Skills data

How Skills-Based Hiring Can Save Business Costs in a Tight Economy

Find out how skills-based hiring can help you cut costs in today’s tough economy. Let’s explore how to prepare your workforce strategy for success in 2025!

December 18, 2024
4 min read
Helena Turpin
Co-Founder, GoFIGR
5 second summary

Cost Savings: Skills-based hiring reduces recruitment fees and onboarding costs by tapping into existing employee potential.

Workforce Agility: Focus on skills over credentials to build a future-ready, adaptable workforce in a challenging economy.

GoFIGR Advantage: GoFIGR’s AI-powered platform streamlines internal hiring, matching employees to roles and driving internal mobility.

We’ve all been there: navigating a tight labour market, dealing with rising recruitment costs and facing budget cuts that seem to squeeze every dollar.

The pressure is mounting, and every year, we all need to do more with less.

But here’s the kicker — we need something fresh to make our HR teams shine. There’s a smarter, more efficient way forward.

Skill-based hiring (with a focus on internal hiring) is gaining traction - and for good reason. It’s not just a smart move, it’s a necessary one. Instead of looking externally, why not tap into the talent already within your organisation?

Want to dive deeper? Check out our GoFIGR eBook on how to become a skills-based organisation here.

The Shift Towards Skills-Based Hiring

Hiring practices from the last decade are quickly becoming outdated. Skills are evolving at a rapid pace and the demand to adapt is increasing. In Australia, recruitment costs have skyrocketed in recent years, with the average hiring fee now sitting at an eye-watering 10% to 30% of the hired employee’s annual salary. With budget cuts, this is becoming unsustainable.

Recruitment costs are shooting up, BUT the answer could be closer than you think.

In 2025, we can no longer afford to just “keep doing what we’ve always done.” We need a new recruitment strategy that makes use of all the potential in-house, promoting internal mobility while saving money and keeping employees engaged.

A Smart Response to Today's HR Challenges

The days of relying solely on external hires, resume scanning and dated hiring practices are coming quickly to an end. With economic pressures mounting, businesses can’t afford to make hiring decisions based solely on pedigree.

Meanwhile, Gen Z is moving away from the traditional career paths and seeking growth opportunities within organisations they trust. To keep top talent, internal mobility has never been more important.

If you're already feeling the pressure, you're not alone.

Skills-based hiring is revolutionising how companies attract and retain talent. Focusing on the skills required for a role, instead of relying on traditional credentials like degrees, allows employers to access a broader and more diverse talent pool.

This approach reduces bias and helps uncover hidden potential.

You can find candidates with the right skills and experiences, even if their backgrounds don’t fit the usual mould. This method works wonders for internal hiring, too, which allows you to save on recruitment costs while improving employee morale and retention.

Does this sound like what you need? Let’s explore how GoFIGR can help!

GoFIGR: Helping You Find and Grow Talent from Within

Going forward, we – as businesses – should be aiming to thrive, not just survive.

Google Trends shows a sharp increase in searches for "skills-based hiring”, which is a sign that this approach is gaining serious traction. If you're looking for cost savings, higher employee engagement and the ability to leverage the power of AI in hiring, then it’s time to think differently.

This is where GoFIGR comes in. 

We make it easy for businesses to identify internal talent and create personalised career pathways using our AI-powered platform. GoFIGR's Talent Marketplace allows HR teams to match employees to new roles or projects based on their existing skills. It’s not just about hiring cheaper — though it helps with that too — it’s about building an adaptable, future-ready workforce.

When you hire internally, you tap into a wealth of knowledge and capability:

  • They already know how the coffee machine works (and all the important stuff too!) No need to waste time on onboarding logistics.
  • They understand the company politics and know who's who and how to get things really done. (No need to explain that our finance director needs everything in triplicate or that Sarah in IT prefers tickets to phone calls.) 

Internal hires can hit the ground running, reducing the long ramp-up time typically associated with external hires.

The Money Bit: Why Internal Hiring Makes Sense

Now, for the real win: Zero recruiter fees. We all know how expensive those can be!

  • Zero recruitment fees: Let’s face it, external recruitment fees cost so much. By looking internally, you eliminate these costs.
  • Quick ramp-up: Internal hires don’t need months of onboarding. They are familiar with company culture and can transition into new roles in a matter of days, not months.
  • Training budget: You can focus your training dollars on developing advanced skills rather than teaching employees company-specific processes.
  • Employee Engagement: Hiring internally promotes loyalty and shows employees that there’s room for growth and advancement.

Internal Hiring Challenges (And How GoFIGR Solves Them)

For years, tracking internal talent has been a logistical headache. Spreadsheets, quarterly reviews and outdated systems made it hard to know what skills employees actually had and even harder to match them to the right opportunities.

GoFIGR simplifies this by automating the process, giving you clear visibility into who has what skills and where the gaps are.

Every HR professional knows the common hurdles with internal hiring:

  • Manager Hoarding Talent

Employees are often "hoarded" by managers who don’t want to lose their best people. GoFIGR helps mitigate this issue by giving managers insights into available skills across departments, making it easier to share talent without the politics.

  • Fear Of The Unknown

There's a natural reluctance to promote someone “unproven” internally versus hiring an external candidate with a perfect CV. However, research shows that internal hires typically perform better, stay longer and cost significantly less than external hires. 

Turns out that betting on the people who already believe in your company is actually a smart move!

  • The “Fresh Blood” Argument

Executives often make the case for hiring new talent to bring fresh perspectives. However, internal hires bring valuable company knowledge, reducing the risk of turnover and keeping morale high while still introducing new ideas and innovation.

How Internal Mobility Can Help Businesses Thrive in Tough Times

In times of economic uncertainty, like the downturn we’ve seen in Australia’s job market, organisations that prioritise internal mobility are better positioned to weather the storm. They save money, retain key talent and keep morale high. 

TWhile competitors are scrambling to fill external roles at high costs, your internal workforce is adapting and thriving.

Skills-Based Hiring in Action

We have a client whose journey into skills-based hiring demonstrates how this approach can drive both cost savings and enhance workforce agility. Here’s how they did it.

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Ready to experience the same results for your company?

By adopting skills-based hiring, this client not only simplified their hiring process but also created a more engaged and agile workforce. This innovative approach helped reduce recruitment costs, foster internal growth and open new opportunities, all while strengthening their team from within.

Now it’s your turn! 

Embrace skills-based hiring and start building the workforce of the future.

Contact GoFIGR today to learn more about how we can help transform your hiring and workforce strategy for 2025 and beyond.

[Book a GoFIGR demo]

Helena Turpin
Co-Founder, GoFIGR

Helena Turpin spent 20 years in talent and HR innovation where she solved people-related problems using data and technology. She left corporate life to create GoFIGR where she helps mid-sized organizations to develop and retain their people by connecting employee skills and aspirations to internal opportunities like projects, mentorship and learning.

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