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Tips on the use of financial forecasting in recruitment

Tips on the use of financial forecasting in recruitment

And you may ask, what is the point of having the financial forecast in a hiring process? Well, this should be the first step you need to take into account to know whether or not you can hire a new talent for your team.

In this blog we’ll tell you some things to keep in mind when you’re forecasting the cost of your new hire.

Be clear about the concepts for organizing the financial forecast in the recruitment process

To talk about financial prevention we must be clear about some basic concepts such as treasury, so you will know if you can hire a new person in your team.

Treasury

Also known as cash flow, is the area of the company, within the financial department, in which all the cash flow of a company is managed and organized,

And what is cash flow? It’s the cash in and out.

Table of control of Treasury

It is a complete summary of your company’s cash flow inputs and outputs over a given period.

Depending on the size of the company, the cash flow table may be very simple or very complex with many items within a period of time (weekly, monthly, quarterly).

In the control table we will reflect all forecasts of inflows and outflows of money in the short, medium and long term

Being honest when making decisions

After reviewing your organization’s treasury, it’s important to be realistic. Many entrepreneurs act with the impulse of projects and not with the reality of finance.

It should always be borne in mind that a selection process and the hiring of a new member have different costs in the short and long term.

In this way, we must always take into account the financial forecast towards the future, wondering if in a few months you will still have enough resources to support the new hiring.

Some data to consider are the salary, social security, the personnel selection agency, implements and tools of work of the new employee, among others.

Choose the type of profile to hire

Understanding from the start what profile you are looking for and what you can hire is very important. The profiles you can find are:

Operating

It is the one that will not generate income directly, but will accelerate the transition to obtain new functionalities, goods, services, or cover basic needs of the company, such as administrative tasks.

Keep in mind that the profiles are adapted to the business model of each company, because in another situation an administrative employee may generate income directly.

Box generator

These types of employees are those who increase or generate quantifiable and easily traceable income directly, such as signing a contract with a new customer.

Knowing the costs of hiring

Now comes the time to get down to the paper, and to the cash flow chart & projections, the costs both direct and indirect derived from such incorporation.

Thus the expenses to consider are:

Direct

  • Salary
  • Taxes
  • Spanish Personal Tax Income

Indirect

  • Hardware
  • Software
  • Furniture
  • Other expenses

And you, have you used financial forecasting in your hiring processes?

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