What’s Your Annual (Planned) Hiring Budget in Business and at Work?

Like any other business costs, salary, benefits, recruitment advertising, and recruiting cycle-time (e.g., payroll time spent by hiring and HR managers) are key items to be included in the business’s overall annual budget.

However, some businesses and organizations in other sectors at times don’t plan as effectively for these essential business costs. For example: earlier in my career, as I worked to prepare an employment offer in collaboration with my boss, they whipped out a calculator and proceeded to manually calculate all existing employees’ salaries and benefits to then determine what they could afford to pay in salary and benefits to the the lead candidate – it was like watching them count out the amount in dollar bills from their personal wallet. Suffice to say it wasn’t a market-competitive number, and the candidate subsequently turned us down.

Especially in the current tight candidate market, failure to adequately plan to pay for market-competitive salaries and benefits and accompanying recruitment and retention costs is indeed a plan to fail.

Here are some basic steps to take to effectively plan for hiring (including but not limited to):

• How many employees are needed to keep the organization’s success engine running? (Hint: without exception, almost all organizations need employees.)
  • What skill sets are needed?
    • Sales?
    • Marketing?
    • Engineering?
    • Customer service?
    • Finance?
    • HR and Recruiting professionals (in-house or outsourced) to hire the employees you need?
    • Are other positions a make (e.g., employee) or buy (e.g., outsourced functions and/or services) decision?

• What wage levels are driving the market?
  • For example: when local Target distribution centers are hiring workers at over $19 an hour, is paying the minimum wage getting you the number of people that you need at your distribution center?
  • Are your hiring managers aware of the salary budget for their respective open positions before they spend time pursuing a candidate?
    • Is your organization publicizing the salary in your recruitment advertising? (Hint: more employers are sharing wage rates and salaries in their employment ads.)
    • Are you asking candidates at the beginning of the hiring process what their salary requirement is? (Hint: for nonprofit organizations, this is an essential data point, as the majority of nonprofit organizations don’t have the financial flexibility to hire above their prescribed salary budget.)

• Are your benefits market-competitive?
  • Do you pay for the majority of employee health care?
  • Do you offer retirement savings options?
  • Do you offer flexible scheduling options?
  • Do you offer paid time off?

(Hint: when your compensation and benefits are market-competitive or better, your ability in turn to recruit and retain your employees is market-competitive or better.)

• Have you sufficiently budgeted the money for recruitment advertising and payroll time for your employees to implement your recruitment advertising, etc.?

What are your annual recruitment (hiring) and retention plans and accompanying budgets to successfully implement those plans, in business and at work?