Learning how to prepare a recruitment budget can feel complicated. It seems it should be as easy as knowing how much you have available to pay new hires. But there are more costs involved including advertising, background checks, assessments, and more.
As the world recovers from the impact of COVID-19, budgeting is becoming even more difficult. According to Monster, 82% of employers are planning to hire new employees in 2021. Many of these companies are adding new positions and replacing employees who were let go during the pandemic. The result is that HR professionals are as busy as ever — and their budgets are strained because of it.
Today, we review some of the costs that are often associated with recruiting as you figure out how to prepare a recruitment budget. We will also look at how tools like eSkill’s Talent Assessment PlatformTM can help you to stretch your budget even further, bringing you the greatest return on investment.
Start with a Plan
As with any other budget, your recruiting budget should start with a good understanding of your overall company plan. There are factors you need to consider, and without knowing the answers to these questions, there is no way you can realistically plan for the coming year:
While the answer to these questions will almost certainly change throughout the budget year, they are the basic building blocks for knowing how to prepare a recruitment budget. By establishing these benchmarks first and foremost, you give yourself a solid starting point.
Consider All Aspects of Your Spending
Once you have a sense of the scope of your company’s hiring plan, then you can tailor your recruitment efforts to ensure you can find and recruit the candidates you need to fill those positions.
Recruitment costs are rarely the same from one company to the next, as you will see when you compare recruitment budget examples.
Here are some common expenses you will need to account for:
Advertisement Costs
It is essential to ensure you get your job posts in front of the candidates for open positions. Determine the costs of posting to job sites, especially industry-specific sites that draw in skilled specialists.
Networking and Recruiting Events
These events are essential for building relationships with potential new hires from national conventions to graduate hiring fairs.
Background Checks
Background checks are meant to protect you from liability or placing someone who has a history of misconduct.
Talent Assessment
An important item to add to your recruiting budget is skills testing and assessment. eSkill’s testing platform can bring you significant value and maximize your budget more than any other outlay.
By adding skills tests like Financial Analysis or Basic Computer Skills to your company’s HR budget, you can save up to 70% on the cost of hiring while also cutting time-to-hire by up to 60%.
Look at Your Fixed Costs
Fixed costs do not change, even if your company’s performance may vary. Items like existing salaries, benefits and rental costs are fixed costs. You can assume they will remain stable over the financial year.
This is also a good opportunity to look at those numbers. If you decide that they are too high, do not waste time — start looking for alternatives.
Be Flexible with Your Budget
All of the planning in the world will not make a difference if you hold too rigidly to your budget. Things will inevitably change, and you will need to adapt. According to the Society for Human Resources Management (SHRM), the average turnover is 19%. However, during the pandemic, turnover rates went much higher. The most successful companies were those that prepared to adapt to those realities.
eSkill’s Testing Saves You Money
No matter what kind of recruitment budget example you are working from, skills testing can make your hiring process faster and cheaper. By eliminating candidates who do not offer the required skills, you will not have to waste time going over unsuitable applications, which can save you time and money. You are also more likely to find a candidate with a good Job Fit — the most suitable person for the role.
Are you interested in Adding eSkill’s Testing Platform to Your HR Recruitment Budget?
Find out how eSkill can help you get the most out of every recruitment dollar. Request a demo today.