Recruitment is necessary to the longevity and success of every organization. Hiring diverse, winning teams that contribute to a healthy workplace culture is the main goal of pretty much every HR team. Attaining top talent, however, doesn’t come without a cost, and creating a competent recruitment budget is essential to creating a robust recruitment strategy. 

What is a recruitment budget?

HRM budgets, hiring fees, and recruitment cost analysis are all things that go into a recruitment budget. Recruitment budgets are exhaustive annual approximations for the total cost of hires within your organizations. Budgets usually come in the form of spreadsheets and other documents/visuals, and advanced recruitment technology will often have these capabilities built into their platforms. 

Recruitment budgets obviously need to fit in with your overall annual budget, which requires a margin of error on additional or unexpected expenses throughout the hiring process, including internal churn rates. 

Breaking down what’s in a recruitment budget

Let’s break down exactly what goes into your recruitment budget. Things like HR team and recruiter salaries, recruitment tools and technologies, advertising/marketing costs, hiring fees, referral bonuses, and time spent interviewing and sourcing are all things that go into your recruitment budget. 

SHRM found that the average cost-per-hire is just over $4,000, but this will differ based on the size of your company, location, and industry you’re in.

A basic recruitment cost analysis requires you to calculate your overall recruitment costs, both internal and external, which can be estimated through the following steps:

1. Approximate your total number of hires for the year.
2. Identify your basic recruitment cost – this includes costs allocated to job boards, HR team/recruiter salaries, branding costs, and marketing/advertisement costs.
3. Estimate other fixed costs, which consists of technology subscriptions, outsourcing recruitment costs, and any recruitment events for the calendar year.
4. Include any additional costs that might improve the recruitment process. This includes things like assessment and pre-employment tests, personalization of candidate experience, and integration of recruitment metrics and technologies related to said metrics.
5. Add miscellaneous costs and estimate a margin of error if things go awry in the hiring process.

Once you’ve estimated the costs of all the above materials, you can add your internal and external costs, divide them by the total number of employees you plan on hiring for that fiscal year, and what is left is your cost-per-hire and an approximation of what your total recruitment budget will require. 

How does budget affect recruitment and selection?

Your budget will affect your ability to recruit, select, and utilize additional solutions to aid in the recruitment process. It will define your recruitment strategy going forward and your ability to implement third-party solutions, technologies, marketing capabilities, and more.

With the help of a recruitment budget template, you can easily assess what is necessary, what’s dispensable, and where you have wiggle room to remove costs. The key is to hone in on what solutions, technologies, fixed costs, and additional resources are absolutely necessary and which are luxury items. With the right solutions, you can cut costs by implementing all-in-one recruitment platforms that bring multiple applications together that simplify the process for you. 

[Read More: Employee Selection Methods]

Once you have your budget and costs laid out, the next step is to track your progress to see how your KPIs are holding up and whether or not you are meeting your goals with your current resources and capacities

Crosschq Is The All-In-One Reference Check Solution for Your Budget

Crosschq is the #1 digital reference check platform that will help you hire 95% faster and give you all the analytics and insights to make the right hiring match. Take the guesswork out of hiring and create diverse, winning teams with Crosschq today.