Today’s Human Capital Market is worth $21 billion or more. Moreover, it will continue to grow at an 8% to 10% compound annual growth rate (CAGR). Thousands of suppliers are trying to meet the needs of buyers in this growing industry. With a wide range of solutions, they are vying for a share of their potential customers’ wallets.
To help make sense of this dynamic environment, the newly formed HR Marketing Institute has initiated one of its first pieces of research: The State of Marketing in the HR Industry: Leverage the Viewpoints of Suppliers to Boost Success Rates.
One of the questions we asked is “What Do HR Marketing Budgets Look Like?”
We looked at two related metrics in regard to marketing budgets:
- total marketing budget
- marketing budgets as a percent of total revenue
Finding 1: Most organizations spend less than $250,000 annually on marketing
Most respondents spend $250,000 or less on marketing, with only 22% spending more than a million dollars. As expected, this metric is influenced by company size. Half of respondents from larger organizations (250 employees or more) spend $1 million or more on marketing, whereas only 10% of smaller organizations (less than 250 employees) do.
Approximately what is your total marketing budget for your current fiscal year (both internal and external costs)?
Finding 2: Marketing budgets as a percent of total revenue point to “frugality”
As a way of gauging the relative size of marketing budgets, the numbers derived from marketing spend as a percent of revenue are more meaningful. Benchmark data across industries show that typical spending across all industries tends to be in the range of 6%-7% of total revenue. However, only 28% of our sample are spending more than 6% while 47% of respondents spend 5% or less. Larger organizations spend, on average, slightly less on marketing as a percent of revenue because of economies of scale.
Note that one in four respondents did not know their organization’s marketing spend as a percent of revenue. This lack of knowledge about a basic marketing metric is disappointing, at best.
What is your total marketing budget for the current fiscal year as a percent of your organization’s total revenue?
What does this mean for the HR solution provider?
To find out download the full HR Marketing Institute research report. To access the complete research report, you must be a member of the HR Marketing Institute. HR Marketing Institute (HRMI) is the ONLY community of marketing professionals specifically in the rapidly growing HR marketplace that is here to support your marketing needs and professional growth.
