The current dynamic of the world has changed the way we work, eat, communicate, interact with our communities, and, yes, hire. There have been volatile changes in the hiring market, forcing HR teams to adapt and adjust the ways they operate.
It also forced hiring teams to change the ways they plan and budget for the future.
Hiring budgets take into account pretty much everything that goes into the recruiting process. In order to better plan for the future and prepare for potential variations in the hiring markets, HR teams need to understand exactly what goes into their budget, and they need a budgeting strategy to organize and systematically plan around their budget.
General HR budgets typically include:
HR teams should have these budget items mapped out clearly and definitively, including last year’s budget and the next year’s projections. Below we’ll get into how you can strategically plan around setting a budget.
Having a plan is just as important as actually mapping out your budget so that the process is as efficient and seamless as possible. There are two general and major methodologies for budget planning that will help provide a strategic frame from which you can begin to plan for your fiscal year.
The first of these is incremental budgeting. According to the Society for Human Resource Management, incremental budgeting involves utilizing your current budget as a starting point to your new budget, making incremental adjustments either upward or downard on each item in your budget based on your current projections.
The second method, a zero based budget, takes the starting point of the budgeting process with a clean slate. Each individual item on a budget must be justified as it is added to the list, which enables HR teams to take complete control of their budgets. This option is preferred if teams know that there will be dramatic changes to an upcoming fiscal year, either through the hiring market or in their internal operations.
Budgeting isn’t simply about salaries and hiring needs, it takes into account benefits, medical insurance, training, and so much more. Your budget should be comprehensive and thorough, providing a realistic and holistic look into what is required of HR teams.
Below is a list of things that should be a part of every HR budget:
The average cost per hire in the US is $4,000, and it typically takes 24 days to acquire new candidates from start to finish. These costs take into account all the various aspects of recruitment and placement charted above.
A recent Bureau of Labor Statistics release showed that, on average, companies are paying $40 an hour on employee wages and benefits. While wages and salary averaged $25 dollars (70% of employee costs), benefits made up approximately $11 (30% of employee costs).
In 2016, the Association for Talent Development found that organizations were spending an average of $1,252 per employee for training and development.
Wellbeing and wellness programs have a wide range of costs, and studies have shown that annually these can be anywhere from $150 - $2,000 per employee, per year.
Crosschq new hire analytics provides you with an AI-drive model to predict candidate success and map employee cycles to understand when and why employees churn.
If planning your future HR budget is partly about making predictions, then HR teams and advanced analytics hiring solutions, like Crosschq, to help them understand hiring patterns and plan appropriately for the future.
Try the demo today to see how Crosschq can help.