The recruitment budget is essential for any business because it plays an important role in the growth of the business.
Designing a proper recruitment budget allows staffing agencies, human resources experts, and personnel who hires remote workers to attract great candidates and promote employee retention based on robust onboarding and retention processes.
This Remoto’s blog post tells you three simple criteria to plan your recruitment budget for 2022.
If you’re interested in building an outstanding budget, keep reading.
Evaluate your cost per hire
According to Aviahire in Medium, a recruitment budget is an annual estimate of the total costs of hiring in the organization, consisting of internal and external costs; that is, recruiter’s salaries, recruitment tech stack, and advertising expenses.
Generally speaking, the recruitment budget should be aligned with the company’s annual and longer-term business strategies, including the plans established by the CEO and the Board of Directors.
Before considering any hiring, it is essential to determine the budget.
Typically, the budget is left to the discretion of each company. Then you can decide how many new hires your company plans, which roles are harder to find than others, and what the actual costs are.
Lastly, you need to determine your average cost per hire. To develop the cost per hire, you can calculate the total costs of internal hiring, the external recruitment costs, and the total number of hires in a given period.
Setting up your time to hire
Another essential part of outlining a remarkable recruiting budget is estimating the time to hire.
For this, you can determine the time to hire by counting the days from the moment your prospective hire entered your pipeline (via sourcing or the app) and the moment your new hire has their first day on the job.
Remember that tracking time to hire metrics is crucial to select and hire the best candidate for a remote job.
Evaluate the current turnover rate
The term ‘turnover‘ refers to the act of replacing employees.
The turnover rate is measured by contemplating the percentage of workers who leave a certain company during a certain period, which can be a fiscal or calendar year.
Additionally, you can divide the turnover rate into internal and external groups. Internal turnover refers to employees leaving their current positions and taking new roles within the same company. In contrast, external turnover refers to workers leaving their jobs to go to other corporations.
It’s essential to integrate your company’s current turnover rate due to costs.
For example, when a worker decides to leave a company, a loss in productivity may occur. In addition, the company must consider other expenses for recruiting and hiring employees to replace workers who have chosen to leave their current position.
In other words, determining the current turnover rate allows you to identify direct costs with respect to staff turnover, replacement costs, transition costs.
Moreover, you can also anticipate indirect costs from lost production, reduced performance, and low workforce morale.
Wan to know more? This video will guide you what is a recruitment plan and how to prepare it.