Your successful recruitment process begins with a budget that must be properly planned and managed to keep costs under control. It’s important to establish a realistic budget early on – and maintain it regularly in order to achieve your business goals.
Why Budgets Matter
You need to synchronize your budget with anticipated talent needs because this real-time data helps you plan for the future, know where funds are coming from and going, and whether there are any “red flag” problem areas to be addressed.
What steps do you need to take to budget successfully and effectively?
Step #1: Plan Ahead
Your budget should be linked to the number of planned and unplanned vacancies expected within the next year. A strong HR function can make this prediction based on robust corporate strategy and ongoing feedback from managers.
- HR partners should sit with managers and plan. Then you can set expected costs and include them in your budget.
- Your team should deliver information on planned vacancies, so recruiters can identify the best sources to fill them.
- Unplanned vacancies should be budgeted based on a running rate through the current year.
- Promotion activities should not change dramatically from year to year as long as your business keeps its normal operations. These costs should be known and easy to accurately forecast.
Step #2: Be Realistic
It may be tempting to predict rising results and lowering costs as you formulate next year’s budget but in the long run, being overly optimistic can hurt your company.
- Factor in every cost and allow for them to be slightly higher than expected. Forecast results, but expect them to be a bit lower. This avoids unpleasant surprises at budget review time.
Step #3: Update Your Budget Regularly
Set aside time to regularly review and update your budget. And stick to it!
- Review all budget data. Are there areas where your department or business is underperforming? Where is money leaking from? What are your strongest income sources? Use this information to your advantage as you re-evaluate your goals and make changes that have a maximum positive impact.
Step #4: Choose the Right Software
The right software categorizes various sections of your budget and provides a clear overview of which areas require more funding than others. It also gives you targets to work toward so you’re less likely to overspend.
- You can use a simple Excel spreadsheet or a dedicated software system. Take some time to determine what you really need before you buy.
- A system with payment alerts is helpful so you’re aware of any unexpected or overlooked payments before they come due.
- Customized software enables you to tailor applications to your specific needs. For instance, if you’re advertising for more than one position, you can create multiple financial forecasts and manage them from a single account.
Step #5: Respond to Changes
Use your budget to effectively respond to business changes. If costs increase, see how you can absorb and react to them. If they go down, you can allocate dollars elsewhere.
- Generate a line of expenses. Then you can create and update your budget with accurate financial targets in mind.
For additional help in making your budget work for you and your company, contact the Ontario recruiting experts at Employment Professionals Canada today.