Recruitment is not an easy task and it’s certainly not free. In most companies from all around the world, recruitment costs form a major chunk of the total operational costs. In the current situation, in the middle of a pandemic, companies have different recruitment needs. So, accommodating all the recruitment requirements in a compact budget can be a daunting task. It can cost you a fortune if your hiring budget is not managed properly. So, to ease out the process and help you, here are 5 steps to manage your recruitment budget effectively.

What Is A Recruitment Budget?

To put it simply, a recruitment budget is a comprehensive estimate of your overall annual expenses of hiring in your organization. It involves all the fixed costs like technology expenses, recruiter’s salary, etc. Also, it involves all the variable costs like job ad posting, marketing campaigns, marketing, etc. An ideal recruitment budget should also accommodate expenses for unplanned situations like an employee leaving. In a nutshell, your recruitment budget should align with your organization’s needs. It should be able to accommodate all the staff requirements while keeping a check on over expenditure.

Importance Of A Recruitment Budget

Recruiting top talents is one of the most important investments a company makes. According to an SHRM survey, the average cost per hire for companies is $4,129. However, tracking and managing the recruitment budget can be downright daunting, even for the most experienced HR people. You can have all the recruitment strategies sorted out but without a well-built budget, you can end up worrying about where did all your money and efforts go.

There are a number of gauging factors at play while planning a recruitment budget. Especially in the current situation, amidst so many uncertainties cutting down on recruitment budgets while ensuring hiring the top talent is the top priority of companies. In a recent LinkedIn Future of Recruitment survey, 47% of recruitment professionals believe that there will be a cut in their company’s recruitment budget in the coming year.

5 Steps To Manage Your Recruitment Budget

1. Review Your Past Cost Of Recruitment

It is always great to have a reference for doing anything. So, before you start planning and estimating the recruitment budget for the current year, it is important to analyze the last year’s budget and its corresponding results.

Doing this will help you get a clear picture of the breakdown of the expenses. You can easily analyze the expenses for all the fixed and variable aspects. Comparing the past results and investing in what worked will definitely help you build a great recruitment budget.

2. Estimate The Cost-Per-Hire And The Number Of Hires

The most important expense for any company is its employees. Cost-per-hire is the most important metric when it comes to managing the recruitment budget. So, the first step towards creating an economical budget is to estimate the total number of hires your company will be required in the new future for all the departments involved.

After that, you need to calculate the cost-per-hire in every department. Additionally, you also need to identify which roles are more hard-to-fill than others as they may cost more. You can take all the time you need but it is very essential to go through this step precisely and with complete focus.

3. Calculate The Recruitment Marketing Cost

Sourcing is the most crucial step in the process of recruitment. To ensure you get your hands on the best talents out there, you need to have good access and reach the best talent pools. To do this, you need a great marketing strategy that will help you enhance the visibility of your job adverts and target the most relevant audience.

So, recruitment marketing is a very essential aspect that recruiters need to invest in. You need to analyze all the basic costs related to recruitment marketing. They generally include costs of external agencies, paid social media campaigns, online job listings, job boards, etc.

4. Estimate The Technology Costs

There is nothing in the professional world that technology hasn’t touched and optimized. Over the last few years, technology has played a major role in the revolution of the recruitment industry. Technology has proved to be the best friend for recruiters who have gracefully embraced them.

There are a number of recruiting tools, from Applicant Tracking Systems, to complete Recruitment Software that has automated and optimized the process of recruitment for recruiters. So, make a list of all the tools that you need, compare the options available in the market, and choose the best tools which suit your needs and budget.

5. Factor In Unforeseen Expenses

We have covered all the basic steps that you need to create a recruitment budget that works However, the harsh reality is that even after planning everything, emergencies may happen. As the saying goes, even the best-laid plans often go awry. You may come across some unforeseen expenses, the sudden requirement of change in strategy, or an unexpected loss of staff.

So, to overcome any unexpected situations, recruiters must keep a buffer in their budgets. This will help them cover any unplanned costs. Also, on the bright side, having a buffer into their budgets can also help them to take advantage of any spontaneous opportunity that comes along. Planning for a change is very important while managing a recruitment budget.