6 Signs You Need To Transform Your HR & Recruitment Functions

94% of the HR and Recruitment Leaders we surveyed for our Vision 2025 Report: A Guide To Future Trends In Recruitment & HR are planning some form of change of transformation within their HR and/or Recruitment functions in 2025. This is likely to be driven by the sheer volume of external factors which have forced change up to the top of people agendas including cost pressures and changes in employment legislation, not to mention how difficult it is to attract and retain the right talent.

Our upcoming Fireside Chat, Charting Change: Strategies to Evolve HR and Recruitment Functions in 2025, on Tuesday 25th February 2025 with CEO Jeanette Ramsden and COO Kelly York, will explore this in more detail. Sign up here to take part.

So, what are the key warning signs that you need to change or transform HR or Recruitment in your organisation?

1. Difficulty Attracting and/or Retaining Talent

We’ll start with the obvious one. If your business is struggling to attract the right talent, or is experiencing high turnover, it’s often a warning sign that something isn’t working as it should. It remains a tough landscape for employers, with candidates more informed and selective about their career choices than ever before.

Investing the time in analysing your current operational models, processes and practices will enable you to transform HR and Recruitment to ensure you can not only deliver, but also retain the talent your business needs to meet its wider strategic objectives.

Are you confident in your employer brand and how it’s being perceived by potential talent? Is your recruitment process smooth, transparent, inclusive and effective? Do your Hiring Managers know how to make sound, fair hiring decisions? Once your new starters join, do your onboarding, induction and development programmes provide the opportunities they need to thrive (and want to stay) in your organisation? What is your employee experience like? These are just some of the areas where your processes may need to be adjusted in order to attract and retain talent.

Don’t have time to audit your existing processes and identify opportunities for improvements? We can help.

Find out more about our process audit services here.

2. Cost Pressures

You may need to identify opportunities to reduce spend. Thanks to the impact of inflation and rising interest rates on business operating costs 69% of businesses have had to secure additional funding to help alleviate cash flow problems. The impact of the changes to Employers National Insurance Contribution rates which will come into effect from April this year will be further adding to cost base and financial pressures. As an example, a business with 80 employees (on an average salary of £40,000) will need to find an additional £80,000 to cover their increased NIC bill.

Where is that going to come from in what is no doubt already a tight operational budget?

Do you know what you are truly spending on HR or Recruitment? Are you confident that you are fully in control of your costs? Is your operating model delivering the most cost-effective output for you? A change to your delivery model may be needed to release the cash you need to comply with the new regulations.

We can help you to identify your true recruitment outgoings and identify areas to make savings with our Recruitment Spend Audit.

3. Your Are Worried About Non-Compliance

Several changes to employment legislation came into effect in 2024 and, according to Labour’s Employment Rights Bill there are many more on the horizon – you can read more about this in our blog. Given the scale and pace of change, there are real risks for businesses that do not keep up and comply with these new rules as they come into force. Of course, these changes also require a considerable amount of time to execute, placing even more pressure on internal teams.

Whilst recruitment rates have continued to slow down in the UK, utilisation of temporary workers is increasing and understandably so. It’s a sensible approach when businesses still need access to additional skills and capacity but can’t afford to increase their permanent headcount. However, utilising temporary workers is not also without it’s risks, due to the myriad of rules and regulations which need to be adhered to. Non-compliance with regulations such as IR35, The Criminal Finances Act and GDPR can come with costly penalties as well as reputational damage.

If you aren’t confident that you know exactly how many temporary workers are in your business, or that your current processes are compliant, this can be a real sign that you need to make changes. We can help.

Find out more about our Temporary Workforce Audit.

4. Too Many Mistakes Are Being Made

Sadly, working at – or over – capacity can often lead to mistakes. In Recruitment processes, this could present itself in the form of struggling to fill roles, compromising on the ‘right’ person due to time restraints, making errors in offer letters, contracts, and so on. In HR processes, slower response times, lack of consistency and less time to be proactive can quickly have a negative impact on performance, and as a result, damage the perception of the function internally. These struggles are all signs that something isn’t right within your function and looking to transform HR and/or Recruitment could be the answer. This is only further compounded by the fact that people functions are being looked upon to become more of a strategic enabler (as they should) and less transactional, but how can you make this happen if your team is already stretched and bogged down in the detail?

Change and transformation of your operational delivery model, that’s how!

Find out more about our Change and Transformation Service.

5. Your Technology Is Not Helping 

We’ve all heard it said that technology is power, and in the world of Recruitment and HR that really is true, with 31% of HR leaders expecting digital transformation to be required within the next 5 years.  If your current HR or Recruitment technology doesn’t drive efficiencies in your processes so that your team can be more productive, or if it doesn’t give you visibility of high-quality data for what tasks are ongoing, what is being delivered, the costs involved, and how long they’re taking, you could well be falling behind your competitors.

The reality is, if you can’t track the output and performance of your function, you can’t measure and move it forward. With increasing pressure from above, the need for sound and accurate data despite ineffective technology often leads to time-consuming manual analysis, placing additional and stress on team members and a further stretch on resources.

6. Skills Gaps

Almost 50% of HR leaders are struggling to bridge the skills gap within their organisation, with skills shortages being a prominent motivator to transform HR and/or Recruitment functions. Skills aside, does your function have the scalability to respond to change within the organisation? Peaks and troughs in workload are difficult to manage in any instance, but a function without the ability to flex with requirements can make them a significant challenge. Whatever your struggles, you can transform HR and recruitment functions to better utilise your existing resource to its full potential, as well as addressing areas where resource requires restructuring or development.

If any of the above is true for your business, and you’re not sure how to proceed, the best place to start is a methodical review of what you’re already doing. This way you can identify where there are barriers or issues, and build a solid business case for change or transformation.

If you can’t make the time to complete an audit yourself, we can help. Our impartial audit, diagnostic and benchmarking services are designed to enable businesses to optimise Recruitment and HR functions.

If you’d like to go one step further, our Change and Transformation Service provides a holistic combination of diagnostic, consultancy and delivery capabilities enabling businesses to successfully effect change and transform Recruitment and/or HR functions. Put simply, we can help to identify where the issues are and implement the change needed to enhance or completely re-launch your function. Whether you need to build a brand-new team, restructure an existing in-house team, ‘in-source’ an outsourced service, outsource to an external provider or create a hybrid model somewhere in the middle, we can help – providing as much or as little of the support as you need to reach your organisation’s full potential.