Make the Most of Your Job Advertising Budget
Many business leaders struggle with the budget process each year, perhaps none more than those in talent acquisition. They attend conferences, keep abreast of the latest trends and seek counsel from consulting firms. Often they create projects only to find that the funds are unavailable. No budget increase. No new initiatives. No innovation.
As a marketer with 15 years of experience, the annual budget has become a challenge I look forward to. Many times the process involves the take-over of a department by a new leader. In this scenario I have learned that in order to get the initiatives you want executed within your mandate, you often need to get creative with your budgeting by making room. The same process I have used over the years in the marketing world can easily be applied to talent acquisition.
The largest obstacle I have encountered, budget-wise, has been within advertising and lead generation, or in the case of recruiting, the funnel of candidates to open positions. The best advertising programs in the marketing world use multiple channels for reaching an audience (print, online, e-mail, social media, trade shows, search engine marketing). Similarly, talent recruitment strategies use a multichannel approach (job search engines, job boards, social media, job fairs).
The biggest opportunity for making room in your budget is in advertising. The reason for this is something I call “the legacy approach” to budgeting. This is when your approach to ad spending remains unchanged from year to year because it appears to be effective on the surface. However, this is rarely the case, because your return on investment is being assessed as a group of advertising activities, not by individual actions, initiatives or channels. Few leaders actually audit the results by line item, and they miss an opportunity to spend strategically.
The following strategies may be common sense to many. Sadly, we often forget common sense or basic initiatives in our race to manage existing strategies and keep up with the competition. The three steps below are effective tools for every talent acquisition leader to undertake not just once, but on a regular basis, in order to keep their budget on track.
1. Audit Your Advertising Channels
Allocating your budget towards a job board, social media or similar channel without knowing the return on investment is dangerous. This is also the first place to find savings you could be allocating towards new initiatives. One of the initial steps you should undertake is an audit of the previous year’s spending and the number of candidates received. If you can further measure the number of hires from each advertising channel you are in even better shape.
Evaluate each supplier, determine the per-hire or per-candidate costs and, if possible, benchmark it to other companies. If you cannot compare these metrics to other companies, at least look for any odd performance levels or spending across your mix of advertising channels. If one or more suppliers have a per-hire or per-candidate cost significantly higher than the others, flag them for review.
Many people would stop at this step and simply eliminate the advertising channel that was the most expensive. However, you can’t only look at costs as factors for eliminating spending. You also need to look at your audience and goals.
2. Re-Align Advertising Channels and Spend Strategically
The second major activity I highly recommend is an analysis of the roles you are recruiting for and the various advertising channels you utilize to reach them. In marketing, we would use the argument that not all customers are the same. Some customers spend more than others and a good marketer is willing to invest more to access a customer with a greater lifetime revenue value than a one-time transactional consumer.
Clearly the same can be said about the roles for which you are hiring. Entry-level or transactional roles (receptionists, customer service agents, servers) are often less challenging to recruit than specialized roles (engineers, accountants, salespeople). It would not be economical to spend the same amount of money on advertising for these two groups.
Unfortunately, many use a single channel to reach everyone, regardless of the role or degree of challenge. To make more room in your budget, you should segment these roles and spend strategically. Look at your current advertising channels and the volume of candidates each one delivers. As part of your annual resource planning process, identify the roles you know will require higher budgets and allocate funds accordingly. If you can move your less challenging roles into a more cost-effective advertising channel, do so. The savings can be reserved for other projects in the coming year.
3. Test New and More Cost-Effective Advertising Channels
The final piece is to look at lower-cost alternatives. With a greater understanding of your current spending and a segmented audience based on the roles you need to strategically target, it makes sense to look at new solutions. Remember, a lower-cost solution doesn’t always mean lower quality, especially when you are aligning the right job to the right channel.
If you are currently relying on one or two advertising channels, now is the opportunity to try new, more cost-effective platforms to evaluate their capabilities. For example, if you currently use job boards for all of your open jobs, regardless of the role, you should test some new channels to see if you can deliver savings. Try using a job search engine such as Simply Hired, and use your previous per-hire or per-candidate spending from a job board as the benchmark. Set performance goals and, more importantly, measure them.
A recent independent study by Forrester Research showed that Simply Hired delivered quality candidates at less than half the cost of the two leading job boards. Think about this for a moment. If you can reallocate a percentage of your advertising spending from job boards to Simply Hired, you could be saving over 50 percent of your overall budget to reach these candidates. Depending on the size of your budget, this could be a significant amount to pay for new initiatives.
Budgeting Wisdom In Action, An Example
I recently had dinner with a colleague who is an HR leader at a major company. She had a mandate to introduce a strategic branding initiative within her department, but she struggled to get the funds approved by the CFO. The proposed program was expected to cost over $120,000. For the short-term, she wanted to allocate $30,000 to the development of the formal program strategy using a third-party consultant. Sadly, her budget was so tightly allocated to other items that she had no money to spare.
We later discussed her current job advertising spending. With job boards representing 70 percent of her $150,000 per year advertising budget, we estimated together the potential for finding the money needed for the consulting fees. Roughly 60 percent of her hiring plan for the new year included roles where the use of job boards did not make economic sense, given salaries and volume. By moving these specific roles to Simply Hired, we estimated that her savings for the year would be $45,000.That would be enough to allocate funds to her branding strategy project with some additional money left over for social media tests, as recommended by the consulting firm.
The point I’m aiming to deliver is that budgets are often designed based on what was done the year before. As such, it’s a missed opportunity for those who struggle with implementing new initiatives based on cost. You are missing out on an opportunity if you don’t apply metrics and benchmarks to your spending, identify cost savings without sacrificing quality, spend strategically or try new methods.
Nothing impresses a CFO during the budget review process more than initiatives that maximize spending to generate greater ROI and productivity. It certainly helps the following year when you ask, cup in hand, for any increases. After all, if you were able to increase your output by 40 percent with your existing budget, the pitch for an increase becomes much more palatable to someone who is focused on the bottom line.
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