How to Overcome Budget and Funding Cuts in Recruitment

More than half (56%) of UK recruiters now struggle to secure sufficient recruitment funding, according to recent TotalJobs research. The average time to hire has nearly doubled to eight weeks from 4.8 weeks last year, while a separate survey found that half of all employers report shrinking hiring budgets.

The organisations navigating this successfully aren't spending more; they're spending smarter. By exploring alternative talent pipelines and eliminating recruitment waste, they're achieving higher retention rates and lower cost-per-hire than traditional methods deliver. 

In this blog, we’ll explore practical strategies to rethink your recruitment approach, from streamlining bloated workflows to leveraging alternative pipelines that traditional hiring overlooks.

Why Budget Cuts Are Here to Stay

The 2024 Autumn Budget fundamentally changed the economics of hiring in the UK. Employer National Insurance contributions increased from 13.8% to 15%, while the threshold dropped from £9,100 to £5,000. 

Combined with the National Living Wage rising 6.7% to £12.21 per hour for workers aged 21 and over, 82% of organisations now report higher total payroll expenses. When companies cite cost management pressures and weaker financial results as primary concerns, recruitment budgets become an obvious target.

But cutting recruitment spending creates its own risks. As Olive Turon, head of people and culture at TestGorilla, notes in an interview with HR Magazine: "During financial uncertainty, the biggest risk isn't the recruitment cost, it's the massive, hidden cost of a bad hire." 

According to a survey by PageGroup’s Enterprise Solutions, recruitment inefficiencies and unfilled vacancies will cost the UK economy at least £132.6 million in lost productivity over the next year, with each empty role costing approximately £1,000 per week in lost productivity.

Rethinking Your Recruitment Strategy

Focus on value over volume

Most traditional recruitment agencies charge 15-30% of a candidate's first-year salary, meaning a £50,000 hire costs between £7,500 and £15,000 in fees. When budgets are tight, it’s worth asking if these costs deliver proportionate results.

Instead of measuring activity, focus on outcomes: cost-per-quality-hire, time-to-productivity, and 12-month retention rates. This shift naturally leads to more strategic hiring practices that prioritise sustainable results over transactional recruitment.

Streamline your process

When time-to-hire nearly doubles, as it has from 4.8 to 8 weeks, it's a signal that processes need simplifying. Businesses collectively lose an average of nine working weeks to recruitment inefficiencies.

What does this mean for you? Audit your workflow to identify bottlenecks. Which approval stages add genuine value? Streamlining means removing waste, not removing quality control.

Identify and eliminate waste

Not all recruitment spending delivers equal returns. Job boards charging £250-£500 per posting may generate hundreds of applications, but few quality candidates.

Conduct an ROI assessment to discover which channels consistently deliver hires who perform well and stay. Which of these consumes budget without proportionate results? Your data should guide these decisions rather than assumptions or habit.

Leverage Alternative Talent Pipelines

One of the most effective responses to budget constraints is broadening the pool of talent you look to. Building long-term relationships with community organisations can provide consistent access to pre-screened, supported candidates at a fraction of traditional agency costs.

With 1 in 4 of the working-age population having a criminal conviction, organisations like Offploy work with employers to access underutilised talent pools and connect them with candidates from these overlooked pools. The results speak for themselves: according to The Ministry of Justice, 86% of employers rate these hires as good at their job, with companies like National Grid achieving 96% retention rates. 

Compare that to traditional recruitment: Timpson's 75% retention rate for ex-offenders significantly outperforms the 50% average retail turnover. Beyond retention, 92% of employers report that diverse recruitment has enhanced their reputation and helped win new contracts.

Offploy's 7-step methodology provides a practical framework for organisations looking to hire from these talent pools, emphasising preparation, process, and ongoing support. These candidates bring skills, motivation, and often a level of commitment that candidates in conventional pipelines may lack.

The financial case is compelling. Beyond lower cost-per-hire, you're accessing candidates who demonstrate higher loyalty. Hiring from alternative talent pools reduces turnover costs, which is critical when replacing an employee. Using the National TOMs framework (NT5), each hire from inclusive talent pools generates £24,527 in social value, increasingly relevant for organisations pursuing social value targets in public sector contracts.

Adopt an Inclusive Hiring Mindset

When budgets shrink, it’s worth asking: why are we limiting our talent pool? Many hiring barriers, from overly specific qualifications to unnecessarily restrictive background checks, exist through habit rather than necessity. Building a strong business case for inclusive hiring starts with examining your job descriptions.

This approach directly addresses budget constraints by expanding your candidate pool, which naturally improves both quality and cost-efficiency.

The True Cost of Inaction

Unfilled roles create a cascade of problems: overtime costs, team burnout, delayed projects, and diminishing quality. Over 720,000 unfilled jobs are currently holding back UK economic growth. For individual organisations, each day a role remains unfilled represents lost productivity and compounding pressure on existing staff.

Cutting recruitment budgets feels like saving money, but if that "saving" leads to prolonged vacancies, poor hiring decisions, or high turnover, you're actually losing money. You've simply shifted when and how those costs appear.

Moving Forward

Budget cuts don't have to mean accepting recruitment failure. They can force the kind of strategic rethinking many organisations need anyway: questioning assumptions, eliminating waste, and focusing on the outcomes that matter. Start with one area, audit your current spending against actual outcomes, explore one alternative talent pipeline, or review your existing processes for unnecessary complexity. Each step can reveal opportunities to do more with less.

Smart recruitment investment now prevents higher costs later. If you're ready to explore how inclusive hiring practices could address your recruitment challenges while reducing costs, Offploy's 7-step methodology provides a practical framework. The organisations already on this journey aren't doing it out of charity; they're doing it because the business case is compelling and the talent is there.