The recruitment budget is the estimated hiring cost that will be spent during hiring in the entire year. The recruitment budget should be carefully planned to keep the company’s hiring requirements and overall recruitment plans. It includes everything from direct expenditure on the channels such as job boards and staffing to other unplanned recruiting costs during the process. The recruitment budget should align with the company’s goals.
Who is in charge of the Recruitment Budget
The department of human resources is generally responsible for preparing the recruitment budget. A defined amount of money is allocated to all the hiring manager who keeps track of all the expenses to maintain a record and approval. When a company does not have an HR department, the recruiting costs are tracked by the Finance or Accounting department.
How is a Recruitment Budget Prepared
With the world recovering from the covid19 pandemic, there has been an increase in the hiring numbers, which directly increased the recruitment budget. Therefore, it is essential to create and manage the recruitment and selection process budget. Preparing a recruitment budget helps determine the amount spent on advertising, background checks, assessments, etc. Some of the factors that should be kept in mind while preparing a recruitment budget are:
- How many hires do you plan to hire?
- What should be the experience level of the hires?
- What are some of the platforms you want to post your job advertisement on?
What are some of the skill-based assessments you want your employees to take?
Identify your annual recruiting plan for new employees
Have an estimated number of hires you want to make the following year. This will have a considerable impact on the recruiting budget. To get an estimated number, it is advisable to check the requirements in the company’s different departments. A strategic recruitment plan should include positions that need hiring, a recruitment calendar, budget details, and others. An estimated recruitment cost can be defined for the next year based on past costs per hire.
Categorize your Expenses
Categorizing the expenditure is essential to know how much will be spent in the different hiring processes. Some of the expense categories are:
- Advertising on job boards and social media includes any expense associated with posting the job position on different job boards like Naukri, LinkedIn, etc.
- Assessment: It includes any amount spent by the company on the candidate assessment.
- External recruiting includes the amounts spent on recruitment agencies or software for hiring candidates.
- Employer branding events: Career fairs, conferences, and workshops are employer branding events that require a certain amount to be spent.
- Careers page: Development and maintenance of the careers page.
The salary cost of the hiring team: This includes the salary of the hiring team. This cost is generally high.
Technology Cost Budget for Recruitment
The technology cost budget for recruitment generally discusses the amount spent hiring candidates using applicant tracking systems or other software. An annual budget should be spent on the ATS as these ease-out hiring candidates. They can also save the overall cost of hiring by saving time and manual labor and speeding up the recruitment and onboarding process.
Role of Diversity and Inclusion in Recruitment
Diversity and inclusion are important factors for financial and employee performance. It impacts the company’s information security, recruiting efforts, and overall reputation. Inclusive recruitment creates a diverse workforce which increases the recruitment pools, a broader range of skills in the workforce, and language and cultural awareness within the organization. It eliminates any biases in the workplace.
Make use of Spreadsheets
To keep track of the expenses, spreadsheets can be used as a recruitment budget template. Spreadsheets help in record keeping, which everyone can access and can be accessed whenever required. It includes the most common expense categories and support calculations monthly and helps determine the overall costs and timelines for recruiting efforts. Adding rows and columns in the spreadsheet can help calculate the budget of the recruitment process and how much of the overall budget had been spent on each category.
Account for Employee Referral Incentives
Employee referral incentives are one of the major driving forces of hire, and therefore, investing in employee referral programs is highly beneficial. This can either be done in monetary rewards for the employees referring qualified candidates to the company or in perks. This should also be included in the budget for recruitment and can be calculated based on the number of referrals recruited in the previous years.
Get it Approved by the Leadership
It is essential to prepare a budget that one can easily defend and showcase before the teammates for their approval. The budget should clearly state the mission, details of projected spending, and the ROI. You will have to show high-quality hires and how this budget will contribute to its corporate revenue to get it approved. The potential return on investment will gain the required approval.
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Frequently Asked Questions(FAQ)
A recruitment budget is a financial document that companies, and specifically human resource departments, create to help them track and manage the money they spend on recruitment.
Many individual costs are incurred during the hiring process, including advertising costs, in-house recruiters’ salaries, third-party recruiter fees, travel expenses, sign-on bonuses, and employee referral bonuses.