In 2024, 29% of TA teams faced budget cuts, and another 19% are expecting reductions in 2025. Talent Acquisition leaders are constantly being challenged to hit big and expanding sets of goals, but with increasingly limited resources. This and potentially next year, leaders have to decide not just how to cut costs, but to do so strategically in a way that preserves their team’s core operations and doesn’t damage long-term success for short term gains. 

Here at Veris Insights, we’ve compiled a set of practical steps for cost-cutting efficiently without undermining your Talent Acquisition function’s future, drawn from dozens of conversations with TA leaders and benchmarking data.

Tiered Approach for Strategic Budget Reductions

Mandates to cut budget are stark immediate challenges that often demand equally immediate action. However, this pressure for speed and decisiveness can sometimes cause leaders to fall into the trap of sacrificing long-term efficacy for short term gains. While leaders agree that effective budget adjustments should always be driven by an understanding of the trade-offs, translating that policy to concrete action is difficult. 

To break this problem down, budget decisions can be categorized into three tiers based on their impact and reversibility.

1. Lean But Clean

These cuts involve shifting to lower-cost processes and scaling back on marginal expenses. The goal is to streamline operations while still maintaining critical functionality. These involve resources that have a lower ROI, including travel for in-person events and employee referral programs.

2. Strategic Trade-Offs

At this stage, you need to make more nuanced decisions. Identify areas where performance may be impacted, but the trade-offs are maximally acceptable and reversible. This could involve scaling back on non-core initiatives that are nice to have but aren’t critical to day-to-day operations, such as technology vendors or contingent workforce.

3. Cutting Muscle

The last and most severe option involves cutting areas that are central to the function of the team. These cuts are avoided unless absolutely necessary, as they can be exceptionally costly and time-consuming to reverse. Think tenured recruiters or key university partnerships that take years to build.

Evaluating Budget Priorities

Assessing which areas to cut comes down to understanding where efficiency can be maximized and which cuts will have the least long-term impact. While there’s no single silver bullet for budget cutting well, the following framework is a helpful guide for evaluating your Talent Acquisition budget:

By taking a strategic approach to budget management, TA leaders can trim expenses without sacrificing their ability to attract top talent. The key is making decisions that keep the organization’s long-term success in mind while maintaining the flexibility to reactivate important programs when conditions allow.