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Effective Strategies to Reduce Recruitment Costs

Effective Strategies To Reduce Recruitment Costs

Staffing costs refer to the expenses made by recruitment businesses or agencies that seek new employees through the hiring process. Recruiting new candidates can be expensive, often ranging from £100 to £200,000, depending on the type of talent you seek - which is why businesses turn on hiring freeze mode sometimes.

The harsh truth is that the brightest talent can come at a price. All businesses aim to hire the best talent on the market. After all, employees are the backbone of a company, determining its future and success.

Let's take a look into the division of costs made by staffing agencies and how to best optimize for productivity and efficiency.

1. Reducing operating costs

Many factors impact a business's bottom line, especially in an industry as volatile as recruitment. A rigid and detailed recruitment budget can fuel hiring while driving down costs. It's crucial to invest time to calculate where and when costs can be reduced so that you can be more economical, productive, and efficient.

Office space

If you are a recruitment business with less than ten employees, then it's worth thinking about office alternatives. Since COVID, we've seen small companies jump on this as it's a simple way to reduce high costs while keeping employees content.

With the price of houses, offices and apartments rising, renting is becoming more popular for smaller businesses. However, if you plan to grow your team, you'd be better off renting an office space in a co-working hub where you can work among other businesses.

Owning a large recruitment firm (75+ employees) can be challenging.

These companies usually have a lot of tasks to complete and do not always have the resources to work in a co-working space. Many recruiters find that working out of their homes is not the best option since distractions abound. The best solution is to work out of a corporate office where your company can access everything needed for work, including desks, coffee, phones, Wi-Fi, and more.

Equipment and tech

The recruitment process demands a lot of resources, tools, time… the list goes on. First, you need to source candidates, then run them through a selection process, and finally, keep your new hires motivated and productive. It's no wonder that employment agencies need many tools to get the job done.

Leveraging innovative recruitment tech can fuel your business quickly and significantly reduce costs. You can reduce spending on job boards by 88%, use social media to attract candidates and easily find top-quality candidates.


Recruitment marketing focuses on bringing talent to you rather than actively seeking out potential candidates. Effective recruitment marketing strategies cover a diverse set of tactics and tools to reach the most expansive pool of qualified applicants. Social media marketing is among the most popular across the recruitment board. It's proven to be highly effective and, more importantly… it's free!

Exciting stories and valuable posts on your social media can reach specific groups of people, such as those in your industry or with particular skill sets. To attract the right people, always be yourself, have fun, work hard, and be consistent on social media.

Many cost-effective methods should be considered when developing a marketing strategy.

Some include:

  • SEO optimize your website
  • Showcase your brand on social media
  • Engage with potential candidates on live chat
  • Leverage video marketing

2. Reducing recruiting costs

In this modern era, staffing agencies have started to evaluate hiring expenses in terms of cost per hire.

For a company, recruitment costs are usually divided by the total number of employees currently working. These costs can come from:

  • Job boards
  • Internal recruiter costs
  • Website maintenance
  • Inductions

Modern recruitment software can significantly lessen these costs.

Optimizing staffing levels

Some businesses will reduce the number of employees as they believe it is a sure way to reduce costs. However, employee shortages can drive up overtime costs and cause employees to feel demotivated. Conversely, hiring too many employees can also damage your business. It's essential to have a solid overview of your business, to make decisions focused on productivity, efficiency, and cost reduction. Effective workforce management sees companies perform their best without the emphasis being solely on decreasing costs.

Hire qualified employees

The first step to finding qualified candidates is to have a complete understanding of the business' expectations, job role and responsibilities. Often sourcing the ideal candidate can be an extremely time-consuming process. There are many ways to reduce costs throughout the hiring process. This can be done through screening by optimizing video recruitment tools to understand your candidates and their intentions better.

Identify areas where staffing is needed

If your client is feeling the weight of their budgets and looking to reduce recruitment costs, it's crucial to discuss productivity and other opportunities for improvement. Are certain employees taking on too much work that they cannot reasonably handle? Make sure they know that increasing staffing in targeted areas can lead to higher productivity and avoid unnecessary expenses. Identifying any bottlenecks or inefficiencies within an organization is essential before recruiting new employees.

Optimize your job ads

Job ads are a necessary part of the recruiting process, but they can be expensive. If you're not careful, you can spend more money than you need. One way to reduce recruiting costs is to optimize your job ads. You need to show candidates what you want, what skills you need and what you can bring to your candidates. By taking the time to craft well-written targeted ads, you can save money by attracting only the most qualified candidates.

Easing the administrative burden

Manually creating schedules is a time-consuming, admin-intensive process. It's inefficient as schedules are forever changing. Modern recruitment software is a great tool that helps create less work for recruiters to reduce staffing costs for recruitment agencies. You can connect with payroll systems directly and automate manual-intensive tasks.

3. Conclusion

Recruitment agencies are forever seeking methods to reduce operating and recruiting costs. Implementing these tips and tricks can drastically improve your bottom line. The recruiting sphere is becoming increasingly competitive. However, one way to stay on top is to leverage recruitment software. Automation is not just a trend; it's an effective way to keep staffing costs down while still maintaining high-quality standards.


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