Annual Budget Planning for TA Professionals

Annual Budget Planning for TA Professionals

Starting in October, companies will begin their annual budget planning. We recently sat down with Dennis Tupper, a Director of Client Strategy to discuss the importance of budget planning and what that means in the talent acquisition space.

Here are his thoughts on what annual budget planning is, expert tips on what to consider when planning your budget, the metrics to look out for, and more.


Q: Why is it important for companies to conduct annual budget planning?

A: For your next fiscal year, you must know exactly what your hiring needs are and how you are going to achieve them, which costs money. In order to prepare and receive the budget you need to hit the hiring goals, you must present leadership with a business plan and show the ROI of your proposed spend. What the business plan must include -- especially with recruitment marketing -- is performance data. You need to have analytics, and you need to present and show its impact to your organization in a very material way. What will the # of hires per department or division be on the investment you are requesting? What budget do you as a recruitment marketer need in order to hit them? You have to plan today for your hiring needs in the future.

If you don't fund things appropriately, you're not going to hit your hiring goals because you shouldn’t cut corners when it comes to cost. That is a lose-lose predicament your organization doesn’t want to be in -- when competition for hiring has never been more competitive.


Q: When should companies typically start annual budget planning?

A: When you have three quarters worth of data. Let’s assume your fiscal budget is on a calendar year basis. October is typically when to start planning for the following year’s budget because you have 75% of the year’s data, which is a good sample size of proven performance to write your story and create your model. Run your campaign reports, put the data together, and analyze it. It’s important to come up with what your new year hiring needs are in November and marry that with the performance data that you have to start building out your model and budget.

Planning ahead allows enough time for every stakeholder to ask questions about your model, collaborate, and move forward towards requesting a budget from your approving stakeholders (Finance, Marketing, Operations -- depending on how your organization works). When you work collaboratively, the entire team is accountable to the plan.

Once you receive approval, you can then go forward with your plan, negotiate your contracts, and get signatures in the beginning of December. When January 1st comes around, you can just press play and watch your entire strategy go into motion -- without any delays or any hiccups or running the risk of your ads/campaigns going dark to start the new year.

Also, these budgets can adjust based on business demand. For example, if something comes up where a company has more hires than forecasted, all you have to do is refer back to the equation and plug in the new figures to determine how much more money it’s going to cost to fund it. This is where modeling is key and can be used throughout the year.

It could also be the adverse where it diminishes and you're finding a location that requires less hiring than forecasted. The beauty of programmatic-based advertising is you don't sign a contract and spend that money for the year -- you can just stop and pause that spend here. With programmatic, if you want to, you can shift that budget over to the one that has increased hiring needs, or just take that back to the bottom line for the organization as a whole. Your budget can adjust based on business needs throughout the year.


Q: What should TA professionals consider when planning their budget?

A: For TA professionals, it comes down to the number of hires per department, skill set, geography, and even job titles -- as these can vary quite a bit.

For example, the cost of attracting and hiring somebody who works in a warehouse versus the cost of attracting and hiring an emergency room nurse are going to be different. Also, consider finding an ER nurse in Manhattan versus in rural Nebraska are going to be much different when it comes to cost-per-click (CPC) bidding, cost-per-applicant (CPA) and cost-per-hire (CPH) results. The more rural, the more expensive the CPH is going to get because there's less people -- and the more you have to bid for the less amount of clicks. 

This is why it’s important to find out, departmentally, your number of hires and where they are, and have answers for the following KPI’s:

  • How many hires do you need per role?
  • What is your applicant to hire ratio? 
  • What is your conversion rate for that specific role? 
  • What is the amount of clicks you need?


Q: What are the first steps needed when planning your annual budget?

A: First, find out who your stakeholders are and determine what their hiring needs are. Pull your data and look to find out what the ratios are like. Build your model, then involve those who hold budget approval.


Q: What metrics should be considered in annual budget planning?

A: For recruitment marketers, part of your pre-work is to come up with the numbers that you need to then present it for budget -- include in the model spend per market based on spend per channel to hit your candidate acquisition goals. The KPI’s listed above are crucial to make sure your model is accurate.

Also, an important category of planned spend is a ‘pilot’ budget because you always want to be testing. This helps you to know what's working for your campaigns and what's not. This also helps when looking to diversify what you're doing, for example, in case there's a problem with one vendor and you need to pivot quickly to another to acquire applicants and avert risk of a dip in applications.

If the testing works, scale to the point just shy of diminishing returns for that vendor partner. When you do so, congratulations -- you’re testing, diversifying, and scaling. Your stakeholders will be happy when you show them that you are trying new things so you can do whatever it takes to hit their goals. The mantra here is ABT -- always be testing.

Other important expenses to consider are technology, brand, EVP, and resume sourcing seats. The spend for the technology that you use (ATS and career sites for some companies), or agency partnerships where applicable. There are costs of doing business which can get spread to your department and you must be aware of those as well to account for everything you may be line-itemed with.


Q: Is there anything that would be in the budget one year, but not in the next?

A: Brand and EVP. If you're newer to the market (or maybe you had an acquisition, or it's super competitive in regards to the amount of competition you have for talent), one year you might have a budget for EVP. This helps show talent why they should work for you. Create messaging letting them know the reasons why your brand should be their employer brand-of-choice. This takes research, focus, and a lot of strategy and planning (but less to your organization if you outsource it).

Over time, you will receive more reviews, clicks, more career site traffic, job visits, higher conversion -- because people are more aware of you and your brand. When it comes time for the budget planning the following year, you shift that part of the budget away from brand marketing and put those dollars into acquisition marketing which will result in more hires.


Q: Who should be consulted in the budget planning? 

A: First, your stakeholders who are doing the hiring -- they're the ones who give you the number of hires. Then, you or your team pulls the campaign reporting, providing channel analysis, and creating the equations based on your performance data married with the hiring objectives -- using your KPI’s.

Make sure every single stakeholder sees your recommendations and has their chance to ask questions. Being collaborative allows you to move forward together with confidence as a team. To do this, it needs to be calculated -- everyone needs to be in agreement, and your story needs to be tight by using data.


Q: Should companies outsource, or can planning be done in house?

A: For planning, you need to be able to understand the data points. Whoever is working on the annual budget needs to be able to track everything and have the ability to interpret it and have the experience with different companies within your industry for comparison.

If you outsource, you can have a significantly higher impact due to the sheer amount of experience an agency has with much bigger data points to help make business cases and industry expertise that internal stakeholders alone don’t normally have the breadth of.


Q: What are common mistakes companies make when trying to plan their budget?

A: One common mistake I’ve seen is when companies go with what they THINK they know versus going with what they actually know.

Some companies spend the money by feeling and not by fact, and this is where they can really stumble the most -- because you shouldn’t make business decisions because you “sort of know something.” You must know the data and the source of truth when it comes to your budget and present your case as fact, not opinion. Let your budget model tell this story through numbers and equations, then make decisions.


Q: What advice would you give to recruitment marketing teams when trying to plan their budget?

A: Get ahead of things timeline-wise. Be collaborative, be precise, and back EVERYTHING with data. Goal-setting metrics are huge -- you need to come up with a model and financial plan on how to achieve them. What are you trying to do? What has been successful? What channels do you plan to use (paid search, job boards, paid social, email marketing et al)? How much budget and for what markets?

You need to make sure that you understand what every metric is that you're using, and have the data to understand every part of that equation so you know front to back what your data is, what your facts are, and what your equations are. Data is powerful, use it to tell your story and instill confidence in your organization that the recruitment marketing budget you are requesting is the exact budget your company needs to hit their hiring goals.

Also, always have a holistic view and track everything -- build that story with data and champion your efforts. It’s then you will get the budget approved to hit your hiring goals, move your organization forward, and stay ahead of your competition.



Is your company looking for advice on your recruitment strategy for the new year? We'd love to help!

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