Employers squeeze recruitment budgets as jobs cost more to fill

Recruitment budgets are coming under pressure with more than half of all employers trying to cut costs, while staff shortages mean many jobs are proving increasingly expensive to fill, research shows.

The fifth annual HR Prospects survey, by Personnel Today’s sister title IRS Employment Review, found that 52% of employers are currently trying to reduce their recruitment costs – rising to 63% of public sector employers.

At the same time 73% of employers also admit that they are having recruitment problems – forcing many to re-advertise hard-to-fill posts or turn to recruitment agencies for help at additional cost.

The survey of 431 organisations shows that employers are turning to e-recruitment (36%), negotiating better terms with agencies (28%) and reviewing their advertising practices (17%) to cut costs.

This year’s key findings show that:

  • HR’s top priority for the coming year is to deal with new legislation banning age discrimination from October – cited by 74% of respondents
  • Other widely mentioned priorities include training (71%), absence management (71%), employee retention (66%) and recruitment (64%)
  • More than half (56%) of all employers have reviewed starting salaries over the past year

Employers are becoming increasingly interested in formal reward strategies which link the whole package of pay, bonuses and benefits with performance.

Mark Crail, IRS Employment Review’s managing editor, said: “Employers are no longer as optimistic as they have been in recent years that recruitment will become easier. Even so, they appear determined to ensure that their organisations can recruit and retain people with the right skills.

“We have seen this year an unprecedented level of activity as HR departments seek to get the best value for money from recruitment and other staffing budgets by negotiating better deals and adopting more effective recruitment practices.”

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