The key to success is strategy, but before you create a strategy, you need a plan. Creating a comprehensive budget should be top of mind as you go into the new year. A comprehensive recruitment budget will drive your recruitment processes for the year. Plan your budget by calculating costs and projecting your potential needs.
The Importance of Budget Planning for Recruitment:

• 82% of businesses that fail do so because of cash flow problems.
• Despite 80% of HR leaders stating they value employer branding, just 8% of recruiting budget invest in this area.
• Most recruiting expenses are on channels such as job boards (30%) and staffing agencies (22%).
• 56% of recruiters state that hiring volume is increasing - making your budgeting plan and strategy all the more important.

Determining Hiring Budget
First, focus on the cost that hiring could attribute to your company. That is - personnel cost. This is defined as the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done by the latter during the reference period. First estimate the number of hires you plan to make in the coming year. Talk to hiring managers to estimate your potential hiring needs and hold meetings to discuss what they’ve spent on hiring in the past and what their needs will be in the future. These meetings are a great time go over proactive recruitment needs like skills gaps, succession planning (even anecdotal) and product roadmaps and projected sales. All these numbers can give you insight into how many people you’ll be responsible to bring on board (and how much you’ll need to budget for tools and processes).

If you have recruitment metrics like time to hire or a recruitment funnel that tracks the costs depending on stage of hire (from source of hire through to the offer stage) plug these into a chart as well. They’ll help you understand what you might need to meet the hiring goals your hiring managers and team leaders are laying out.

Questions to ask during your planning meetings:
- How many people did you hire last year?
- How many do you plan on hiring this year?
- Is anyone on your team nearing retirement or planning on leaving?
- Will you need to expand your team this year?
- Did you have unexpected turnover this year?
- Did you promote this year?
- Did you let anyone go this year?
- Did you meet your productivity goals this year?

Once you have your planning completed, create an equation for the number of new employees you’ll need. If you have 5,000 people and estimate hiring at least 300 more, you need 5,300 employees by year’s end. If your turnover sits at 8%, you’ll have to add 400 to your equation to replace lost employees, making your total number of hire for the year 700.

About Jeanette Maister:
Global talent acquisition technology leader with extensive experience in global talent acquisition, applicant tracking systems & recruiting technology, recruiting metrics and process. Deep insight into all aspects of campus recruiting strategy. Recognized for driving growth and helping clients transform their recruiting efforts.