Planning Recruitment Budget for Blue-Collar Workforce in 2023
A good recruitment strategy is sourcing the right employee without breaking the bank. An organisation usually does this in collaboration with the HR department. But studies have found that 15% of human resource expenses are for hiring needs. This includes job posting and advertisement, video interviews or using a candidate tracking system. The human resource team typically shoulders the responsibility of crafting a recruitment budget plan keeping in mind the advertising, number of candidates and the onboarding. The larger organisational goals, like cost reduction, also influence it.
Having a carefully planned budget ensures the funds are spent exactly where needed. Your recruiting efforts have a direct impact on the staff quality as well which can define the company’s overall revenue and reputation. Consider a few tips for concluding a practical budget for 2023 and beyond.
Estimate the Cost Per Hire
Use this formula:
Internal Cost + External Cost/Total Number of Hires Needed = Average Cost Per Hire.
Take referral incentives for existing staff and extra pay for the HR team into account per candidate that is hired. You should not forget the costs of third-party recruiting agencies as well. But the good news is that it is quite a predictable expense and knowing and having a rough estimate beforehand can avoid recruitment budget-related hiccups.
Consider Additional Expenses
There are multiple recruitment needs and each one involves specific costs. It includes:
- job postings on job search websites
- branded social media content and
- printed materials like brochures.
- orientation and onboarding program
You will have to factor in background verification, general administration work, commute and food if you are conducting a recruitment drive and resources needed to take the interviews into the expense list as well. The good news is that dedicated HRMS software is priced at no-cost in the beginning which reduces your technology investments.
Do Not Forget Taxes
The hiring process, along with employee salary, has a distinct impact on taxes. But you can waive it off since job marketing or background checks are genuine expenses that be claimed back against taxable profits. Make sure to work with a legal professional who will help with tax-related issues for a good recruitment and selection budget plan.
Keep a Buffer
Hopefully, you will not have to deal with unnecessary expenses. Yet it is a good idea to flexible with the recruitment budget plan. Staying prepared will help you cover them without compromising on the recruitment process. For instance, there could be walk-in candidates who have turned up for the interview without a formal appointment. You may also have to take more interviews than expected to get hold of a suitable candidate for a position. Use the extra money to pay for these instead of cutting on other business expenses.
Training and Development
This is a significant part the recruitment budget. You will have to allocate some funds to brush the existing skills of the candidates by arranging for seminars, online courses, reading materials and workshops. Upskilling is also necessary to add to the skill set. All of these play a key role in improving the growth and performance of frontline workers. An organisation is a sum total of what each employee achieves individually. So, it is a good idea to keep a good chunk of the recruitment budget for the learning needs of workers.
How Can an HRMS Software Help?
Working with HRMS software can help you automate the whole process. The best ones use an ATS which is an AI-based technology. It can streamline talent acquisition and simplify hiring needs. For example, an ATS can post jobs to multiple portals with a single listing. The hiring stages for different openings can also be personalised.
The software is all-inclusive which means background checks, onboarding, upskilling and additional recruitment requirements are centralized. All of these activities are done in compliance with legal regulations. You may not have to pay for each service separately to different agencies. This is a good way to save some bucks. Instead, rich insights help you conduct data-driven blue-collar workforce decisions.
You can get by your recruitment budget planning with a little help from HRMS software. Make sure to pick the one that has a people-centric approach so you can achieve operational excellence. Make sure it can easily integrate with your existing tools and platforms.
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