How to Create a Detailed Recruitment Budget [With Template & Examples]

Recruiting new people is exciting. But, the additional costs that come along with it? Not so exciting.

In fact, these costs can be dreadful if you have not planned a recruiting budget to keep a bull’s eye on your overall costs.

Recruitment Budget Template

That’s what we have:

put a detailed guide on the 6-step process to create detailed recruiting budget sheet
created a free recruiting budget template downloadable for you to get started

Download the budget template

What is a recruitment budget?

A recruiting budget is the financial plan adopted by businesses and human resources teams to manage all the expenses related to hiring processes. This includes:

posting jobs
investing in tools and services like ATS, assessments, video meeting software
using external recruitment agencies
doling out bonuses for referral programs.

For example, if your organization invests in job posting platforms, and recruitment tools like skills assessment and video interview software, and conducts employer branding events, then you need to calculate the overall costs for these activities.

These activities are handles by the HR department. A specific amount of money is allocated to each HR manager for these activities. They need to inform the HR department before making these investments so they can approve them and keep in the records.

Essential components of a recruiting budget

Drafting a recruitment budget goes beyond just looking at how much you want to spend on job ads. Consider the following critical components:

Job advertising: Allocate funds for platforms like LinkedIn, job boards, and niche industry sites.

Recruitment technology: Include costs for Applicant Tracking Systems (ATS), AI recruiting tools, and other software that streamlines the process.

Talent sourcing: Set aside funds for strategies such as headhunting, talent pools, and referral programs.

Candidate experience: This encompasses costs related to improving the interviewing experience, like travel reimbursements, meals, or gifts for candidates.

Training and onboarding: Consider the resources needed for onboarding new hires, including training programs, workshops, and materials.

Background checks: Budget for third-party services that conduct background verifications, drug tests, etc.

Recruitment events: Whether it’s hosting job fairs, attending university recruitment drives, or setting up booths at industry conferences, there are associated costs.

Agency fees: If you’re using a recruitment agency or external consultants, their fees need to be accounted for.

Internal costs: Think of HR salaries, office supplies specific to recruitment, and other overheads.

Miscellaneous and contingency: Always set aside a portion of your budget for unforeseen costs or opportunities that might arise.

How to create a recruitment budget

Step #1: Calculate the number of hires

The primary expense for any organization: its employees. Before starting with the math, get on board all the managers to understand their requirements in terms of new hires in the coming year.

Circulate a sheet similar to the following one and ask all stakeholders to fill it. This will help you understand how many new hires they may need in the coming year.

Based on this data, the recruitment cost analysis can be done more accurately.

Team/Qtr	Q1	Q2	Q3	Q4	Total
Engineering	12	22	14	19	63
Sales	6	7	12	3	28
Operations	2	4	4	1	11
Marketing	3	9	14	7	33
Administration	5	8	8	4	25

Along with these number, you will need

Expected designation: Knowing if the roles are for interns, managers, senior managers, etc. will help estimate what the likely expenses, both quarterly and annual, are for specific teams.
Skills: In case you need to collaborate with external agencies, having a good idea about the niche skill sets your organization is looking for help; also, you might have to start this process early.

According to Sharon Jautz, Head of HR, WGSN

Not accounting for the length of time role will stay open. I have a rule: If you have met with at least 10 candidates and the role is still open, you need to reevaluate the role, decide if you need it and reevaluate your interviewing criteria.

Along with these numbers, what is needed to be taken into account is the turnover rate for each team and for the organization. The HR team needs to have a good understanding of how many employees would be leaving the organization in a particular year.

So, if the turnover rate is 10% and your total employee count is 2000, it means that 200 employees would be quitting the company next year. Hence, if you are looking to hire 160 new employees (from the above table), your actual count increases to 360. 200 for employees who have quit and 160 new employees.

Going back to past few years number and calculating turnover (If you do not have the number refer to average turnover over rate for industries from the web) for each team, give you an exact measure of the number of hires you would be hunting for in the coming year.

Step #2: Estimate basic recruitment costs

Recruitment costs refer to basic expenses associated with the hiring and recruitment process. These expenses are mostly recurring and often billed early in the year.

This cost may vary for each organization, but you have to consider common expenses across boards to have rough estimates.

Job boards: They are a great starting point to draw attention from candidates, and are frequently used by major corporations. For example, Cutshort, Indeed, LinkedIn and Stack Overflow.
Salaries: Occasionally, teams collaborate with contract-based recruiters and agencies on yearly basis. Don’t forget to add their salaries too.
Employee branding: Branding campaigns, career page optimization, and video campaigns—these are just a few ways you can amplify your employer brand and educate employees about why they should work in your organization.

Look at the following sheet to understand better.

How to create a recruiting budget, recruiting budget, recruiting budget for 2019, recruitment budget — **Detailed sample template shared below**

Also read: Nirvana Solutions uses HackerEarth Assessments to Reduce Cost Per Hire by 25%

Steps #3: Calculate the fixed cost

Fixed cost are costs associated with your recruitment process happens yearly and is usually processed in an orderly manner like salaries, partnerships, recruitment agencies, etc.

Internal Salaries: Calculate internal salaries for existing employees. Make sure to add your HR team. The rules say for every 50 employees you should have 1 HR. Budget your internal salaries accordingly. Also, take into account the expenses if you are looking for new team members.
Partnerships: Calculate the cost of any yearly partnerships which you plan to commit to. These partnerships can include an external recruitment agency, event agencies, social media promoters, and others.
Recruiting events: Make a list of all upcoming virtual recruiting events like conferences you plan to take part in, in the near future and budget them in your sheet.

As Neil Williams from AVI-SPL says

I found that fees associated with events such as job fairs including air travel and lodging can be easily missed. Remember to think of each event from start to finish and all the necessary logistics involved.

External recruiting agencies: Most of the companies tie up with external recruiters agencies or independent recruiters who help them hire candidates, especially for niche skills. Think of the approximate number of hires you plan to make for the year. Factor in the cost associated with each hire (paid to the external recruiter) when you prepare the budget.

Step #4: Estimate recruiting technology costs

Technology is a great enabler. As HR evolves with enabling technologies like talent assessment software and video interviews, companies can expect better recruitment and overall management.

Coding assessment software

While candidate sourcing is managed by multiple agencies, job portals, and social channels, it is imperative you evaluate candidates on the right parameters. Coding assessment tools like HackerEarth Assessments helps reduce hiring costs by 10X.

Companies have also been using HackerEarth talent assessment software for university hiring by evaluating candidates remotely—reducing large cost (travel, stay, man-hours, etc.) associated with campus placement.

Also read: 5 Best Practices for an Effective Hybrid Campus Hiring Strategy

Video interview software

While assessing candidates can be managed by technical interview software, an organization should evaluate the candidate in person before selection. However, candidates are often scattered across the globe and the cost associated with their travel becomes too high. This is where video interview software like EasyHire and Kira Talent comes in.

HackerEarth’s coding assessment software is accompanied by video interview software called FaceCode, which helps you assess candidates on their real-time coding skills while interviewing them. Since these features are bundled, there are more savings to be had!

Background check service

A background check is an essential service used by organizations to verify a candidate’s credibility. Major global organization work in this field and charge relatively high fees in verifying all the relevant information.

With the increasing usage of social media and networking, referral hiring is a good way to save on the background check service. Calculate the cost accordingly.

Pre-boarding software

Candidate pre-boarding has evolved a lot over the last few years. With multiple options in hand, candidate ghosting has been a major menace for the recruiters. It is extremely essentials to keep your candidates way before joining, helping them understand their role, responsibility, and progression.

Companies using pre-boarding software have seen reduction in drop-off by more than 45%. Some of the top pre-boarding software available are Beamfox, BoardOn, Talmundo.

Application tracking system (ATS)

Application tracking systems have not evolved much since their inception in the mid-90s. But due to high dependency on them, most of the organizations still prefer to have a good part of their expenses dedicated to ATS.

Application tracking systems help follow the entire journey of a candidate, from sourcing, interviewing, joining, to exit. Some of the top ATS across the globe are Taleo, Greenhouse software, iCIMS, JobVite.

Also read: Remote Work and Recruitment: An ATS Story

Step #5: Estimate your miscellaneous hiring costs

Tying in the ROI on the unexpected expense with the broader strategic HR and/or organizational plan helps get stronger buy-in for unexpected added costs

Ensure you make allowances for miscellaneous expenses that pop up frequently in your hiring cycle. A few expenses relate closely to the internal campaigns you decide to run with referral bonuses taking up the major chunk.

Next, average out all incentives paid in the last two years to have an approximate idea about the budgeting for incentives to be rolled out in the appraisal cycle. It is essential to keep a check on inflation and the industry-standard before zeroing in on a certain amount.

Some companies regularly offer bonuses to their employees, sometimes in the festive season or when the business has had a great year. Discuss with the leadership on the target goals, and any bonus roll-out in case targets are achieved.

Step #6: Calculate cost per hire

And the most important step, calculate the cost per hire before finalizing the budget. If you have a previous budget to refer to the cost per hire for earlier years, then calculate expected expenses for the coming year.

According to Neil Williams, HRBP, AVI-SPL

Calculate it by adding the actual recruiting expenses from last year and divide by the number of hires you made. Then, multiply your average cost per hire by the number of hires you plan to make this year. Add all projected internal and external costs.

The basic formula for cost per hire is

Cost per hire = Internal Cost + External Cost / Total Number of Hire

Make sure that your cost per hire should not increase exponentially for any given year and should be in sync with inflation, revenue growth, and a number of hires.

Tips for managing tech recruitment budget

Here are some tips for managing your tech recruitment budget effectively throughout the year:

Plan ahead: At the beginning of the year, take some time to plan out your hiring needs for the year. This will help you to estimate how much money you will need to spend on recruitment.
Set a budget and stick to it: Once you have a good understanding of your hiring needs, set a budget for recruitment. Be sure to include all of the relevant costs, such as job postings, advertising, recruiter fees, and background checks.
Track your spending: It is important to track your spending so that you can stay within your budget. This will also help you to identify areas where you can save money.
Use free and low-cost recruitment tools: There are a number of free and low-cost recruitment tools available. For example, you can use social media to post job openings and to connect with potential candidates. You can also use free job boards, such as Indeed and LinkedIn.
Partner with recruiters: If you have a lot of open positions, you may want to consider partnering with a recruiter. Recruiters can help you to find qualified candidates and to manage the hiring process. However, it is important to note that recruiters typically charge a fee for their services.
Invest in employee referrals: Employee referrals are a great way to find qualified candidates. Encourage your employees to refer their friends and colleagues for open positions. You can also offer incentives for employee referrals.
Hire for soft skills: Soft skills, such as communication, teamwork, and problem-solving, are just as important as hard skills in the tech industry. When hiring, be sure to assess candidates’ soft skills in addition to their hard skills.
Negotiate salaries: When negotiating salaries, be sure to factor in the cost of living in the area where the candidate will be working. You should also consider the candidate’s experience and skills.
Offer competitive benefits: In order to attract and retain top talent, you need to offer competitive benefits. This includes benefits such as health insurance, paid time off, and retirement savings plans.
Review your budget regularly: It is important to review your recruitment budget regularly to make sure that you are on track. You may need to adjust your budget based on changes in your hiring needs or the market conditions.

Plan your recruiting budget effortlessly

Make sure that your cost per hire should not increase exponentially for any given year and should be in sync with inflation, revenue growth, and a number of hires. Download a sample budgeting sheet for the coming recruiting year.

HACKEREARTH – TECHNICAL RECRUITING SAMPLE BUDGET SHEET

Revolutionizing Mobile Talent Hiring: The HackerEarth Advantage

The demand for mobile applications is exploding, but finding and verifying developers with proven, real-world skills is more difficult than ever. Traditional assessment methods often fall short, failing to replicate the complexities of modern mobile development.

Introducing a New Era in Mobile Assessment

At HackerEarth, we're closing this critical gap with two groundbreaking features, seamlessly integrated into our Full Stack IDE:

Now, assess mobile developers in their true native environment. Our enhanced Full Stack questions now offer full support for both Java and Kotlin, the core languages powering the Android ecosystem. This allows you to evaluate candidates on authentic, real-world app development skills, moving beyond theoretical knowledge to practical application.

Say goodbye to setup drama and tool-switching. Candidates can now build, test, and debug Android and React Native applications directly within the browser-based IDE. This seamless, in-browser experience provides a true-to-life evaluation, saving valuable time for both candidates and your hiring team.

Assess the Skills That Truly Matter

With native Android support, your assessments can now delve into a candidate's ability to write clean, efficient, and functional code in the languages professional developers use daily. Kotlin's rapid adoption makes proficiency in it a key indicator of a forward-thinking candidate ready for modern mobile development.

Breakup of Mobile development skills ~95% of mobile app dev happens through Java and Kotlin — This chart illustrates the importance of assessing proficiency in both modern (Kotlin) and established (Java) codebases.

Streamlining Your Assessment Workflow

The integrated mobile emulator fundamentally transforms the assessment process. By eliminating the friction of fragmented toolchains and complex local setups, we enable a faster, more effective evaluation and a superior candidate experience.

Old Fragmented Way vs. The New, Integrated Way — Visualize the stark difference: Our streamlined workflow removes technical hurdles, allowing candidates to focus purely on demonstrating their coding and problem-solving abilities.

Quantifiable Impact on Hiring Success

A seamless and authentic assessment environment isn't just a convenience, it's a powerful catalyst for efficiency and better hiring outcomes. By removing technical barriers, candidates can focus entirely on demonstrating their skills, leading to faster submissions and higher-quality signals for your recruiters and hiring managers.

A Better Experience for Everyone

Our new features are meticulously designed to benefit the entire hiring ecosystem:

For Recruiters & Hiring Managers:

Accurately assess real-world development skills.
Gain deeper insights into candidate proficiency.
Hire with greater confidence and speed.
Reduce candidate drop-off from technical friction.

For Candidates:

Enjoy a seamless, efficient assessment experience.
No need to switch between different tools or manage complex setups.
Focus purely on showcasing skills, not environment configurations.
Work in a powerful, professional-grade IDE.

Unlock a New Era of Mobile Talent Assessment

Stop guessing and start hiring the best mobile developers with confidence. Explore how HackerEarth can transform your tech recruiting.

A New Era of Code

Vibe coding is a new method of using natural language prompts and AI tools to generate code. I have seen firsthand that this change makes software more accessible to everyone. In the past, being able to produce functional code was a strong advantage for developers. Today, when code is produced quickly through AI, the true value lies in designing, refining, and optimizing systems. Our role now goes beyond writing code; we must also ensure that our systems remain efficient and reliable.

From Machine Language to Natural Language

I recall the early days when every line of code was written manually. We progressed from machine language to high-level programming, and now we are beginning to interact with our tools using natural language. This development does not only increase speed but also changes how we approach problem solving. Product managers can now create working demos in hours instead of weeks, and founders have a clearer way of pitching their ideas with functional prototypes. It is important for us to rethink our role as developers and focus on architecture and system design rather than simply on typing c

The Promise and the Pitfalls

I have experienced both sides of vibe coding. In cases where the goal was to build a quick prototype or a simple internal tool, AI-generated code provided impressive results. Teams have been able to test new ideas and validate concepts much faster. However, when it comes to more complex systems that require careful planning and attention to detail, the output from AI can be problematic. I have seen situations where AI produces large volumes of code that become difficult to manage without significant human intervention.

AI-powered coding tools like GitHub Copilot and AWS’s Q Developer have demonstrated significant productivity gains. For instance, at the National Australia Bank, it’s reported that half of the production code is generated by Q Developer, allowing developers to focus on higher-level problem-solving . Similarly, platforms like Lovable enable non-coders to build viable tech businesses using natural language prompts, contributing to a shift where AI-generated code reduces the need for large engineering teams. However, there are challenges. AI-generated code can sometimes be verbose or lack the architectural discipline required for complex systems. While AI can rapidly produce prototypes or simple utilities, building large-scale systems still necessitates experienced engineers to refine and optimize the code.

The Economic Impact

The democratization of code generation is altering the economic landscape of software development. As AI tools become more prevalent, the value of average coding skills may diminish, potentially affecting salaries for entry-level positions. Conversely, developers who excel in system design, architecture, and optimization are likely to see increased demand and compensation.
Seizing the Opportunity

Vibe coding is most beneficial in areas such as rapid prototyping and building simple applications or internal tools. It frees up valuable time that we can then invest in higher-level tasks such as system architecture, security, and user experience. When used in the right context, AI becomes a helpful partner that accelerates the development process without replacing the need for skilled engineers.

This is revolutionizing our craft, much like the shift from machine language to assembly to high-level languages did in the past. AI can churn out code at lightning speed, but remember, “Any fool can write code that a computer can understand. Good programmers write code that humans can understand.” Use AI for rapid prototyping, but it’s your expertise that transforms raw output into robust, scalable software. By honing our skills in design and architecture, we ensure our work remains impactful and enduring. Let’s continue to learn, adapt, and build software that stands the test of time.

Ready to streamline your recruitment process? Get a free demo to explore cutting-edge solutions and resources for your hiring needs.

What is Systems Design?

Systems Design is an all encompassing term which encapsulates both frontend and backend components harmonized to define the overall architecture of a product.

Designing robust and scalable systems requires a deep understanding of application, architecture and their underlying components like networks, data, interfaces and modules.

Systems Design, in its essence, is a blueprint of how software and applications should work to meet specific goals. The multi-dimensional nature of this discipline makes it open-ended – as there is no single one-size-fits-all solution to a system design problem.

What is a System Design Interview?

Conducting a System Design interview requires recruiters to take an unconventional approach and look beyond right or wrong answers. Recruiters should aim for evaluating a candidate’s ‘systemic thinking’ skills across three key aspects:

How they navigate technical complexity and navigate uncertainty
How they meet expectations of scale, security and speed
How they focus on the bigger picture without losing sight of details

This assessment of the end-to-end thought process and a holistic approach to problem-solving is what the interview should focus on.

What are some common topics for a System Design Interview

System design interview questions are free-form and exploratory in nature where there is no right or best answer to a specific problem statement. Here are some common questions:

How would you approach the design of a social media app or video app?

What are some ways to design a search engine or a ticketing system?

How would you design an API for a payment gateway?

What are some trade-offs and constraints you will consider while designing systems?

What is your rationale for taking a particular approach to problem solving?

Usually, interviewers base the questions depending on the organization, its goals, key competitors and a candidate’s experience level.

For senior roles, the questions tend to focus on assessing the computational thinking, decision making and reasoning ability of a candidate. For entry level job interviews, the questions are designed to test the hard skills required for building a system architecture.

The Difference between a System Design Interview and a Coding Interview

If a coding interview is like a map that takes you from point A to Z – a systems design interview is like a compass which gives you a sense of the right direction.

Here are three key difference between the two:

Coding challenges follow a linear interviewing experience i.e. candidates are given a problem and interaction with recruiters is limited. System design interviews are more lateral and conversational, requiring active participation from interviewers.

Coding interviews or challenges focus on evaluating the technical acumen of a candidate whereas systems design interviews are oriented to assess problem solving and interpersonal skills.

Coding interviews are based on a right/wrong approach with ideal answers to problem statements while a systems design interview focuses on assessing the thought process and the ability to reason from first principles.

How to Conduct an Effective System Design Interview

One common mistake recruiters make is that they approach a system design interview with the expectations and preparation of a typical coding interview.
Here is a four step framework technical recruiters can follow to ensure a seamless and productive interview experience:

Step 1: Understand the subject at hand

Develop an understanding of basics of system design and architecture
Familiarize yourself with commonly asked systems design interview questions
Read about system design case studies for popular applications
Structure the questions and problems by increasing magnitude of difficulty

Step 2: Prepare for the interview

Plan the extent of the topics and scope of discussion in advance
Clearly define the evaluation criteria and communicate expectations
Quantify constraints, inputs, boundaries and assumptions
Establish the broader context and a detailed scope of the exercise

Step 3: Stay actively involved

Ask follow-up questions to challenge a solution
Probe candidates to gauge real-time logical reasoning skills
Make it a conversation and take notes of important pointers and outcomes
Guide candidates with hints and suggestions to steer them in the right direction

Step 4: Be a collaborator

Encourage candidates to explore and consider alternative solutions
Work with the candidate to drill the problem into smaller tasks
Provide context and supporting details to help candidates stay on track
Ask follow-up questions to learn about the candidate’s experience

Technical recruiters and hiring managers should aim for providing an environment of positive reinforcement, actionable feedback and encouragement to candidates.

Evaluation Rubric for Candidates

Facilitate Successful System Design Interview Experiences with FaceCode

FaceCode, HackerEarth’s intuitive and secure platform, empowers recruiters to conduct system design interviews in a live coding environment with HD video chat.

FaceCode comes with an interactive diagram board which makes it easier for interviewers to assess the design thinking skills and conduct communication assessments using a built-in library of diagram based questions.

With FaceCode, you can combine your feedback points with AI-powered insights to generate accurate, data-driven assessment reports in a breeze. Plus, you can access interview recordings and transcripts anytime to recall and trace back the interview experience.

Learn how FaceCode can help you conduct system design interviews and boost your hiring efficiency.