Simply by focusing on key cost drivers in HR decisions, lot of money can be saved.

Step one is to think that its your own money that is burning with every decision, and now lets look at the following list that can come handy.


Design a compensation structure that supports a “fixed-variable” mix. Though 96% large corporation have variable pay ranging from 6%-22% as a part of their salary structure, unfortunately only 20% of the small and medium size organization have variable pay structure in their compensation. plugHR helps clients transition from a fixed pay to mixed pay structure. This not only creates a performance culture but helps organization save cost in three ways: saving of 2%-3% of the annual salary bill assuming only 10% of the salary as a variable performance payout.

The disbursal of this variable payout will be based on the performance; following standard deviation distribution model (bell curve) which will anywhere result in an average payout of 7%-8% hence directly saving 2%-3% of the total annual salary bill. Secondly, saving of close to 1% of the salary cost because of non payment due to attrition (if assumed an annual attrition rate of 10%). Third interestingly, variable pay contributes to the earning of the organization in the form of earning from interest which can be upto 0.6% to 1% of the total salary bill. Hence by a simple exercise of introducing variable pay structure and managing it well you generate 4%-5% of value over the total annual salary cost.
You Make About 5% Here.

Hiring Expense
“Even after spending 450 thousand in advertisement we were not able to hire!” In hiring along with the cost it is important to decide on channels of hiring and cost associated with those channels. plugHR with it’s experience of managing hiring across sectors and at all levels, is been able to significantly add value by deciding right hiring channel that gives significant saving on hiring costs. A good channel spread across consultants, direct hiring, referrals and campus hiring can save about 3% - 5% on hiring cost. You Make About 5% Here.

Performance Management System
Performance measurement is a key input for deciding on the pay rise but if this measurement is not well defined or assessment to get measurement is not normalized, organizations will definitely end up either paying more or paying wrong people more. A correction factor of 0.25 on the ratings of 100 people group may lead to almost 5% of the salary increment saving. plugHR not only focuses on measuring performance but also ensures measurement on normalized scale and reasonable ratings, leading to overall saving of 5% approximately on the total salary increments.
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Exit Management
Organization has some critical functions and critical levels, some of them are easy to find and recruit where as some of them are tough and takes more time to fill such positions. Hence we believe organization should have different notice periods at different levels or for different functional. This also saves organization cost of payout to replace a position in the organization. Various decisions regarding payout & adjustments in the notice period is a matter of process and hence it is critical to decide and define full & final settlement process to avoid any kind of over or biasness in such payout. By reducing required notice payout by even 15 days, You Make About 5% Here.

Building Training platform
As a part of standard delivery model plugHR initiates and delivers various trainings programs to it’s clients on different soft skills aspect. So our client not only saves the direct cost of delivery of such programs but it also establishes an environment of training and development which prepares organizations for a formal and external detailed training programs. These programs help in identifying potential employees to invest on and there by increasing the effectiveness of external programs as well. Basic training provided by plugHR itself ensures that You Make About 5% Here.

plugHR Organization Negotiator
Organization human resource budget can be divided primarily into people budget and people services providing budget. plugHR onsite arm directly contributes in people budget by negotiating directly with the people to be hired, and plugHR contributes in people services budget by reducing cost through collective buying and negotiating hard to get best combined deals for our clients in the areas. In some of the areas we also influence administrative cost by connecting and getting direct deals from service providers. Cost impact here can be in excess of 5%.
You Make About 5% Here.