Future proof your TA team: How TA leaders can reduce costs and stay ready for the upturn

While the New Year brings new budgets, the need for cost containment still prevails as TA leaders watch and wait for hiring to return.  

It’s been a challenging few years for those of us in talent acquisition as traditional hiring patterns have been replaced by increasing volatility. As a talent acquisition leader, you would have had to manage unprecedented hiring surges; be cost-conscious in periods of lower demand; and simultaneously tackle the more strategic TA priorities like skills-based hiring, internal mobility, and digitalisation of your post pandemic processes. 

It’s been a tough balancing act. 

More recently as hiring volumes have plummeted in face of economic headwinds many TA leaders have found themselves faced with high fixed costs, too many recruiters on their payroll and a model that cannot respond to ongoing market volatility. It’s a far cry from the recruiter shortage of just two years ago!

If that sounds familiar, then you will be under real pressure to cut costs. But your team needs to be ready to ‘flick the switch’ and start hiring quickly when the upturn happens while continuing to implement a next-level strategic agenda so your organization can compete for in-demand talent.

So, is it possible to do both? Cut costs across your day-to-day operational activities and focus on the evolving strategy you’ve already heavily invested in? There are several strategies that can help.
 

Take action for efficiency and optimization now

Too often, in ‘feast and famine’ recruitment climates, TA teams are forced to be reactionary. Strategy is pushed into second place while you use up all your energies scrambling for resource. An important first step to prevent this is to get clarity on the business strategy and what you and your team needs to deliver against it. 

Here’s how.

1. Align your TA goals with the wider business strategy.
   Your organization is likely to have realised the impact of the talent acquisition function over recent years as a strategic enabler to a series of key organisational objectives, giving you a more permanent seat at the table. Make use of this to understand how TA can best support your business’ strategic initiatives so you can focus your precious resource and time.
   
   Does your organization need ground-breaking tech skills to help it evolve? Is the ambition to be the best employer in your sector so the most in-demand talent wants to work for you? Is it to build critical skills across key strategic roles? Do you need to consider developing certain locations (such as India) over others? Is optimizing DEI a major factor? Or having an early in careers strategy?
   
   Whatever the challenge or opportunity, align your foundations in a way that can be scaled more easily and use the hiring slowdown to align your goals so that you’re best placed to deliver when the upturn comes. 
    
2. Take stock of your operating model
   Once you are clear on your agenda, review your TA operating model and consider where you can increase and drive efficiency while ensuring you have the critical skills to deliver your goals.
   
   Perform an in-depth diagnostic review to identify areas for optimisation. These might include how you source, attract and engage candidates. It might include analysis of your fixed costs; how much recruiters are paid, where they are based and their relative productivity for that spend. It might be focused on how your technology is, or is not, enabling the efficiency you need or how you embed AI. It might be all of these, and more.
   
   Practise skills-based hiring techniques with your own TA teams. Consider where and how you could deploy the recruiters you’ve already invested in across the goals you’ve identified. Think about how you can create dexterity within your TA team that aligns with your business’ strategy, such as expertise in digital recruiting or DEI.
    
3. Understand the costs of delivery
   Take a deep dive into the cost of your delivery. Many organizations have simply been struggling to meet demand over the past few years and have had little time to consider the financial ramifications.
   
   Thinking strategically about your costs is vital. You need to scrutinize all component costs and identify where your fixed costs are sitting so you can understand how to deliver in a more cost-effective way. As TA leaders we’ve long since looked at agency expenditure but now is the time to dive deeper and tackle those less visible and often hidden costs that impact ROI.
   
   Your aim should be to incorporate the ability to flex and contract appropriately, ensuring people are in the right locations with the right overheads. Striking the balance between lower fixed costs with greater adoption of flexible cost outlets may be a great place to start, reducing your financial burden when hiring volumes are low, but giving you the agility to scale appropriately when demand is high. 
    
4. Stand back and consider your findings objectively 
   Once you’ve diagnosed the opportunities, you’ll be able to see more clearly what steps you need to take to take to reach your goals. Reject the urge to be ‘busy’ in how you respond to these challenges and instead focus on a clear and measurable plan.
   
   It might be that outsourcing elements of your recruitment makes sense, so that you can move some costs from fixed to variable and scale up and down as needed. There could be some processes that you need to automate, or that you’ve overinvested in, duplicative tech that isn’t driving the ROI you intended and it’s time to consolidate. It might be that you need to change the structure of your TA teams so that the right work is allocated to the right level of person. 
   
   Every TA Leader wants to approach cost reductions sensitively. But when approached with a strategic mindset, well-implemented cost reductions can be truly transformational. It’s an opportunity to better align your team with the business priorities; increase productivity; focus your senior people on the most value adding activities; and drive forward your strategic agenda. 
   
   Necessity is the mother of innovation. Embracing the challenges of the current market landscape provides a unique opportunity to refine and evolve. Position your TA organisation to be ready for the unexpected with improved operational delivery aligned to your strategic priorities. 

Case study: An outside perspective on an in-house model 

AMS was brought in by a large financial organization to help them cut costs in their talent acquisition team. 

Through a diagnostic review, AMS identified that their large in-house TA team was structured inefficiently. Instead of a pyramid-shaped operating model, where most of the work is aligned to lower levels of the function, the organization had a diamond -shaped structure which meant that too many senior people were doing too many of the repetitive transactional tasks, and many of these people were based in high cost UK locations. 

The business had also under-invested in technology. This meant expensive headcount increases were the only way they could scale.

When benchmarking against the competition we found that hiring costs at this organization were three times more than their peers, while productivity was slightly behind the market.

We created an extensive financial business case for a new operating model and structure for their TA team. We built a roadmap to help them make the changes in the most seamless way possible. We are now working with them to put that plan into action. As a result, the organization is set to save just shy of £20 million over the next three years. All it took was the benefit of an external lens on an in-house model.

Need help to cut costs?

If you’re looking to improve the efficiency of your TA function, AMS can help. We’ll run a diagnostic on your TA function to help you identify where you might be able to reduce costs while keeping focus on your strategic priorities.  And we’ll provide a clear and actionable roadmap to inject greater scalability and agility into your TA model. 

To have a conversation with me or one of the other experts in our Advisory team, please get in touch.