Allocating your talent-acquisition budget

So many recruiting options available mean so many budgeting decisions. How much money should be spent on a social media platform, an on-demand staffing company, headhunters, RPOs, agencies, inbound recruiting, and other channels?

To provide some advice on making these budgeting decisions, we asked Chicago-based Jacqueline Kuhn of HRchitect, a selection/implementation/consulting firm. We also took the opportunity to find out where she’s seeing talent-acquisition budgets increase and what line items are shrinking.

We're talking about how you allocate talent-acquisition dollars. How do you decide that? Do you have any advice on making those decisions? 

I have this concept that I share with our clients — and our clients are beginning to adopt it — that recruiters are just a different type of business partner and are a part of the whole talent-planning process, conversation, so that they are proactive and understand what lies ahead. 

We take a look at what we believe we need to bring into the organization. What skills? What people? Where would we be finding them? Or do we think we can find them on our own? 

When you understand what your organization is looking to hire, then you can go out and hire someone or do the research yourself to figure out where these people are or what else you need to do [to find them]. 

Do you need to buy sourcing technology that goes out and crawls the internet and brings people back who are interesting? Do you need these other technologies that strategically place ads for you where the people you are looking for are searching on the internet? 

You've got to spend money on advertising because you need a presence for people to know who you are. That's never going to stop. We have some very core key jobs in our service delivery where the people aren't on LinkedIn. They're not going to be on Indeed. They're not actively looking. And so we pay third parties to find them. 

There are many vehicles to spend your money, aside from the traditional job posting or third-party person who you can hire. It’s really a balance based on where you think you're going to find people and who you really need. 

As well as what it costs? 

Somewhat. When we're working with folks, we don't always just look at the cost to fill. We also look at the cost to remain empty. If you look at the cost for someone to not be in the job and compare that with the cost to fill, you come up with what you truly need to spend, particularly if it's a revenue-generating job. It may be a much higher cost to remain open than spending the money to get somebody in more quickly.

I don't know of anyone today who is not investing in recruiting technology or services of some sort. Every client we talk to is investing money in the recruiting process, from sourcing to offer to onboarding, whether it be in technology, people, or event marketing in certain industries. And there aren’t enough avenues to explore to find people with so many jobs open and available. With some verticals like health care, it’s super crazy to find folks. Again, it's really a matter of: what does it cost if you can't find them? 

This leads us perfectly into the next question – where do you see people spending money now and where are they not spending as much these days. 

They're not spending as much on the actual ads on job boards, aside from hourly hires, with Indeed. People have been dialing back on that because there are so many other channels. 

They're also not spending a lot of money on video interviewing, like recording a person on a video. Maybe they were crucial during COVID, but now people are actually talking to people via video as opposed to sending out a recorded video request. 

The last channel where I believe they're spending more money than they did before is in communications. Whereas a couple of years ago, I would say less than half of the people we talked to were doing text recruiting, now just about everyone is. 

Even if they were doing it, they're spending more. They're realizing that if they don't spend on texting, they're losing out. So the whole SMS cost, which is pretty expensive, has definitely gone up. 

They're not spending money on paper marketing. Even when they go to events, they don't have paper applications. They don't have brochures. It's a QR code to a website. 

So they’re taking away the traditional, manual things and now spending money on the technology that is replacing them. 

You talked about replacing some of the technologies. How about the people stuff, like the RPO, the headhunter, the staffing agencies, temp agencies? 

Those are strong as ever, if not stronger. So much legislation has passed that defines what a temp is versus what an employee is. Bringing in a temp agency as opposed to doing it on your own is a much safer way to go. So RPOs, temp agencies, third-party recruiters doing your sourcing – all of that is absolutely continuing to increase in spend.