5 ways to reduce recruitment spend on a shoestring budget (reading time 6 mins). Part 1

Who is this for?

This guide is for companies planning low-volume recruitment over the next 12 months. You may have no in-house talent attraction capabilities and minimal budget/appetite to invest in one. Historically, when vacancies arise, you may have relied on referrals, personal networks, and recruitment agencies.

Why it’s beneficial

I’m sharing actionable tips based on my 20 years' recruitment experience as a Head of Talent as well as an agency recruiter, to help you minimise recruitment spend so you can channel resources elsewhere.

This goes beyond financial cost

Recruitment costs typically fall under the agency fees bucket. The CIPD recently found that 59% of UK businesses have used recruitment agencies. With the average recruitment fee being around 20% of base salary, costs can start to add up. 

However, let's also factor in the time commitment involved in hiring as well (and how attention could be channeled elsewhere) along with the commercial impact of a no or delayed hire. 

5 things you can action today:

1) Begin by asking yourself some tough questions

• Do I know if people like working here?

• How is employee morale?

• What do my employees really say about the company?

• Would our best leaver recommend us?

• What’s the average tenure?

Why: Good internal vibes naturally strengthen your talent attraction.

How: Ideally, you already have a rhythm for capturing employee satisfaction data to address issues early. If not, consider:

1. Regular pulse surveys

2. Stay interviews (not just exit interviews)

3. Anonymous feedback channels

4. Team health checks / retros

5. Monitoring hidden signals (absenteeism, Glassdoor reviews, etc.)

Tip: Develop your own rating system from 0 (terrible) to 5 (exceptional). Anything 3+ is manageable; below that, it signals a broader issue worth addressing today impacting more than just recruitment.

2) Reduce the need to hire in the first place

Why: If you hire less you spend less! If you consider that around 25% of open positions are to replace a leaver, try and improve your retention rates. Not only will you save money on the process of finding a replacement but will also minimise the impact of lost productivity, onboarding expenses, background checks, team morale etc...

Data point: the Society for Human Resource Management (SHRM) estimates that the total cost of replacing an employee can be as high as 50-200% of the employee’s annual salary. 

How: Focus on retention. Create a company people don’t want to leave. Average tenure is 3-4 years; in tech, sometimes less. As a baseline, aim for 2 years. If your average tenure is 18 months or less, ask why.

Ways to improve retention (covered in more depth elsewhere):

• Offer flexible working arrangements

• Define your mission and ensure employees feel part of it

• Conduct regular pulse checks and stay interviews

• Pay market rates with a robust salary review process

• Foster a culture of internal mobility

• Provide structured career paths and reward loyal performers

• Invest in L&D and experience diversification

• Iterate on benefits, be creative and find your USP

3) Evolve your agency relationships

Why: You may still need agencies if you lack in-house capabilities, so optimise the relationship for both sides. Treat them as a partner rather than a supplier. 

How: 

• Lean into the data if you have it. Map out what agencies are producing the best quality of hire. This will inform what agency relationships you want to cultivate. Drop the others. You now have your target preferred supplier list (PSL). Nothing is stopping you from going outside of this if you need to in the future. 

• Negotiate! Contact two agencies. Explain you are creating a PSL and ask what the lowest rate they will provide to be part of that. Be prepared to walk away if they don't show flexibility. Then, identify one preferred agency and explore what further movement they will offer for a period of exclusivity.

• Develop a partnership relationship with that agency. Invite them for a coffee, let them see your offices, immerse themselves in your culture and values and know intrinsically what good looks like and your expectations of a supplier.

• By only engaging with one agency initially (say for 1-2 weeks), you make them accountable to deliver, send a clear and consistent voice to the market and streamline the process. Hungry agents can contact 100s of candidates on your behalf. It helps raise your brand and is free marketing plus they hopefully find you a candidate. 

4) Cultivate your digital footprint

It’s likely you do not have a marketing team at the moment but that shouldn’t stop you from creating and enhancing your online presence. 

Why: 70-80% of candidates research your company before applying and certainly before accepting offers.

How: Be consistent, authentic, and transparent across:

• LinkedIn: Share updates, milestones, Q&As, social events, diversity stats, thought leadership. Encourage employees to contribute and engage.

• Glassdoor: Reply to all reviews; consider encouraging employees to leave honest feedback. This requires careful handling around the why.

• Careers page: Keep it updated with authentic content showcasing culture.

Pro tip: Video content is underutilised - be creative and different.

5) Improve your recruitment processes

Why? There’s nothing worse than getting a good candidate in your pipeline only for them to drop out due to a sloppy interview experience, slow feedback loops, process bottlenecks and indecisiveness. Things you can control. 

A slick recruitment process reduces your drop out rate, increases time to hire and enhances your conversion rates. 

How:

• Forecast your hiring goals by creating a hiring roadmap. This gives you space and time to architect the process and be less reactive

• Be clear in your mind(s) on what you need and why and make sure everyone in the process knows. Thoughts can evolve but too many pivots frustrate the process 

• Remind yourself and the team how you want to be perceived and drop the ego – good interviews should be two way.

• Define the interview stages and build the question bank process. Try and ensure standardisation by creating an interview content repository that you can build on and tweak. (Tip, don’t over manufacture the process. 3 stages is absolute max. Consider for the final stage less conventional interviews like “a working session on a real life scenario (perhaps anonymised) to see how candidates think and behave in the moment.)

• Identify who the key stakeholders are in the process and what their roles are

• Define and document the decision making process

• Collectively agree to light touch SLAs i.e., we will input feedback 24 hours after an interview etc…

• Start to block out space to review CVs and do interviews. 

If you've got this far, well done! You will be rewarded by saving some money if you action some of these steps. Change won't happen overnight but small consistent steps will yield results.

Look out for 'Part 2' of this basic guide where I cover more ground.

I will also be producing two elevated 'power up' and 'boss mode' guides around this theme. So much to cover!

If you don't want to wait, reach out for a free discovery call so we can discuss bespoke recommendations for your company and growth journey. 

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Hi, I'm James Preselo. I am a fractional Head of Talent and founder of TalentJP - advising scaling SMEs on their talent attraction strategy. I help build in-house talent attraction capabilities that you own. A more sustainable, scalable and cost efficient approach to hiring in today's market. From a one day fix to a complete process transformation, with 20 years' recruitment experience across agency and in-house, i've got you covered. 

Get in touch: james@talentjp.com 

My website: www.talentjp.com