5 Steps to Optimize Your 2022 Recruiting Budget
Budget season tends to take people by surprise. While we are heads-down fulfilling last year’s plan, we forget to look up and look ahead. Then we’re left scrambling and cobbling together a budget in a vacuum and under the gun. Let’s break the cycle this year. If your fiscal year is aligned with the calendar year, budget season likely kicks off in October.
With sufficient planning and lead time, you can ensure your Recruiting and Talent Management budget is optimized with the ideal blend of programs and technology investments to drive ROI. The following 5 steps provide practical guidance for making it happen.
1. Be Mission Critical – Not Just a Cost Center
A silo is no place for strategic development and budgeting for any department, including Recruitment and Talent Management. It is imperative to step back and seek to fully understand your company’s business objectives and the major initiatives that are coming down the pike. Does your company intend to expand into new markets or launch a new product line? Will your company prioritize diversity or retention? Is a merger, acquisition, or IPO on the horizon? What are the revenue projections? Is your company doubling down on a remote workforce or upgrading employee perks to compete?
After digesting the company’s top priorities, spend some time outlining the strategic role your department will play in fulfilling those business objectives. For example, your team may need to focus on onboarding and talent engagement, sourcing specialized talent, DEIB programming, or an employer rebrand. These strategies all affect the budget and operations for the department in the coming year.
Ultimately, you will want to clearly articulate how your department’s actions will be directly aligned with accomplishing the business objectives – effectively positioning your team as a mission-critical agent to the successful outcome. This involves some persuasive storytelling. Create a simple 5-slide deck to summarize and socialize the business objectives, the role of the recruiting team in fulfilling them, and a high-level assessment of the resources required. You will want to walk away with executive acknowledgement of the department’s pivotal role and a topline figure you can invest in the coming fiscal year.
2. Be Strategic and Inspiring
Now that you have full executive buy-in for the importance of your department, it is time to galvanize your own team and collaboratively articulate exactly how you will fulfill the mission. When it comes to planning and budgeting, preparing your budget requests in isolation is not a good strategy. You will spend much more valuable time in the long-run and perhaps wind up with disjointed initiatives that simply could have been more impactful if pursued as part of a concerted, integrated effort.
This is a great opportunity to host a team offsite and whiteboard the possibilities. For example, your team may need to invest in online learning and development platforms, or find ways to recruit specialized talent in unfamiliar places, or revamp your employer brand to reflect its commitment to new social justice initiatives. Together, you can identify synergies across the strategic themes and get into the weeds of supporting tactics like social media advertising, university recruiting events, branded swag, sourcing technology, and diversity programming.
Perhaps best of all, making this a group exercise builds camaraderie and gets the team invested in the budget, the plan, the goals, and the outcome.
3. Know Your Tech
In parallel with your strategic planning, evaluate the myriad technologies that are built specifically for recruitment and talent management. Sure, most come with a price tag that will consume a portion of your budget, but the right tools will offset other costs, maximize efficiencies, and ultimately lead to higher output.
But resist the temptation to license every type of tool. Instead, carefully map your software selections to your strategy and the gaps in your team. This is a good time to consider whether you can consolidate or reallocate resources—are there parts of recruiting you can automate or scale with technology? You will want to carefully review how each tool helps to achieve specific business goals. A lot of software tools will also include analytics to demonstrate progress towards KPIs. Armed with this data and the cost of the tool, you’ll be well on your way to demonstrating ROI in the tech investment.
Your company may warrant specialized technology for conducting remote job fairs, hiring webinars, and virtual interviews. Another company may need to lean on robust technology for virtual onboarding and e-learning platforms to integrate and retain staff. And others may need to invest in sourcing technology to quickly find precisely the right candidates before their competitors do. Look for products that integrate with other tools you will need and that offer longer contracts at a discount.
4. Bring it all Together and Earmark the Funds
Aggregate all the moving parts – the business objectives, your team’s strategic plan, and the technology recommendations – into a single budget you can defend. Ask yourself the following questions along the way:
- What matters to the business? Tie every strategy and tactic to a business priority.
- How can this investment impact that business objective? Make a clear connection between what the program/purchase/tool does to achieve the business objective.
- What can you measure (cost per hire, time to hire, diversity composition, etc.)? Update your KPIs with data points you know are readily available.
- What’s the ROI? Articulate why the investment is worth it.
Now it’s time to dig out the spreadsheets and estimate dollar values for every facet of your plan – from programs to technology. Start by deciding on the appropriate budget categories, such as Tools & Systems, Retention Programs, Recruiting Events, Promotional Materials, Perks, and Agencies/Consulting.
Each of these main buckets should have subcategories that will become integral to quickly proving ROI. For example, a subcategory of “Sourcing Technology” may roll up to Tools & Systems while “Headhunters” could be nested below Agencies/Consulting. You will be able to show the executive team that 10% of the budget went to sourcing software which yielded 80% of the hires, while 25% of the budget went to headhunters and 15% of hires. This insight will clearly influence mid-term budget recalibrations and it will influence the plan for the subsequent year. Most importantly, it will demonstrate your fiscal responsibility.
Be sure to leave room in your budget for unexpected needs.Your strategy may include a program you intend to pursue as soon as more information becomes available. For example, perhaps you will increase coverage at diversity events for women in technology, but you aren’t yet sure of the details. The room you’ve left in your budget can help. It can also be tapped for other contingencies or ad hoc requests that could not have been predicted at the time of creating the budget. Ultimately, budgets evolve just like companies do, so plan to be flexible.
5. Develop Internal Champions
You will clearly want to build a positive relationship with your CFO, but it’s important to also build bridges with other key stakeholders. HR and talent initiatives affect the whole company and so garnering support from others is vital. Socialize your plans in a way that makes your audience feel it is partly their idea. Your CEO may be wrapped up in your 5-slide story and eager to back your recommendations. Educating the CRO on your methods for achieving greater diversity in the sales team can win you a new advocate for your entire budget. And showing hiring managers how your software investments will make their lives easier will result in widespread support for your plan and the funds required to fulfill it.
Budget Your Time
It takes time to develop a solid plan that flexes to meet new demands and positions your department to contribute to the company’s success. Don’t let budget season catch you off guard! Take a moment to confirm the budget cycle timing with your finance department, and then allow ample lead time to complete the 5 Steps to Optimize Your Recruiting Budget. By budgeting your time, you will create a Recruiting & Talent Management budget that optimizes investments, maximizes returns, and is valued company wide.