5 Steps to Optimize Your Recruiting Budget In 2023
Finding the perfect employees that can help to accomplish various goals is one of the main struggles that companies face.
Regardless of their types and size, businesses need a highly professional and talented team, without whom it will be impossible to grow and scale.
To succeed in this process, companies typically build recruiting budgets to achieve their recruiting goals.
But by having a strategically built and well-thought-out recruiting budget, businesses can keep up latest recruiting trends as well. In this stage, it's essential to know that 89% of companies are now recruiting virtually.
In the article, we will give you tips on optimizing your recruitment budget while finding the perfect candidate.
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What is recruiting budget, and how beneficial can it be
First things first, let's start defining what recruiting budget is. Basically, it is a financial document that describes the strategy of how HR departments should manage their recruiting activities.
Typically recruiting budget includes fixed and variable costs for the recruitment process. This type of budget also contains all expenses the company prepares for recruitment and also suggests a certain percentage for unexpected expenses.
Let's look at some vital components that recruiting budget should include:
✓ Recruiting events
In your recruiting budget is a must to include whether you are planning to participate in recruiting events. These are different career fairs and conferences, which are great chances to connect with active job seekers.
In addition to this, recruiting events are an excellent opportunity for recruiters to grow their professional networks and attract interested candidates.
Moreover, recruiting events help recruiters to create personal contention with potential customers and highlight the company's values. This way, you can convince future employees to apply for job positions.
To check the efficiency of recruiting events, calculate the cost of the event by the number of job seekers who applied.
✓ Referral bonus and fees
Employee referral programs carry huge importance in improving your recruiting efforts.
As many companies find the perfect candidate from a referral, therefore your budget should include what kind of referral bonus you should give your employees for bringing talent to the company.
Referral bonuses and fees can be extremely beneficial, especially if your company manages to build strategic guidelines.
✓ Cost of promoting your job on different channels
Your recruiting budget should also include which ways are joining to promote your job opening. Fortunately, opportunities are endless for recruiters to advertize their job offers.
First and foremost, job boards can be the main sources for finding the right candidates. Therefore consider annual or monthly subscription fees that your businesses should pay.
Another method is creating ads on LinkedIn or Facebook to promote your job offer to people who are looking for career opportunities on those social media channels.
✓ Define whether you build recruiting team or outsource recruitment
Typically, small businesses don't have recruiting teams; therefore, they choose to transfer this task to other companies. These external organizations help small companies to find the right candidates.
Meanwhile, big companies have their own recruitment teams who are responsible for all hiring processes starting with creating job positions and assessments.
In all cases recruiting budget should include the cost of working with external companies or keeping recruiting budget.
✓ Cost of employer branding
Convince skilled professionals to work for your company is vital to maintain a positive company reputation.
To promote vision of your company and successfully market your organization for potential hires by showcasing your employer brand, companies have to use different digital marketing tactics.
Thus, when building recruiting budget, they should consider expenses to produce content or collaborate with digital marketing agencies.
✓ Career page on the website
One of the most crucial aspects in attracting the best candidates is building a website with has career page which provides all the necessary information to potential hires about new job openings.
Thus, recruiting budget should include these expenses as well. Also, decide what software development approach you should implement and think about monolithic architectures which will make this process even more effective.
Last but not least when building a recruitment budget, it's vital to tailor it to the company's short and long-term goals.
Optimize your recruiting budget in five ways
After diving into the definition of a recruiting budget, in the next step, we are going to discuss how a company can optimize that crucial financial document.
1. Build a plan and define your goals
Without having clear and measurable goals in mind, it's impossible to succeed in any type of businesses strategies. And the process of optimizing your recruiting budget isn't an exception.
Therefore start building a recruiting plan that will be your guide to managing your resources and ultimately finding the right candidates. Building a plan is an important step for managing your recruiting budget effectively.
The first step in planning a recruitment budget is determining your recruitment goals. Decide how many new staff members your company needs and write down on your plan what you expect from new hires.
This includes what skills and experience they have, and also the number of salaries you are going to pay them. Salary will be different whether you hire junior professionals or senior managers.
In case some job openings it is more difficult to find the right candidates, you should spend more money to fill in the position.
Another vital component is defining soft skills candidates should have and whether they share company culture. Because it will be a huge mistake to spend resources to recruit a candidate and then didn’t continue to work with them because they didn’t fit the company culture.
In this stage is vital to organize meetings with departments. Plus, you'll know how many yearly hires you need to find in a given year manager and recruit them to discuss with them their hiring needs.
2. Create a candidate persona
To accomplish your recruiting goals, it is vital to have a clear picture of your ideal hire. And creating candidate personnel will help your company to direct strategies and manage resources to attract perfect candidates.
It will be helpful to reduce the turnover rate. To ensure they are a successful asset within the company. Defining your candidate persona helps to build an effective recruitment process and, meanwhile, increases your company culture.
First, organize meetings with hiring and recruiting managers and design a list of qualities and skills you are looking for in new hires. This includes experience that fits your company culture. Basically, research and discuss what type of employee your business needs to reach higher business goals.
After researching and analyzing, recruiters can create a job description that highlights what type of employees the company needs. What is important is that by having a candidate persona, recruiters can find the perfect hire faster, and as a result, your business should spend less money at this stage.
3. Calculate the cost of recruitment
This is definitely the most important step to optimizing your recruiting budget. There are different ways to calculate it, and the process depends on what job opening businesses need to fill in.
Another important component is to define what advertising tactics you should use. Let's go step by step through how you can determine recruitment costs.
✔Calculate cost-per-hire and also decide your total number of hires
✔ Decide your build in-house recruiting team or choose the recruiting agency. And depending on that facts, estimate the salaries or fees you are going to pay. In this stage, for doing financial transactions with agencies use SMS authentication service to keep sensitive private secure.
✔ In case you have recruiting department, then you should define what advertising methods you use. Include in your budget the cost of the promotion via the job board. In case you have a plan to create social media ads, then your plan you contain that as well for that.
✔ Most definitely, your team used different recruiting technologies, then your budget should include that cost as well
✔ There is a huge chance that your team designer employee referral program, in that case, includes employee referral fees as well
✔ Employer branding is vital for the recruiting process; thus, define the budget that you spend on that task, like creating videos and social media posts, ad campaigns, and social media posts. Employer branding is an essential part of attracting quality candidates and staying competitive in the job market.
✔ Unexpected expenses
There will be changes in your policy and unpredicted employee departure as well, do when calculating your budget, include unexpected expenses as well.
Also, prioritize cybersecurity, and in case you are communicating with potential candidates via email, setup DMARC to keep your company and their data secure from attacks.
4. Set and optimize your referral campaigns
One of the best tactics to find and invite perfect candidates to your team is implementing employee referral programs. This is an excellent method where your employees use their network to bring qualified and skilled employees to the team.
And for that, your business should offer different incentives for that. These programs are also more cost-effective tactics; therefore, your company will find the right employee faster while spending less money.
A successful employee referral program can help you add your company new team members who perfectly fit the company culture. Start the process of setting clear goals for your program and create participation rules for your employees.
In addition to that, define what type of rewards and other incentives employees would like.
Offering referral rewards that your employees prefer can inspire them to join the program and send a referral email to qualified candidate. As a result, Well-designed and well-managed employee referral programs can also improve employee satisfaction and lead to better employee retention rates.
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5. Use the power of social media
There aren't any doubts that social media play a huge role in different aspects of people's lives. And people use social media platforms not only to socialize but also to find new career opportunities.
In fact, a survey has proved that 79% of job seekers tend to use social media to search for jobs. This opens wide opportunities for recruiters to find and attract perfect candidates. And it will be a huge mistake not to use the power that those platforms offer.
Social recruiting itself is a broad concept that includes advertising jobs, connecting with prospective candidates, and recruiting them. This tactic uses recruitment marketing strategies and supports your employer's branding efforts. The greatest benefit of social recruiting is that companies can reach more candidates.
Moreover, it's worth mentioning that as referral programs, social media recruiting also is a cost-effective tactic. It can save your business time and money. The reason is that tactics like creating sponsored postings on job boards or participating in recruiting events are far more expensive.
First of all, companies can create a solid social media presence to boost their brand awareness, emphasize their company culture and attract candidates to apply for job offers.
Next, when creating quality social media content, it will be easier for your employees' networks to share job postings. Another great factor is that social media platforms will let businesses connect with candidates and ensure smooth communication.
Social media channels are an irreplaceable place to find out important information about potential new employees that they can't find their resumes.
When speaking about the role of social media in recruiting, it is impossible to ignore the importance of LinkedIn. It is the biggest professional network, which recruiters use to find out candidates' experience, skills, and interests.
Last but not least, emphasizing that social recruiting is a cost-effective tactic and mentioned other benefits, it doesn't replace traditional advertising methods.
Therefore you should include the cost of job board promotions in your recruiting budget. In addition to that, don't hesitate to support these tactics with social media recruiting.
To sum up
Without any hesitation, poor recruitment decisions can damage your recruiting budget.
Therefore having strategies to optimize your financial document is extremely important. In this article, we gave you some tips on how effectively manage your recruiting budget.
This way, you can attract the right candidates, which are the backbone of your business growth.