Without a solid budget, even the best recruitment strategies can leave you wondering where all the funds went at the end of the year. But, even experienced HR professionals, find it difficult and downright daunting to make, manage, and monitor the recruitment budget. And so, here are 7 steps to help you create the right budget that minimizes unplanned costs and maximizes recruitment ROI.
1. Calculate the Number of Hires and Cost per Hire
The major expense of any company is its employees. But, before you get started with the math, make sure all your managers know their requirements in terms of new hires. Below is a sample sheet for your reference. It will help you in determining job requisitions more accurately and make it easier to arrive at the right recruitment budget.
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In addition to these numbers, you need to know if these roles are to be filled by trainees, assistant managers, or senior managers and their niche skill sets. This will help you budget for the expenses for each team in the coming year. These numbers should be based on the company’s turnover in the past years so you know the exact number of hires to hunt for.
2. Estimate the Cost of Recruitment Marketing
In order to arrive at an accurate recruitment budget plan, you need to consider all the basic costs associated with the recruitment ads, job boards, online job listing sites, recruitment consultants, employee branding initiatives, and interviewing expenses.
3. Take all the Fixed Costs into Account
In any recruiting budget, the fixed costs are the expenses that need to be incurred on internal salaries, external recruiting agencies, social media promotions, job fairs, conferences, and events. This should be inclusive of all the costs associated with traveling, meals, lodging, and gifts.
4. Budget for Training and Development Programs
Your potential employees always look for job opportunities that offer professional development and growth. Training programs help hone their skills and so a part of your HR budget, should be dedicated to supporting their career growth. This should include the cost of workshops, online courses, seminars, symposiums, and reading materials.
5. Guestimate the Cost to Upgrade Your Recruitment Process
The HR landscape is constantly evolving with the advances in HR technology like applicant tracking systems and video interviews. When the recruitment process is automated, it helps save a lot of time, effort, and resources that are invested on mundane, manual processes.
Upgrading the recruitment process with applicant tracking system and video interview software will accelerate the time to hire, improve the quality of hires, reduce hiring cost, and ensure a positive candidate experience. So add HR tech to your recruitment process even if it requires you to pay fees upfront. It will eventually pay for itself by keeping you on top of everything in real-time and help you stay efficient.
6. Consider the Time taken to fill the Vacancy for Skilled Positions
Ultimately, any budget for the recruitment and selection process ultimately relies on available time and resources. So, it is very important to know how long it takes to fill a vacancy for a skilled position. If your potential employees need certain skills, flexible environments or training to work efficiently then these are also crucial things to consider.
7. Determine all Discretionary and Unforeseen Expenses
The harsh reality of any recruitment budget plan is that you’ll always miss out on one or two things like the costs associated with candidate screening tests or incentives and bonuses associated with employee referral programs. Other unexpected expenses that can crop up; may include urgent software updates, temporary staffing to cover unplanned leaves, a careers page redesign to attract more candidates, relocation expenses for new hires, or airfare for flying candidates for interviews.
There are plenty of times when recruiters tend to underestimate the money needed for executing certain recruitment strategies. So, it’s always recommended to leave some buffer to cushion the impact of last-minute expenses.
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