Before facing the challenges of recruiting, human resources teams must first undergo the hard work of determining their hiring budget. Firm size, allocations and projected annual job openings all go into making these critical decisions, but the work doesn’t end there.
Even after a budget is in place, it needs to be closely monitored for effectiveness. So whether your firm is putting together your first hiring budget or is concerned about its sustainability for the year ahead, we have the answers to your questions.
How to create an annual hiring budget
1. Generate your personnel budget
In order to correctly forecast cost-per-hire, firms must track each hire’s salary impact by quarter. That includes compensation for taxes and contract benefits built into the hire. If your business plans to bring any temporary specialists on board, these should be factored in as well.
2. Account for hiring costs
Posting online listings for asset management jobs and accounting jobs can be costly. So too are the fees associated with managing social engagement, improving your online presence and leveraging third party search agencies. Accounting for hiring costs like these is essential. Without including them, a budget can easily balloon beyond your control.
3. Consider event expenses
Hiring events aren’t cheap. They cost firms both time and money, so take all such events under consideration as you craft an accurate recruiting budget. Smaller firms should adhere mostly to career fairs, which are less expensive than the formal meet-ups hosted by some larger firms.
A hiring budget requires an accurate estimate of annual firm openings. How many positions must you fill?
4. Determine approximate number of hires
Properly breaking down a hiring budget means that you have a good idea of the number of jobs that will open during the year. Take that number and divide it into quarters. This will give you a solid estimate of what will be spent on hiring for each position and when. Leave your firm some leeway as you budget. Sudden and unexpected openings are unavoidable, and you’ll need to fill them.
5. Institute a bonus program for referrals
If your firm doesn’t already have an employee referral bonus program in place, now is the time to institute it. Referral programs are a great addition to the hiring process and benefits the entire firm. Factor in bonus fees for about a quarter of the positions you expect to open throughout the year.
How to review your current hiring budget
“Outdated salary information puts your hiring budget at a disadvantage.”
1. Assess using the most recent data available
Today’s finance industry is ultra-competitive. To attract the best talent, firms need to confirm they’re offering the benchmark salary for open positions. Relying on outdated data – even if it’s last year’s – is risky. Make sure your firm has the most current information available, and talk to your professional network often.
2. Update your hiring strategy
Many firms have been relying on the same hiring strategy for years. Some are even still holding onto the same outdated methods they used during the Great Recession, when finding job applicants was practically as easy as looking out the window. Now is the time to review your hiring strategy to reflect the benefits and opportunities demanded by today’s candidates. Otherwise, your firm will be at a disadvantage.
3. Expand the budget if necessary
Budgetary constraints can make hiring an uphill battle. In certain situations, approaching senior management for an expanded hiring budget is necessary. That’s not always the case though. Sometimes it’s better to consider other strategies, like implementing a cost-effective recruiting tool like OneWire.
Creating and reviewing a hiring budget is not the most engaging task but it’s absolutely crucial for your effectiveness as a recruiter. Stay diligent and measure how often you are above or below your quarterly budget to maximize your recruiting efforts over time.