization’s core operating model, enabling workers to learn on their devices without making major technical switches.

3. Choosing flexible and simple performance evaluation models

A report by Gartner HR Research revealed that organizations that choose flexibility in managing employee work lives are three times more likely to experience higher, better performance. 

Successful organizations have considered flexibility a must while undertaking cost optimization initiatives with respect to employee performance. Businesses now need to evaluate employees against their self-authored goals in line with organizational objectives. This also implies that a user-friendly performance management system must be available. Here’s a checklist for you to consider while choosing the right performance management system:

Figure:  Things to consider before choosing a performance management system

Measuring human resource costs has always been one of the most popular components of HR accounting. To combat the disruption and economic uncertainty caused by the pandemic, HR leaders all over the world, are asked to take more responsibilities to reduce costs.

But it is advisable to not view HR cost optimization as a short-term goal, especially when evaluating potential initiatives that offer immediate savings and rule out unforeseen business impact and key trade-offs. 

• CHROs must focus on creating a streamlined recruitment strategy that leverages data-driven insights and supports alternative employment methodologies, ultimately resulting in saving from unpredictable replacement costs.
• CHROs must focus on choosing the right Learning Experience Platform to help their employees gain important job-relevant skills digitally. Helping them learn while they work can be one of the many ways how employers can avoid aggressive staff turnover in 2022, research says.
• CHROs must focus on monitoring employee progress using a performance management system that pivots on flexibility and simplicity. An ideal PMS helps HR and business leaders align organizational goals with the personal goals of employees in a quantifiable manner.

When HR costs are optimized, leaders get to explore new and impressive ways of operating, being creative, and building morale. As times are changing, businesses cannot afford to not optimize HR costs. And, they shouldn’t.