What Are the Costs to Consider While Planning A Recruitment Budget?

Like other countries, the unemployment rate in the US jumped to a record high of 14.70% in April 2020.

However, as businesses opened up and started to hire, the rate has improved to 8.4% now.

If your organization is on a hiring spree too, one of the key things to consider is the recruitment budget. It’s advisable to plan the budget properly to prevent overspending, especially in such critical times. It can also help you create a robust hiring strategy, attract the right candidates, and retain them for the long term.

While planning the recruitment budget, it’s better to have a concrete idea about the costs in each step of the hiring process. If you’re confused or feel somewhat overwhelmed, the following elements can help get a clear picture of the same.

Calculate the CPH (Cost Per Hire)
Before getting down to the details of the hiring costs, you should calculate your CPH from the previous year’s references. Divide the total amount spent by your company in hiring with the number of hires in the year to get the CPH value. While this value may keep on changing based on circumstances, job market trends, and the financial status of the organization, it will give you an idea to create the budget properly.

Once you have the CPH value, you can go ahead with listing the potential costs for your recruitment budget. Scroll on!

Online job listing
You may have to post the job ad on a renowned job portal. Before subscribing to any such platform, do thorough research on its visibility and traffic to ensure a wider reach. Analyze the price models of different portals and see which package suits your recruitment strategy the best. While posting the ad on an online portal, you may need to check the probable duration of its visibility as well.

Read: Tips to Write Job Descriptions That Will Attract the Best Candidates

Hiring Events
Many organizations arrange for recruitment events and job fairs during the hiring season to enhance their brand visibility and get maximum candidates within a short duration. This year, it may not be possible to organize such large-scale events. But virtual job fairs are already hot in the market. Industry biggies, like Amazon and Erie Shores Healthcare, are some of the names actively following this trend. Not only do they cut down costs of real-time events but also enhance your branding efforts amidst the pandemic. It’s recommended to keep some resources aside for the same.

Recruitment technologies
The entire recruiting process is now tech-dependent, giving way to video interviews, technical assessment of candidates, pre-boarding consultation, and so on. You should include the costs of such technological integration in your recruitment budget to prevent unnecessary surprises. You may also need to invest in some high-quality paid software to enhance the remote interview experience and also for application tracking. It’s recommended to analyze your specific requirements and plan your budget accordingly.

Internal salaries and incentives
Offering incentives to the in-house hiring managers can motivate them to plan a robust hiring process. They will be keener to meet their deadlines if you can assure monetary incentives per quality hire. Further, such actions also increase the retention rate of your employees, who will encourage more people to join the organization. Emphasizing the quality of hires will prevent turning the recruitment process into a number game.

Interview expenses
The interviews occupy a large portion of your recruitment budget and rightly so. From travel expenses for out-of-town candidates to paying external hiring managers, the costs will depend on your specific needs. However, in the current situation, it isn’t feasible to hold multiple screening sessions for each candidate in real-time. You may have to conduct the initial screenings online and call the selected candidate for a final, face-to-face round later. So, the interviews will probably cost less than they were in previous years. You can plan your budget accordingly.

Partnership costs
If you consider tying up with external staffing agencies, that will take some costs as well. But it will speed up the recruiting process and give you a helping hand to hire maximum employees within a short time. As most of the candidate-screening processes will be conducted by the agency, your company can focus on other aspects of the recruitment process.

Training and mentoring costs
Onboarding selected employees doesn’t mark the end of the hiring process. Whether you’re hiring freshers or experienced candidates, you may need to train them according to the job requisites. The costs of hiring qualified professionals as mentors or organizing group-training sessions should thus be included in the recruitment budget as well.

Wrapping it up
As the unemployment rate keeps falling with each passing day, you may need to hurry up and create the budget to start with your hiring activities. Having the budget plan can solve at least half of your problems by keeping financial issues at bay. Then you can plan your recruitment session based on your requirements, budget plan, and market trends.