January 06, 2021
Recruitment has always been a very cumbersome and challenging process for businesses and more so for start-ups and even greater a challenge is to hire the right candidate with the right skill-sets. In spite of these challenges, an effective recruitment process is highly imperative for any start-up and hence the start-up should invest well in the recruitment process. However, here arises the tricky aspect of identifying the requirements of the start-up and ascertaining the budget for recruitment. Hence, it becomes essential to understand the basics of effective budgeting for recruiting employees.
Before we talk of ‘Effective recruitment budget’, let’s first look at ‘Budget for hiring’
Recruiting new employees is a costly affair; you should allocate a budget to keep the costs under check. However, there are many aspects to keep in mind when designing the budget, such as the size of the start-up, finances, allocation of budget, number of employees required, and much more. You would also need to estimate the fixed costs that may be incurred while hiring throughout the year and this will also include the direct cost of recruiting through avenues such as job boards or recruitment agencies.
Not planning in advance while designing the recruitment budget may lead to overspending and this in turn can mess up the hiring plan for the company, waste time and result in wasted resources. There are different types of budgets; choosing the right one at the outset will add tremendous value to the process in the long run.
Steps to create an effective recruitment budget
The budget will vary depending on the size of the start-up, the nature of business, number of employees that are required to be hired etc. But there are certain points that need to be followed by every start-up if it wants the recruitment policy to be effective. Also, a start-up may need to consider business accounting and hence hire accountants who will help them prepare the budget and also enforce the same. Let’s look at the steps that a start-up needs to follow to make sure that their hiring budget is effective –
1. Examine past hiring trends and costs
As an accountant cum hiring manager, you should analyse past budgets and recruitment strategies to so as to identify the successful ones and allocate the finances only to such steps to ensure that your budget is effective and the goals are achieved. Also look at any past hiring events conducted by the start-up such as walk-in interviews or job-fairs, costs associated with technology usage or any other associated costs related to hiring.
2. Ascertain your per employee budget
Your firm’s per employee budget is directly linked to the overall budget allocated for recruitment purposes. The budget will vary depending on the structure of the start-up, however, it is highly advisable to estimate the cost of hiring as well as retaining for a better long term approach.
3. Evaluate yearly recruitments
Prior knowledge of number of candidates to be recruited for the year will help you break down the cost into quarters. Estimate the cost of recruiting for the entire year including the costs of recruitment agencies, channels, and cost per hire. The total estimated amount can now be divided into the four quarters so that there isn’t a negative impact on overall business finances. This practice will also help you create an effective budget depending on your current financial situation.
4. Analyze and carefully monitor the cost of hiring events
Interesting job postings, innovative procedures, tie-ups with job fairs, hosting events etc. help build employer branding but at the same time various costs are associated with these and hence they need to be taken into account while preparing budget for recruitment.
Contact us today
Doshi Accounting has more than two decades of experience in providing top-notch finance and accounting services to many clients throughout the UK. Our quality of work and testimonials speak for themselves! Whatever is the size of your start-up or the sector that you operate in, we will listen to all your needs and prepare a highly customised and effective recruitment budget for your start-up.