It’s that time of year when most of us in talent acquisition just got that fresh new budget for the year. While most of it will be earmarked for stuff we already have, it’s always exciting to think about some new things we can bring on board — and there might even be some things you use it for that you haven’t even thought about yet.
So how do we make sure we’re spending that money in the right way? Well, this caught my eye: some fascinating research from Aptitude Research looking specifically at corporate talent acquisition budgets.
The findings were both somewhat shocking and somewhat expected to me. One of the first things that hit me when looking at this research report was the reality that most TA leaders don’t have long-range visibility into our budgets. Almost all of us have a one-year view or less. It’s very rare for a TA leader to have visibility beyond a year (as corporate budgets tend to go), yet we are constantly told to think long-term about our talent strategies.
The problem here is that if you have workforce plans and strategies that your executives are building that are a few years down the road, but no budget, how exactly do you accurately prepare for that? Well, you better be sitting down with your CFO and their team to develop, at least, cursory budgets that are beyond a year in length, especially if you foresee growth or major technology changes happening (hello, AI!).
It’s very rare for a TA leader to have visibility beyond a year (as corporate budgets tend to go), yet we are constantly told to think long-term about our talent strategies.
Here’s another big one from the report: “Currently 64% of TA leaders fear they will face budget cuts this year, and 1-in-3 believe their existing budget is being wasted.”
Let’s start with our budgets getting cut each year. Get ready for an unpopular opinion! If you don’t have major change or growth happening, then some combination of these three things is happening: you’re 1.) optimizing your processes, 2.) upgrading your team. and 3.) utilizing your current technology to its fullest. In this case … your TA budget should be cut — that’s just how leadership works. In your role, you should be expected by your organization to gain efficiency, increase productivity, and reduce costs year over year.
On the other side, if 33% believe their TA budget is being wasted, this is a real problem. It’s not exactly a “you problem”, but it’s also kind of a “you problem”. Now, we all get saddled with bad contracts that we need to work our way out of as we take on new TA leader roles, or maybe it was our own doing, and we have to live with it before we can make it better. So, some waste is understood in the short term. My hope for the third of leaders who felt this way is that they’re doing everything they can to tackle that waste.
Interestingly, TA investment has been on the decline for the past four years, which kind of makes sense. Prior to the pandemic, hiring was super difficult. Then, the pandemic made it worse, so we saw massive investment in TA before and right after. Then, most of them used the new technology investments and actually hired better. In 2025 and beyond, we now have a new opportunity with all the AI hiring tools that are being developed, so I suspect we will see another bubble of spending in TA, and budgets will rise again for this kind of investment.
What are we spending our budget money on in TA? Really, it’s two things: Stuff that makes our recruiters more efficient and stuff that improves the quality of the folks we bring in.
We want to hire our future employees as fast as we can, and we want to hire the best people possible. The data from the report is crystal clear on this! DEI hiring tech has fallen by the wayside in a big way (in terms of investment, not importance).
Another headscratcher that came out of the report was why TA teams replace solutions. The number one reason was the price! I don’t know about you, but this is absolutely mind blowing to me. The only reason you replace your recruiting technology should be, “It didn’t freaking work!” And then the other reasons come into play. I would rather have the most expensive solution on the market that works than keep running around buying the lowest-cost solution just to replace it again and again. This speaks to the short-term nature of our budgets and our decision making around talent. This must change.
I could write a million words on this report, but I’ll spare you that and just share a few of my main takeaways here:
- If you want better budget control, work on longer-term budgets with your finance partners. Try to get out of the year-to-year budget cycle.
- Align your TA budget with corporate business talent imperatives; it’s way harder for someone to cut that!
- Finally, build in hard recruiting measures that show a black and white return on investment in your talent acquisition technology.
If you’re involved at all in budgeting — building it or spending it — then you should just go download this for yourself. Hit me up if you have any questions. I have some great ideas of where you should spend your money.
