How much do companies spend on recruiting? I found very few examples of a detailed recruiting budget template on the webosphere. So, I pinged my smart recruiting friends to help guide me. Below is what I found.
3 Recruiting Budget Template Approaches
Let’s start with a recruiting goal in mind. How about 500 hires a year? That’s as good a number as any for an enterprise company.
If your hiring volume is different, I link off to this Recruiting Budget Template spreadsheet, where you can input your own hiring volume and find some other goodies.
Ok, let’s start first with 3 recruiting budget templates to use.
1. Simple Recruiting Budget (# of Hires * Cost-per-Hire)
A good place to start your recruiting budget is to establish your hiring volume over a specific period. This can be as simple as 500 hires over the next 12 months.
The hiring # number multiplied by the average cost of hire can give you a rough estimate of how much you’ll spend on recruiting. You’re just using a simple formula:
An average cost-per-hire is easy to find. Resources like SHRM and Bersin peg the average cost-per-hire at around $4,000 to $4,500.
So, let’s use the midpoint of that range: $4,250. Then, you simply multiply your $4,250 assumed cost-per-hire by the hires you need in a year (500 in our example). See below:
Example of Simple Recruiting Budget
| How many people do you need to hire this year? | 500 |
| Average cost per hire | $4,250 |
| Total Recruiting Spend | $2,125,000 |
If your hiring mix is fairly even and you’re not using external recruiters, the simple {# of Hires * Cost-per-Hire} formula gives you a solid ballpark for what you might spend on recruiting.
But, to fine-tune your recruiting spend, it’s worth trying the next 2 approaches below:
2. Recruiting Budget by Source & Type (Internal Recruiter/Headhunter Blend)
Recruiting is rarely that simple (especially for mid-market or enterprise company (500+ employees).
There are 2 other key data points:
A) Job Type Distribution — You’ll want to break down how many roles you need by job type (this could be by seniority or by department). To keep it simple, I’m going to take a hypothetical enterprise company that has the following hiring needs for a 12-month period:
| Type of Hire | # of Hires |
| High-Volume/Entry-Level/Support Roles | 150 |
| Sales/Mid-Level Roles | 250 |
| Technology Roles | 85 |
| Leadership/C-Suite | 15 |
| Total | 500 |
B) Cost-per-Hire Varies by Job Type — Your cost-per-hire will vary depending on the job type. A good rule of thumb is that:
- Entry-level/High-Volume jobs are usually the lowest cost-per-hire — Depending on your industry, you may only need to spend $500 to $2,000 per entry job hire (let’s use $2,000 per). You’d need to talk to experts in your area to get this assumed cost-per-hire (if in doubt, just use the $4,250 per hire which will be conservative).
- Mid-level jobs are average cost-per-hire (let’s use the $4,250 SHRM/Bersin average for this)
- C-Suite & Leadership jobs are the highest cost-per-hire (these roles are so hard to fill that there are often outsourced to an executive search firm (headhunter) who charges you 15% to 30% first-year’s salary.
Check out the below sample budget for a new scenario in which you’re still trying to hire 500 people. You now add more details on the volume by types of jobs and their different cost-per-hire.
Recruiting Budget by Source & Type
| # of Hires | Source | Avg. Cost-per-Hire | Total Recruiting Spend | |
| High-Volume/Support Roles | 150 | Internal Recruiters | $2,000 | $300,000 |
| Sales/Mid-Level Roles | 250 | Internal Recruiters | $4,250 | $1,062,500 |
| Technology Roles | 85 | Internal Recruiters | $5,000 | $425,000 |
| Leadership/C-Suite | 15 | Headhunter | $50,000 | $750,000 |
| Total | 500 | $5,075 | $2,537,500 |
In this case, your total recruiting budget is noticeably higher ($2.5M versus the $2.1M calculated using the simple {# of Hires * Cost-per-Hire} formula). The big difference, of course, is the Leadership/C-Suite jobs — those tally up to $750K USD ($50K*15 hires).
Your cost-per-hire is 19% higher ($5,075 versus $4,250) than the simple formula from section 1.
3. Recruiting Budget Using an RPO
Another way to estimate recruiting spend is to consider outsourcing all recruiting to an RPO (Recruitment Process Outsourcing) company.
The beauty of an RPO is that they recommend the recruiter resources, so you know what your costs are going to be. One top RPO is WilsonHCG. Their CEO John Wilson explains it this way:
“Recruiting is what we do…that’s our business. Whether it’s Workday, Cisco or Apple, recruiting is not their business.”
A good RPO company will outline your recruiter needs by the job type/volume For example, if you feed your hiring needs to an RPO like WilsonHCG, they might work up a proposal like the following (again, using the 500 hires per year example):
Recruiting Budget Using an RPO
| # of Hires | RPO Hires this Many Recruiters | Cost per Recruiter | Total RPO Recruiting Spend | |
| High-Volume/Support Roles | 85 | 1 | $120,000 | $120,000 |
| Sales/Mid-Level Roles | 225 | 3 | $144,000 | $432,000 |
| Technology Roles | 175 | 4 | $162,000 | $648,000 |
| Leadership/C-Suite | 15 | 2.5 | $200,000 | $500,000 |
| Total | 500 | $1,700,000 | ||
| Cost-per-Hire | $3,400 |
You’ll notice that the total recruiting spend ($1.7 million) and cost-per-hire ($3,400) are the lowest of the 3 recruiting budget approaches.
Some estimates are that the cost-per-hire using an RPO can be 5% to 10% of the first-year salary (source: Hirevelocity Cost Per Hire). So another way to estimate your recruiting budget (using an RPO) is to multiple your average salary of the hires needed by 7.5%.
Next, let’s look at a couple of sample recruiting budgets from friends of mine kind enough to share what they know:
A Sample Recruiting Budget for a 500-Person Enterprise (hiring 100 per year)
My good friend Philip Ziman, an Adjunct Professor from the University of California, Santa Cruz, gives us the below sample recruiting budget for a 500-employee enterprise. In this scenario, the Recruiting Manager reports to the VP of HR. It assumes hiring 100 people per year because the company requires a 5% headcount growth rate but has a 15% turnover rate. All #s are $USD.
Fixed Costs
- Recruiting Manager (fully loaded) – $200K
- Scheduling Assistant (fully loaded) – $80K
- ATS Software (annual subscription/maintenance) – $50K
- LinkedIn core subscription – $75K
- Glassdoor subscription – $10K
- Recruiting web page maintenance – $5K
- University relations contributions – $10K
Variable Costs
- Contract recruiter per position – $5K
- Linkedin advertisements – $2KAgency fees per hire – $40K
- Specialized advertisement per position – $2K
- Candidate travel/expense per interview – $1K
- Employee referral per hire – $1K
Indirect/Soft Costs
- Management/Employee time per interview & onsite hosting – $.5k
- Replacement lost productivity and training per position $100k
A Sample Recruiting Budget of a 600-Person Tech Company (hiring 80 people per year)
Another friend of mine (anonymous) gave me this example of how much a fast-growing tech company spends on recruiting. They hire about 80 people per year:
| Recruiting Spend | % of Total | |
| Recruiting Headcount | $1,400,000 | 70.0% |
| Recruiting tools | $331,000 | 16.6% |
| Referral bonus | $130,000 | 6.5% |
| Other Software (ATS) | $68,000 | 3.4% |
| Employer branding | $37,000 | 1.9% |
| Localization (moving costs) | $34,000 | 1.7% |
| Total | $2,000,000 | 100% |
Need more recruiting budget line items? Here are some other thoughts:
Recruiting Budget Line Items
Elaine Davidson, CEO of Beacon Lane Consulting, a global (but boutique) talent consulting firm, has clients with budgets ranging from $1 million to over $10 million USD.
Elaine says the exact list of recruiting budget items depends on what the employer’s focus is at the moment (e.g., implementing a new ATS, adding on a sourcing tool, Candidate experience tool, etc.).
She finds the following are the main items her clients spend on recruiting:
- Fully Loaded Personnel Costs
- ATS Annual Licenses
- LinkedIn Licenses
- Online Presence: Employer Brand, Social Media, Glassdoor, etc.
- AI Scheduling
- Digital Interviewing
- Digital Job Analyzer/Text Analyer
- Career SiteBuilder
- Executive Search
- Other Job Boards
- Background Check Vendor
Brad Cook, the Vice President of Talent Acquisition at Intuitive, tends to break recruiting budget down into these 8 categories:
- People costs (FTE and contingent)
- Recruiting Tools (must have)
- Recruiting Tools (nice to have)
- Travel
- Search fees (if used)
- College
- Employee Referral Programs
- Programmatic Media Buying
Tim Sackett, President of HRU Technical Resources, breaks recruiting costs (beyond personnel) into these 4 groups with examples for each:
- Recruiting Tools (Sourcing – Loxo, texting – Canvas, etc.)
- Recruitment Marketing (Indeed, LinkedIn, Zip, career site, email, SMS marketing, etc.)
- Recruiting Expenses (background checks, assessments, etc.)
- Recruiting Travel (recruitment events, interview travel expenses, etc.)
A Longer List of Recruiting Budget Programs
Need a longer list of recruiting budget ideas?
SHRM’s 2017 Customized Talent Acquisition Benchmarking Report offers this up:
Diversity Recruiting: A New Budget Line Item
More and more employers are adding “Diversity Recruiting” to their recruiting budget.
Fintech startup Petal (97 employees) told BuiltIn:
“With our Series C [funding], we knew we’d be doubling the Petal team size within 12 months and viewed it as an opportunity to continue diversifying our employee base. So the people team made a detailed DEI strategy, which included a six-month budget of $50,000, and a 12-month plan of up to $70,000 more. Budgets included paid services like partnerships with DEI-focused recruiting agencies, sponsorships for organizations and conferences that support Black and Brown tech communities, workshops led by DEI and leadership experts and employer branding that targeted underrepresented groups.
But interestingly, we found that our biggest impact to date has come from internal efforts. We appointed our first diversity officer. There’s now a bonus of up to $3,000 when employees refer an underrepresented candidate to an open job at Petal.”
Recruiting Budget Bonus Tips
Here are some extra stats/tips that might be helpful to calculate how much you’ll spend on recruiting:
Reqs per Recruiter
- A dedicated internal recruiter can handle an average of 29 to 54 requisitions per year. Organizations without a dedicated recruiter should expect people who spend part of their time recruiting to handle about 20 reqs per year—source: SHRM.
- “Internal recruiters (recruiters who are employed by the company that is also hiring the candidates being recruited) probably hire, on average, about 100 people a year.” — Joel Winter, Director of Talent Acquisition GCG Financial (What’s the average number of hires for an internal recruiter per year?)
- “>10 to 15 technical/engineering hires per year could be considered outstanding compared to >60-70 non-technical hires per year.” — This will, of course, depend on the types of hires you’re making. — Nick Livingston, Co-Founder of Honeit Software, says (in the same article)
Recruiting Budget Worksheet Template
With the help of some recruiting experts and a recruiting budget template from Glassdoor, we have created a sample recruiting budget worksheet you can download.
WHY I WROTE THIS
(Editor’s note — We are grateful that many of the top employers in the world (including 12 Fortune 1,000 companies) have added Ongig’s Text Analyzer to their recruiting budgets. Thank you! Check out Ongig.com if you’d like to learn why.
Shout-outs
-
- Philip Ziman University of California, Santa Cruz
- Tim Sackett HRU Technical Resources
- How to Create a Recruiting Budget (Template Included!) (by Glassdoor)
- Downloadable Budget Template Form (by Glassdoor)
- Recruiting costs FAQ: Budget and cost per hire (by Nikoletta Bika)
- Lisa Youngdahl (HR Extraordinaire)
- Talent Acquisition VP Brad Cook
- SHRM’s 2017 Customized Talent Acquisition Benchmarking Report
- John Wilson, CEO of WilsonHCG
- SHRM’s Cost Per Hire American National Standard
- Bersin by Deloitte: U.S. Spending on Recruitment Rises, Driven by Increased Competition for Critical Talent (by PR Newswire)
