When finalizing hiring goals, it's essential to consider factors like turnover, competitive job markets, and rising talent competition when building the budget.
A holistic planning approach helps companies finalize their recruitment budgets and allocate resources more efficiently, ultimately leading to a stronger recruitment return on investment (ROI).
Utilize recruitment analytics to make informed decisions about where and when to invest budget dollars, tracking metrics beyond just cost-per-hire.
Organizations invest a great deal of time, energy, and money into attracting and hiring high-quality talent. Given the size of this investment, it’s critical to establish a reliable recruitment budget that helps talent acquisition teams meet hiring targets. A well-thought-out budget on an omnichannel approach not only guides recruitment activities throughout the year; it also allows organizations to use their dollars wisely and most efficiently.
Whether an organization hires dozens, hundreds, or thousands of employees every year, a well-managed recruitment budget is a must-have. Given the cost of hiring, organizations can’t afford not to establish and follow their recruitment budget. According to SHRM benchmarking data, the average cost to hire an employee is $4,683. The figure increases to an average of more than $28,000 for executive-level hires.
Organizations wanting to make the most of their recruitment dollars will benefit from taking a proactive approach to budgeting and beginning the planning process months before the fiscal year begins. By applying strategies that create efficiencies, limit waste, and enable continuous improvement, it’s possible to operate a highly productive recruitment program that delivers consistent ROI throughout the year.
7 Steps to an Effective Recruitment Budget
In a 2023 LinkedIn survey, more than half (53%) of talent acquisition professionals said their recruitment budget would decrease or stay flat in the coming year. Whether organizations anticipate a higher or lower budget than the previous year, they can benefit from applying the following strategies when forming their next annual recruitment budget:
1. Confirm Hiring Goals
Finalizing hiring goals for the coming year is a no-brainer when building a recruitment budget. But this planning step requires more than simply knowing the anticipated number of hires for the year. It also requires taking into account other factors that can increase recruiting costs, such as turnover, challenging job markets, and rising competition for talent. For example, a retail operation opening a store in a new location may initially budget for 75 new hires. However, once it becomes clear that a competing store is also opening a new location nearby, the talent acquisition team may need to increase the budget to allow for more targeted job advertising in that area to hit the hiring goal.
When forecasting hiring plans for the upcoming year, organizations should also consider other costs that could take a bite out of the budget. Some may be recurring costs, but others may be new or one-off expenses. In addition to budgeting for advertising and job posting costs, recruitment teams should also include costs associated with the following:
Additional recruiters to support a seasonal hiring push
Employer branding and recruitment events
Background checks and pre-employment assessments
Recruitment technology upgrades
2. Reassess Branding and Messaging
Employer branding ultimately helps organizations build a reputation that attracts more quality candidates. But it can also be a powerful lever for managing recruitment costs and staying on budget. According to LinkedIn research, a strong employer brand can result in a 50% reduction in the cost-per-hire.
Getting recruitment messaging right certainly involves an upfront investment, especially if a career site redesign or job description refresh is in the mix. But over time, as candidate awareness grows and applicants become more familiar with the organization’s employee value proposition (EVP), this investment begins to pay for itself in the form of positive Glassdoor reviews, more clicks on job ads, higher career site traffic, and ultimately, higher applicant conversions.
3. Use Programmatic Job Advertising to Manage Recruitment Spend
One of the best ways to maximize recruitment dollars and stay on budget is with recruitment marketing tools that provide flexibility in where and how often job ads appear to prospective applicants. Programmatic job advertising is an excellent solution for achieving this goal because it automatically promotes open positions on the job sites and platforms where potential candidates are already looking.
Using algorithms and machine learning, programmatic advertising lets organizations adjust advertisement spending in alignment with hiring progress in specific areas. The advantage of programmatic advertising lies in its flexibility. This allows recruitment professionals to pause or shift budgets as required. With programmatic, budgets can easily be redirected towards departments with increased hiring needs or returned to the organization's overall bottom line.
Tip: The pace and complexity of high-volume hiring can send recruiting budgets soaring. Recruitics’ Automated Marketing Platform (AMP) helps employers tackle seasonal and high-volume hiring with programmatic algorithms that automatically execute and monitor media campaigns in hundreds of markets at once.
4. Leverage Artificial Intelligence (AI) to Streamline Tasks
Busy talent acquisition teams have several balls in the air at any time. They’re refining job ads, exploring new markets, and engaging passive candidates, not to mention keeping existing applicants moving through the interview and hiring process. All these activities require an investment of time and, often, money. However, with the help of AI, organizations can invest recruitment dollars more efficiently and help recruiters get more done in less time.
AI helps organizations save time and money by initiating and managing many of the core activities recruiters perform every day. For example, the Fusion solution by Recruitics harnesses the power of AI to perform the following actions for talent acquisition teams:
Building candidate awareness
Keeping applicants engaged as they move through the candidate journey
Automatically reporting on pipeline engagement and conversions
5. Work With an Agency to Optimize Strategies
As recruiting markets and candidate behaviors change seemingly overnight, organizations must pivot recruiting strategies to avoid blowing through their recruitment budget too early in the year. But with so many variables to keep track of – job ad performance, career site traffic, social media activity, and others – recruitment teams can quickly become overwhelmed.
By working with a recruitment marketing agency, organizations and hiring teams get the added support of a partner who understands hiring markets and how to tease out even the most passive or hard-to-find candidates. A great agency helps organizations develop and execute a recruitment strategy that achieves results, on time and on budget. Areas of support include:
Applying data-driven omnichannel recruitment strategies that build awareness and conversions
Providing real-time analytics that illustrate healthy cost-per-hire and cost-per-applicant metrics
6. Finesse the Tech Stack to Bring it All Together
From the applicant tracking system (ATS) to integrations and add-ons, an organization’s recruitment technology infrastructure can be complex and challenging to manage. As a result, platforms that were once the source of efficiency can become a drain on the recruitment budget.
In the past, the ATS was the sole technology many organizations used to track recruiting performance. Now, AI and advanced analytics work in concert with the ATS to help organizations fill more positions at a faster pace. To build and maintain efficiency, organizations should evaluate their tech stack, consider ways to make integrations even more seamless, and consider how an all-in-one recruitment technology solution may be a more cost-effective alternative to their existing setup.
7. Track the Right Metrics
In many ways, data holds the key to helping organizations understand recruitment spending. With smart recruitment analytics, talent acquisition teams can access and interpret recruitment data to make better decisions about where and when to invest budget dollars. For example, recruitment analytics can identify which media channels are most cost-effective and which job posting versions yield the most applicant clicks.
Using analytics to identify waste and improve recruitment ROI involves more than monitoring the monthly cost-per-hire. It also requires tracking metrics such as:
Cost-per-click: Costs paid to advertising partners for each job ad click
Cost-per-quality: Recruitment spend per qualified applicant
Total overall spend: How much the organization spends on recruitment, compared across geographies, job types, and time periods
Organizations can also bring metrics alive with visualizations that illustrate marketing campaign performance, candidate engagement, and data from integrated recruitment platforms. As a result, recruitment teams gain more visibility into which recruitment strategies are working, which deliver the most ROI, and which may be using up an outsized portion of the recruitment budget.
Build a Better Recruitment Budget
No matter the size of an organization’s recruitment budget, the goal is always to use resources most efficiently. Organizations can achieve this goal by starting the planning process early and incorporating modern solutions for assessing, improving, and tracking recruitment program performance.
For help utilizing budget resources most effectively, the team at Recruitics is here to help! The Recruitics team can provide strategic support and customized recruitment marketing solutions to help organizations achieve a stronger recruitment ROI and smarter allocation of budget dollars.