Tight recruitment budgets prompt a radical overhaul of hiring processes at UK firms

HR professional conducts meeting with a job applicant in an open plan office space.
(Image credit: Getty Images)

HR departments are increasingly using technology to help cut the costs of recruitment, according to new research from HR management company, HireVue.

Analysis from the firm showed financial pressures and the changing expectations of candidates are leading to a big shift in hiring strategies at enterprises across the UK.

Economic constraints, the report found, have forced nearly half of firms to cut hiring budgets over the last 12 months. To compensate for this, around one-third said they have increased tech budgets in the hope of streamlining processes, targeting candidates more effectively, and ultimately finding cost savings.

Meanwhile, to fill vacancies and avoid external recruitment fees, 44% are promoting from within, and more than half said they are actively seeking to attract and retain mature workers.

"This strategy not only saves on recruitment costs, but also fosters employee engagement and loyalty," said Tom Cornell, senior A/O psychologist at HireVue.

"By embracing mature workers and internal mobility, businesses can access a wider talent pool, build a more diverse workforce, and gain a competitive edge in a very competitive job market."

According to the report, more than half of HR professionals believe that automation significantly streamlines efficiency so that candidates can be hired quickly, with half stating it reduces tedious manual tasks.

AI tools gain traction, but firms should be wary

Nearly half (45%) of respondents specifically highlighted the benefits of artificial intelligence (AI) tools in streamlining recruitment processes. The study noted that the technology has drastically improved efficiency and automated traditionally laborious tasks. 

However, caution is advised, according to the report. The use of AI recruitment tools has caused issues in the past. Amazon was forced to scrap automated recruitment tools in 2018 after they were found to be discriminatory toward female applicants.

Because it had been trained on previously-successful CVs - which mostly came from men - it taught itself that male candidates were preferable to women and downgraded CVs if it found words such as ‘women's’, while penalizing graduates of all-female colleges.

More recently, Workday's AI-based recruitment system faced criticism after it was found to have discriminated against an applicant on the basis of his race, age, and mental health.

The HireVue report warned of these risks, and advised that those using AI in recruitment should make sure that they have auditable and explainable processes that allow them to demonstrate fairness.

The firm also advised that HR professionals should make sure they adhere to regulatory requirements on privacy and security.

Only 34% of organizations polled by HireVue said they have an internal team dedicated to assessing the compliance of such products, and only two-in-ten said they have sent requests to vendors for compliance documentation. More than a quarter have done nothing.

"When asked how confident they are that their current vendors can meet the AI standards, over half of them said they were confident," the report said.

"To mitigate risks, companies should conduct comprehensive assessments of vendors they’re interested in, ensuring they follow ethical AI practices, regularly audit algorithms, and prioritize safety and fairness throughout.”

Emma Woollacott

Emma Woollacott is a freelance journalist writing for publications including the BBC, Private Eye, Forbes, Raconteur and specialist technology titles.