If one thing never changes, it’s the need to recruit and onboard new talent. As such, it’s important to prepare your recruiting budget early. Typically Q4 and Q1 are the perfect time to make and align your recruitment budget with the demands of the coming year. Otherwise, you will find yourself going into the year unprepared and struggling to keep up with your organization’s demand for talent.
So what does making a recruitment budget entail?
1. Find Your Cost-Per-Hire
One of the most important metrics to consider when deciding on your recruiting budget is the cost-per-hire.
Calculating this metric allows you to understand where your budget is going and the true expense of your recruiting process and identify where you are finding the best candidates. Consequently, understanding your cost-per-hire helps you decide where to invest in your final budget and where to trim existing costs.
According to Zippia, the national average for the cost-per-hire is approximately $4,000 — as the average time-to-hire equates to 42 days with a cost of $98 a day.
2. Note the Cost of Hiring Tools
Adjacent to your cost-per-hire is tracking the cost of your hiring tools. Failing to track this information can easily lead to your recruitment budget rising disproportionately. Hiring tool costs include any ATS or CRM systems that you employ to help manage the hiring process. As these tools often prove invaluable to the hiring process, ensuring your budget is large enough to accommodate them is essential. Look for hiring tools that give you the most bang for your buck, especially when it comes to cutting down on your labor costs.
3. Estimate Your Marketing Budget
Every recruiter knows that marketing is essential to any successful hiring process. Ads, platforms, job fairs, and more all go towards this marketing budget. According to the 2022 Rally recruitment Marketing Job & Salary Survey, the median recruitment marketing budget across all categories was $718,400. That is certainly no small cost.
That is why you must understand the importance of nailing your marketing budget and understanding what avenues produce the highest ROI. Work backward based on your hiring goals to best estimate your upcoming recruitment marketing budget. Determine how many applications it typically takes to make a single hire, and from there, estimate the cost of your combined sourcing strategies relative to the number of applicants they bring in.
4. Establish the Number of Hires
Compare your budget, cost-per-hire, and the price of your hiring tools with the number of hires you hope to bring in for the year. This will allow you to project the necessary hiring budget.
However, before this is possible, you will need to determine the number of hires you will need in the coming year — a task that is easier said than done. Determining the number of projected hires will require team collaboration between hiring managers, executives, and even, at times, product teams.
If you find yourself wishing to save on your cost-per-hire, consider Qualifi. Qualifi’s on-demand phone interview platform allows recruiters to drastically cut down on the most time-consuming tasks in the hiring process and reduce time-to-hire. See a demo today.