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What’s the Ideal Breakdown for Recruiting Spending?

How could we figure out an ideal percentage for allocating our recruitment spending? We presently spend about 30 percent of our recruiting budget on search functions, 25 percent on advertising, 35 percent on referrals, and 10 percent on boomerangs. Does this sound reasonable?

— Math Problem, HR manager, wholesale trade, India

April 29, 2014
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Related Topics: Global Recruiting, The Latest, Dear Workforce, Recruitment
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Dear Math Problem:

Don’t get frustrated by my response, but the ideal allocation is the one that best serves the needs of your organization. In other words, base your funding formula on specified talent needs.

A recruiting budget is like a pyramid: You build it from the ground up.

It is hard to imagine an allotment formula that could be duplicated across the board and provide favorable results to all stakeholders. While at first glance your percentages seem reasonable, your focus is backward. Your best approach is to identify and rank your priorities in order of the greatest need.

You list some important pieces of the puzzle, such as SEO and advertising. Your first step should be to evaluate the effectiveness and return on each of these investments. Look for glaring holes in the process — needs that go unmet. One obvious example is advertising: Is it delivering the results you anticipated? If not, you should adjust your actual advertising budget or rethink your advertising placement.

Repeat this analysis across all your recruiting modes. Build the pyramid from the ground up, first laying the groundwork, then identifying the layers of need that are most pressing. Only then are you able to ideally allocate your precious recruiting dollars.

SOURCE: Deborah Millhouse, president, CEO Inc., Charlotte, North Carolina, April 21, 2014

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