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A Formula for Setting the Right Recruitment Budget

formula-recruitment-budget

A Formula for Setting the Right Recruitment Budget

The best recruitment budget for your business is the best recruitment budget for your business.

In other words, don’t just run with a cookie-cutter budget. Set a budget that offers flexibility, is based on performance data and continues to reflect your company’s goals, no matter how often they may change. If nearly a full year of pandemic-induced havoc has taught nothing else, the lesson learned has been the vital necessity of pivoting – whether it’s the way you work or the way you live – in order to keep on keeping on.

Avoid locking into anything long term.

As you set the framework for your ongoing recruitment budget, your formula should be based on how many jobs you need to fill, how many applications you want for each, and your cost per application.

  • For instance, if your cost amounts to $75 per hire and you will have 100 orders per month, that equates to a monthly spend of $7,500. But what if you succeed in lowering that cost per hire to only $60? You don’t want to be stuck in a long-term commitment that limits your options.

Make every decision performance-based.

Flexibility allows you to make more informed decisions based on platform performance. For example, if one job board is consistently providing great results and another is falling short, it’s a no-brainer: You want to focus your spend on the former. But this isn’t an option if you’re stuck in a 12-month contract. You want the flexibility to move your money to where the better candidates are finding your job.

  • This flexibility also helps if your needs vary seasonally; for example, you have a client who needs to staff up for the summer or a holiday rush.

A Few More Tips

According to the Society for Human Resource Management’s (SHRM) Customized Talent Acquisition Benchmarking Report, the average cost of hiring a new employee is $4,425 – and this figure can soar as high as more than $14,000 for executive-level recruitment. Here are a few more tips for setting the recruitment budget that helps guarantee you the greatest ROI:

  • Define your annual plan for new hires before breaking down your estimated expenditures. As you do so, keep an eye on historic, fixed costs while keeping in mind you may need to “punt” if things change.
  • Don’t forget to include the costs of software, automation, and other technology.
  • Have an airtight method for tracking all related time and expenses.
  • Provide robust training and transparent communication as you get your staff and executive leadership on board.

Recruitment budgeting can be a lot to wrap your arms around. To help decipher it all, contact Haley Marketing today. Check out our Smart Recruiting Guide, for 190 ideas on how to make your recruiting smarter and faster!

 

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