We’ve almost reached the end of 2019, and that means it’s time to start thinking about budgeting. If you’re involved with recruiting for your organization, you’re naturally going to want your fair share of the budget. So how do you make sure you get what you need in 2020?
With this article, I’m going to go over some of the key steps you’ll need to take while putting together a budget with a good shot at being approved. We’ll go over some of the things you might not consider, as well as some of the more common-sense parts of putting a budget together.
You already know that if you’re going to get a budget approved, you’re going to have to defend it. And if you want to defend it successfully, you’re going to need data proving the cost-effectiveness of the recruitment tools you’re interested in using in the coming year. So a major part of putting together the budget for 2020 is going to involve going over the numbers from 2019 and finding out what worked and what didn’t work. So let’s get started with the steps that will help you put together the best possible budget for 2020.
- Examine Where Your Money’s Going Now
When you’re putting together an effective budget, the first thing to do is take a look at the current budget and see what you’re actually getting out of it. How much of a priority is recruiting in your organization at the moment? How much are you putting out each month, and what results are you getting in return? What’s your cost to hire, and when are the busy seasons where your recruiting efforts are most effective?
You should also take a look at any new projects you’re considering, as well as whether your recruitment technology needs an upgrade. Figure out what you need, and when, and how you’re going to spend it so it will be as effective as possible.
Consider your organization’s overall condition going into the new year. Are you going through any expansions or major changes that are going to make recruiting a higher priority? Or are you experiencing slow growth with low turnover, in which case recruiting won’t be as much of a focus?
Once you’ve gotten into the details of what you’re doing right now, it’s time to figure out which strategies are working for you and which ones haven’t been performing so well.
- Find Out What’s Working
The best way to predict the future is to look at the past. That’s why the next part of putting together a strong recruiting budget is to examine what you’re doing now. What methods are you using to find candidates, and which of them have been the most successful?
Consider what’s been budgeted into recruiting and how successful you’ve been with that budget. If you want to improve that recruiting budget for next year, you need to be able to show how you’ve gotten results, and which areas are getting the most bang for your buck. You’ll also need to get up close with whatever isn’t working so well. In a changing environment, it’s always important to adapt to new situations.
As you prepare your budget, it’s going to be important to gather hard data that shows what’s effective and should be increased, as well as what’s ineffective and should be either decreased or reworked. Examine all the recruitment methods you’ve used in the last year. Was social media the most effective tool? Or job ads? Or third-party recruiters?
Examine all these tools, and others, in terms of what was able to bring in quality hires in the most timely and cost-effective manner. Let’s talk a little about what kinds of statistics are important in this kind of budgeting.
- Measure What’s Important
Without hard data to back up your budget, you’ll have very little chance of getting it approved. It’s not enough to say that this or that recruiting strategy is effective. You have to be able to show how effective it’s been in the past.
So what figures do you need to gather to show the effectiveness of your recruitment methods? The first of these is the cost per hire. You’ll want to know the average cost per hire for recruitment as a whole, as well as for whatever methods you’ve been using. This way you can compare methods and have an objective measure of how well your methods work.
Beyond that, you’ll want to know how many hires you make in the average month. Barring any major changes in your organization, you can assume that you’ll be making roughly the same amount of hires in 2020 as you did in 2019. But even with changes, you can use the cost per hire to estimate roughly the budget you’ll need in the new year.
Last, you’ll want to know the average time to fill. Some hiring methods might be less cost-effective, but more effective at bringing in the right candidate quickly. This will help you plan for crises and decide which methods will work best when you need to make hires fast.
Of course, there are many other metrics that are important in putting your budget together. But these three should give you a framework for understanding your needs for the year.
- Leave a Little Extra, Just in Case
The whole point of having a budget is to make sure you always have the resources you need, when you need them. So even after you’ve added up the expected costs for the year, it’s important to have a reserve in case of emergencies or unexpected opportunities.
Once you’ve taken stock of where your recruiting efforts are right now, found what’s working and what isn’t, and run the numbers on what’s happened over the past year, you should have the basis of a strong budget. Add in enough to take care of any unexpected changes and you should be able to get your budget approved and execute well in the new year.