Hiring people costs money, and recruiting new employees for the workforce is an important business investment. Human resources experts estimate that it costs employers an average of $4,425 per hire. That’s a big expense for which recruiters are responsible.

Recruiters have to know how many employees need to be hired, what resources are needed to do so, and explain the funding needed to develop the workforce. Explaining the costs of recruiting in order to obtain the proper funding involves research, documenting the need and costs, and convincing leadership for authorization. Discussing the cost of a bad hire because of lack of resources is very convincing as well.

Do the Research

Don’t guess at numbers for hiring needs. Research what roles will be needed now and in the coming year. Talk to finance and operations, or whoever is tasked in your company with forecasting headcount. Document job requisitions. Don’t just note how many openings you’ll be filling. Also note what kind of roles they are, and how they impact revenue.

Document the types of revenue-producing roles you’ll be hiring for and the resources needed to recruit them. Also take into account recruiting expenses for resources including job boards, outside recruiters, and recruiting events. Look at historical recruiting data for costs related to candidate sourcing, cost-per-hire, and time to hire.

Know what recruiting and human resources experts say are average recruiting costs to compare against your historical data. For example, Bersin by Deloitte research found average U.S. cost per hire is almost $4,000, and it takes 52 days to fill a vacant position. Those are solid benchmarks to aim for or to show leadership that your record is better.

Additionally, a valuable presentation tool is knowing how to discuss the costs of a bad hire, backed by information from experts like SHRM. Human resources professionals like Arte Nathan of HR advisory services firm, The Arte of Motivation, know well the extensive cost of a bad hire. Nathan says a bad hire causes a ripple effect not just in the workforce, but companywide. SHRM says the cost of a bad hire can be astronomical.

Document the Need and Costs

Knowing the numbers and being able to present them to support your request for a bigger recruitment budget is key to a successful funding request. Make sure you know your cost-per-hire across different recruiting channels and focus on the ones producing the best results. If you have one job board getting the highest-quality candidates, plan to spend more there and pull back on lower performers.

Present the best recruiting results to leadership and discuss how spending more on these avenues can actually increase your return on recruiting dollars invested and possibly help you lower recruiting costs overall. Explain how spending money to improve employer branding produces better recruiting results. Show results from company career pages, social media avenues, and company culture.

More than half of Glassdoor’s users say they are motivated to apply to employers who have a great employer brand. LinkedIn shows that a positive employer brand has a positive effect on recruiting, including lowering the cost to hire. This is very useful information to use when making a request to spend more money on branding to support recruiting.

Selling It to the C-Suite

When you have the recruiting numbers and history, as well as statistics, you’ll be armed with the right information to back up your funding request. Real numbers will win over guessing every time. Convincing leadership to spend more money on recruiting is easier when you can show what that spending will produce.

Show that spending more to source candidates in sales and business development will result in more quality hires to subsequently increase sales and revenue. Discuss how the increased funding focused on successful recruiting avenues will improve recruiting results. Explain how improving employer branding improves recruiting.

It helps to remind leadership about the cost of a bad hire when pitching for funding to improve recruiting. The U.S. Department of Labor estimates that a bad hire can cost up to 30 percent of the employee’s salary. CareerBuilder says 74 percent of employers who say they hired the wrong person lost almost $15,000 per bad hire, and three-quarters of employers are affected by bad hiring.

Expert Tips

HR expert Dr. John Sullivan discusses factors to use when seeking recruiting funding. He says recruiters need to build a strong business case for increased recruiting budgets and they can do so with “critical budget approval factors” including total revenue impact of recruiting projects, direct impact on strategic goals, and framing recruiting problems as solving business problems.

Sullivan recommends using examples of superb results, what he calls "wow’s," if you have them, such as impressive recruiting results from developing your own recruiting software or generating a profit or surplus in recruiting. Focusing on recruiting super achievements can garner the attention and appreciation that can win funding. Another tip to get attention for recruiting funding is to frame it as preparing for the future.

By using expert tips, with real numbers showing how they impact the bottom line and recruiting results, you can look forward to gaining the increased funding you need.  

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