How to get the most out of your hiring budget

This informal CPD article ‘How to get the most out of your hiring budget’ was provided by Talos360 who marry thought leadership with award-winning cutting-edge HR tech, hosting webinars on everything from talent attraction, retention, onboarding, and current economic trends that affect HR and recruitment.

In this article, we’ll be discussing hiring budgets. Relevant, especially since we’re now well into the second half of the year. And at this point, we now can reflect on the successes and failures so far from a recruitment perspective, conscious that we may need to squeeze more from our hiring budget. If you’re keeping a closer eye on your recruitment budget, then we’ll unpack six ways you could get more out of it as we rush headlong into the remaining months of this year.

1. Plan your recruitment campaign

Now, you’ll not be surprised that our first tip is careful planning. But before you look away and mutter, ‘Well, that’s obvious’, just consider that 74% of HR professionals say they’ve hired the wrong candidate for an advertised opening more than once, and what’s that, if not a planning issue?

So, we suggest you refrain at all times from the scattergun approach to recruitment. It’s costly, and it won’t get you far. If you want to squeeze the most out of your budget, we suggest spending some time considering the following:

• The number of hires required.
• Will some roles be hard to fill?
• What are the skills gaps?
• Will your campaign include seasonal hires?
• Are you considering high-volume hires?
• Will you be recruiting graduates?
• What % is your current staff churn?
• What portion of your hiring budget can you relinquish to better staff retention?
• Can you upskill your current workforce to plug gaps? 

2. What makes up your expenditure?

This is an extended part of the planning phase and an important consideration. If you’re looking to maximise your hiring budget, then you’ll want to know how you’ve spent it in the past. To do this, you’ll need to consider the following:

• Your cost-per-hire
• Job advert costs (job boards, career sites)
• Paid social-media campaign costs
• Admin costs
• Recruitment tech costs
• External agency costs
• Onboarding costs
• Training costs

Did you know that according to Oxford Economics, the average cost of replacing employees is £30,614? They arrived at this figure because of the cost of lost output while a replacement employee gets up to speed and the logistical cost of recruiting and absorbing a new worker.

3. What are your fixed costs?

A necessary part of optimising your recruitment budget is factoring in those pesky fixed costs. Easily overlooked but necessary. And since we’re all teetering on the edge of a recession, you must consider whether those costs will remain fixed or will they increase.

For example, now might be the right time to consider whether you need to continue with a recruitment agency. If you use one, you’ll know that typically they charge around 20% of the base salary of the role you’re recruiting for and more if it’s a high-level position. Can you continue with these costs?

Your other fixed costs that are worth looking at could be:

• Your HR tech
• Your advertisement
• The paid-for recruitment events [including marketing collateral]

4. Your HR tech capability

With HR technology moving at such a pace, this is an excellent time to take another look at your current tech stack. Does it live up to your requirements? We suggest you make a list of all your tech. Are you paying for it piecemeal, or is your current provider behind the times?

Consider your current time-to-hire costs. Do they match up to the national average of 36 days? Could it be better? Could you cut admin time with new and innovative tech?

The best ATSs will allow you to:

• Attract talent
• Manage candidates
• Onboard successfully
• Integrate with 3rd party software

5. Track your time to hire

A big part of the hiring budget is the time it takes you to hire. Obviously, the longer you have a role unoccupied, the more money it will cost you, and the quicker your recruitment budget will drain. Once you know your time-to-hire, you can work out your cost-per-hire, and that’s where we start to get into your hiring budget minutiae.

But the question is, how do you work it out?

• Time-to-hire: Subtract the day an offer was accepted from the day the talent entered your pipeline.
• Cost-to-hire: Cost per hire = Internal recruiting costs + external divided by the total number of hires.

6. Get your people involved

To really get your recruitment budget working for you, you’ll have to get your people involved. Since the dawn of time, word-of-mouth is our way of communicating. It hasn’t changed. It’s just become more sophisticated.

So, to maximise your messaging, to trumpet your brand, and to safeguard your hiring budget, turn your people into brand ambassadors. According to figures, 45% of employees referred by colleagues stay at a company for longer.

Other interesting facts to get your thinking:

• Referrals take 29 days to hire compared to 39 using job sites
• Referrals boost job matching from 2.6% to 6.6%
• Employee referrals invite more relevant candidates
• Employee referrals are more likely to match your culture

We hope this article was helpful. For more information from Talos360, please visit their CPD Member Directory page. Alternatively, you can go to the CPD Industry Hubs for more articles, courses and events relevant to your Continuing Professional Development requirements.