Budgeting for new staff? Here are some steps to help you through it

Employer advice

Recruitment of new staff can feel like a thankless task, one which many try to avoid. But with some pre-planning, and if you can look at a general budget it can make your recruitment process easier. Here are some tips on how you can start the budgeting process for new staff to join your team, and how BS Social Care can help you.

1. Check the requirements of all your departments

As the new financial year approaches, before starting the next year’s budgets, you need managers across the various teams and departments to give the details of their individual department’s recruitment needs for the coming year. This will consider the company’s peaks and troughs throughout the year, and whether they are looking for several temps to carry them through a busy period, or permanent staff to work throughout the year, or of course, an anticipated mixture of both.

You will also want information of the level and nature of the future positions, as this affects the cost of the employment. Depending on the roles there will be different salary expectations. 

2.Look to the past for a better future

Remember that along with budgeting for new positions you will also need to factor in the cost of replacing turnover of current staff within the organisation. Therefore, you may want to look at previous years’ figures, and to have a good understanding of how many employees could be expected to leave the organisation in the coming year. For example:

If the turnover rate on an average over the previous 3-5 years is 10%, and the total number of your employees is 1000, it means that 100 employees could be anticipated to leave the organisation over the next year. Therefore, if you are planning to hire 80 new employees, your actual anticipated new employee count increases to 180; 100 to replace employees who have left the company, plus a staffing increase of 80.

3.Estimating your basic recruitment costs

Recruitment costs usually refer to basic, and often recurring, expenses associated with the hiring and recruitment process. So, to work out the costs of recruiting new staff for the year:

  • Calculate your average cost per hire from the previous year.
  • Then multiply your average cost per hire by the number of hires you plan to make this year.
  • Add to your calculations all projected internal and external costs such as agency fees and training.
  • For permanent staff, be sure to add 30% to the total to fully account for benefits, taxes, NI, etc.
  • Also, include any contractor or part-time employees you plan to recruit during the year.

4. Calculating the extra costs

Remember to add into the calculations other various and miscellaneous items including:

  • The salaries for your present staff
  • Any pay rises due within the coming 12 months
  • Incentives/bonuses
  • Social media 
  • It / software costs
  • Travel, hotel expenses etc.
  • Enhanced dbs checks
  • Training

Ensure that your cost per hire does not increase without cause for any given year, and it should be in sync with inflation, revenue growth, and the number of hires.

While some companies need to additionally budget for the cost of advertising on jobs boards, many others prefer to leave recruitment to an external specialist agency, such as BS Social Care. Contact your local branch today, who will be happy to take you through services and solutions we offer and how we can manage the full recruitment process for you.

This blog was brought to you by Susanna Phillips from the Watford branch.