Creative ways to keep hiring costs down in 2025
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Posted: Fri 8th Nov 2024
As we move into 2025, UK small businesses are facing new challenges, particularly in hiring.
One significant factor influencing hiring decisions is the recent National Insurance hike announced in the Autumn Budget. Starting in April 2025, Employers' National Insurance contributions will increase by 1.2 percentage points to 15%.
Additionally, the secondary threshold — the point at which employers start paying National Insurance on a worker's salary — will drop from £9,100 a year to £5,000. These changes represent a substantial shift, with an estimated £25 billion impact on the Treasury.
Given these changes, it's understandable that many small businesses might feel more cautious about hiring new staff, which could ultimately affect their growth potential.
Ben Willmott, head of public policy at the CIPD, noted: “The increases in business costs announced today will create significant headwinds to growth.” He warns that coupled with proposals to strengthen employment rights through the Employment Rights Bill, these changes may hinder businesses’ ability to grow, recruit and invest in skills.
However, this doesn’t mean that small businesses have to hit pause on their hiring plans!
At Enterprise Nation, we’re here to support you through these changes and help you navigate the challenges of hiring in 2025. With the right strategies in place, you can keep your momentum going and attract the talent your business needs.
Here are five creative ways to keep costs down while bringing in the best candidates!
1. Plan for the next 12 months
Before making any hiring decisions, take the time to plan strategically for the year ahead. Identify key skills gaps critical to your business growth and consider which roles can support these needs. This proactive approach will help you avoid “panic hiring”, allowing you to stick to a well-thought-out plan that aligns with your business objectives.
I would suggest carrying out a skills gap analysis using a template like this one on Miro. A skills gap, more specifically, is a gap between the skills your employees have and the skills they collectively need to succeed. It helps organisations understand how to address these gaps through training, reskilling and recruitment.
2. Leverage the gig economy
The gig economy is thriving, providing access to a pool of skilled contractors who can add significant value to your business without the long-term commitments of permanent hires. Collaborating with contractors on core projects has allowed us at Enterprise Nation to introduce new skills and innovation.
This flexible approach addresses immediate needs and provides a chance to evaluate potential full-time hires without the pressure of a long-term commitment.
To tap into the gig economy effectively, start by clearly defining the specific skills and expertise you need for your projects. Platforms like Upwork, Fiverr and Freelancer are excellent places to find skilled contractors; create detailed job listings that outline your expectations, project scope and desired outcomes to attract the right talent.
Additionally, don’t underestimate the power of networking — reach out to your professional contacts for recommendations and consider joining online communities related to your industry, where freelancers often seek opportunities.
When working with gig workers, foster strong communication and clear guidelines to ensure successful collaborations.
Hidden benefits of hiring a virtual assistant
Keeping costs low is important for all businesses, especially SMEs. In addition to seeing where you can cut costs, you should also think long and hard about where you can invest the money you do have. A virtual assistant (VA) is a great way of freeing up your time so you can make more money.
"A VA can do all the tasks that eat into your day and help you scale your business. Yes, a VA is going to cost you money, but in the long run, they should be covering all the tasks and implementing procedures and processes that help you make money, too," says Dee Atkins, founder of virtual assistant services company, Miss Make It Happen (MMIH). She has been a business owner for almost 15 years, a VA for 10 of those and has seen it all.
"It’s not just the bigger companies, small, one-man bands needed VAs the most. Business owners are great at what they do, but the day-to-day running of the business was drowning them. Paying someone to take those tasks away not only reduces stress but increases productivity."
Tip: Most VAs have a package or minimum hourly rate that anyone can afford. Don’t be afraid to ask what that is. You may be very surprised to learn that you can afford to outsource.
"A virtual assistant will not just do your admin, you’ll have someone to bounce ideas off, a shedload of experience and knowledge to dip into and they can usually get things done quickly, yet effectively," continues Dee.
3. Explore apprenticeships and internships
Investing in apprenticeship and internship programmes can be a cost-effective way to bring fresh talent into your organisation. These programmes allow you to nurture young talent who can grow alongside your business, providing you with new perspectives while keeping hiring costs manageable.
Platforms like Apprenticeships.gov.uk and Creative Skillset are excellent resources for finding apprentices and interns tailored to your industry.
Additionally, many local councils offer schemes to encourage businesses to take on apprentices, which may come with financial incentives or grants to help cover costs.
By implementing these programmes, you enhance your workforce and contribute to the development of the next generation of professionals, creating a positive impact within your community.
4. Embrace remote work opportunities
The shift to remote work has opened up a vast talent pool beyond your local area. Embracing remote work can not only attract candidates seeking flexibility but also reduce overhead costs associated with office space. By offering remote positions, you can tap into skilled professionals from across the country, ensuring you find the right fit for your business without geographical constraints.
To effectively access remote workers, leverage online job boards and platforms specifically designed for remote hiring, such as Remote.co, We Work Remotely and FlexJobs. These platforms cater to remote job seekers and provide a streamlined application process, making it easier to connect with qualified candidates.
Additionally, enhance your company's visibility in the remote work landscape by promoting job openings on social media and within professional networks like LinkedIn.
Be transparent about your organisation's remote work culture, emphasising flexibility, communication practices and any tools or resources you provide to support remote employees.
Offering a hybrid model, allowing for a combination of in-office and remote work, can also be appealing. This can attract a broader range of candidates.
By embracing remote work opportunities, you expand your talent pool and create a dynamic work environment that can increase productivity and employee satisfaction.
5. Foster employee referrals and networking
Your existing employees can be one of your best resources for finding new talent. Implementing a referral programme can incentivise employees to recommend candidates from their networks, often resulting in higher-quality hires who are a better cultural fit.
Additionally, encourage team members to engage in networking opportunities to identify potential candidates who may not be actively seeking new positions but would be an excellent match for your business.
Conclusion
As small businesses navigate the complexities of rising costs and the need for strategic hiring, it’s crucial to remain proactive and creative. By planning for the future, leveraging the gig economy, investing in apprenticeships, embracing remote work and tapping into employee networks, you can maintain growth and build a resilient workforce in 2025.
The landscape may be shifting, but with the right strategies, your business can thrive despite the challenges ahead.
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