One of the biggest barriers when it comes to buying recruitment software is the price. It can also be tricky to get a proper breakdown of what’s involved as most suppliers have different ways of doing things, not to mention the number of different costs involved in buying a CRM.
The cost of recruitment software can vary depending on a number of factors including its level of functionality, the size of the supplier, how many licences you require and what pricing model they offer. There’s also a number of additional costs you might have to contend with.
There are predominantly two different pricing models in the software space. Back in the day, purchased licences were the most popular way for businesses to buy recruitment software where you’d outright purchase a licence when you sign up then just pay a yearly support fee. This would often cost you between £500 and £2,000 for a licence but if you committed to your supplier for a long time then it would work out as the most cost-effective option.
Nowadays, it’s more common to pay for recruitment software on a monthly basis like a subscription but there are a few different ways that suppliers can offer this model.
Per-user licensing (or concurrent)
This type of licensing offers unlimited flexibility when it comes to how many users can be created within the software and how many users can access the software at any given time.
For example: 50 per-user licences would mean that you can have unlimited named users, but only 50 of them would be able to access the software at any given time (concurrently).
This type of licensing is far more limited than the former and will generally restrict how many logins can have access to the software.
For example: 50 per-seat licences would mean that up to 50 individually named users can access the software.
There are also less traditional methods of calculating prices such as pay-per-hire and pay-per-Recruiting Manager.
With a subscription, prices vary from roughly £20 to £100 per user per month without factoring in all the extra costs below. You may also find some suppliers offer a variety of packages based on the level of functionality you require where you can opt for more basic software or the all-singing, all-dancing version. Another reason why a supplier might offer more than one price is because they have more than one deployment option. For example, itris 9 has two solutions, on-premise and cloud, which have different price points.
You will find with some suppliers that they have different cost brackets based on the number of users you require. For example, the more licences you take, the cheaper it will cost per licence.
Alongside the core recruitment CRM, you will also find suppliers provide a range of additional tools, products and integrations with third-party suppliers. It should come as no surprise that most of these will be an additional cost and something you will need to factor into your budget. Depending on the tool or integration, you might have to pay a one-off fee or a monthly subscription and maybe even additional support/training costs.
With certain types of software such as server-based applications, there is likely a one-off cost for installation and configuration which can vary from the hundreds to the thousands.
Not all agencies will need a data migration but for the ones that do, you need to be prepared for the cost that comes with it (you will likely have to factor this in to your budget). The size and complexity of the data and time required to complete the migration will all be key factors in the cost which can vary from a few hundred pounds to several thousands.
Another big consideration is that your current supplier might actually charge you to get your data back from them. This figure can be in the thousands and almost make it seem financially impossible to change system at times.
Some recruitment CRMs will require you to do your own research to find a hosting provider if the supplier themselves can’t host it and you don’t have the infrastructure to do so. This is usually an additional monthly charge and can range from £25 to £85 per user per month, depending of the complexity and virtual infrastructure required.
It’s always worth checking if your subscription entitles you to free regular software updates or whether it’s an additional cost you have to pay for.
One of the most critical services for you as a customer is your supplier’s service desk, helpdesk, technical support team or whatever you want to call it. This can either set you back a couple of hundred pounds per user per year or it’ll be included in your monthly subscription. Either way, it’s a cost you can’t argue with!
With the amount of free resources available these days to teach users how their chosen recruitment software works, it’s not essential to pay for training courses. However, it is a worthy investment if your staff are going to stick around and seriously utilise the knowledge to their advantage. For a day with a trainer, you could be paying between £500 to £2,000 for a small group of delegates but cheaper options could include online training instead. Some suppliers also offer paid for or sometimes free training webinars.
You may see this long list of costs, roll your eyes and think “there’s no way I’m paying that” but as a recruitment business, one of the most important investments you’ll ever make is your software and spreadsheets or free CRMs will only take you so far. Do your due diligence, budget effectively and negotiate!