After sitting on an APSCo panel about the future of recruitment, I spent the next week fielding questions from agency owners and reflecting. They all boiled down to the same thing: "How do we actually do this?" The webinar gave them the diagnosis - structural change, not cyclical downturn - but now they wanted the treatment plan. Some thoughts.
I sat on an APSCo webinar recently where I debated with one of the other panellists about something fundamental. It was said that recruitment businesses scale on average billers, not top performers.
It raised an interesting question for me: does the market reward average billers anymore?
That question cuts to the heart of what's happening in recruitment right now. This isn't another cyclical downturn where we batten down the hatches and wait for the bounce. The UK has seen 36 consecutive months of declining vacancies. The industry has shed 30% of its workforce in just over a year. AI is already here, rewriting the rules while many are still playing the old game.
I run a job board, recruit in the education and training sector, and advise agencies on automation and process. That practitioner lens matters because I'm not theorising about what might work. I'm watching what does work, up close, every day.
If you're spending 60% of your gross margin on people in a recruitment business, you won't be in business in two years.
That's not hyperbole. JP Morgan grew productivity 10-20% last year while cutting headcount. The link between headcount and productivity: the one that's held since the Industrial Revolution is breaking. The banks figured this out first, but it's coming for everyone.
One of my clients, a boutique agency, is replacing a full time contract biller through AI enablement. No drop in productivity. Actually, an improvement.
The math is brutal but clear: your cost base needs to shift from 60% people to 40% people plus digital workers over the next 12-24 months. That's not a nice-to-have strategic goal. That's survival.
Most agencies are going to the same vendors to solve this, buying the same tools their competitors buy. At best, if you integrate it well, you're treading water. At worst, you've just added overhead while telling yourself you're innovating.
There was a moment in the webinar where I mentioned a solo recruiter billing £800k. Just him. A small brand behind him. No corporate infrastructure.
That's not an outlier anymore. I think personal brand has already outstripped company brand for everyone except the Korn Ferry tier, where customers are buying the status signal. The "nobody gets fired for using IBM" insurance policy.
Below that? Clients follow people, not logos. The best recruiters I know could move tomorrow and take their business with them. The question isn't whether this is happening. It's whether agencies are structured to retain these people or just trying to extract value before they walk.
I agree with my fellow panellist that you can't scale a business on prima donnas that don't follow the rules. However, I would question why we aren't building processes around top performers? Instead of forcing them into workflows designed for average biller.
If someone's billing multiples of their peers, give them an assistant. Build them custom tools. Treat it like football agents managing talent, not factory workers on a production line.
The agencies that figure this out will keep their best people. The rest will watch them leave and wonder why.
Still, knowledge can't live in one person's head if you want to drive enterprise value. The answer isn't "let top billers do whatever they want." It's more about wrapping top performers in support systems that scale their best practices across the business while keeping them enabled. They'll be happy, you'll be happy.
To retain that knowledge, L&D must be an apprenticeship model. Grey hair coaching the next generation, knowledge transfer as a core function. Not hoping 1 of 10 new hire juniors figure it out by making 100 cold calls a day, whilst burning the rest.
Everyone on the webinar kept circling back to data. Tracey was right; if you don't know your baseline metrics, you can't measure whether AI is helping.
Consider that everyone has access to the same AI. ChatGPT, Claude, whatever. So why doesn't that level the playing field?
Because AI runs on your data, and your data is different.
Your CRM holds relationship context, placement history, which clients respond to which candidates and in what timeframes. That's proprietary intelligence. LinkedIn Recruiter gives you public profiles. Useful, but it's the same public profiles your competitors see.
The agencies winning right now are tracking:
These aren't vanity metrics. They're efficiency engines. You can see which roles to work, which to park, which clients move fast, which waste your time. That's the moat.
SMEs have an advantage here, weirdly. They can move faster, build more targeted systems. They're not trying to serve everyone. Some of the most profitable recruitment happens with smaller clients who move in 5 days versus enterprise PSLs that take 8 weeks to process.
During the webinar, we touched on building. A fellow panellist stated that he'd never seen a small agency successfully custom build.
I get his point. He's coming from enterprise transformation roles where he's seen millions wasted on failed builds. I've never seen it done either but I think we're hitting an era where this is more possible than ever.
The tools available now such as no-code platforms, API integrations, AI-assisted development make micro-builds accessible in a way they weren't five years ago. You're not rebuilding Bullhorn. You're solving a specific problem your competitors aren't solving.
Example: a client wanted to automate contractor availability checks. Manual calls every morning, huge admin drain. We built a simple workflow that texts contractors, aggregates responses, and routes urgent gaps to consultants. Cost a few hundred quid. Freed up hours a day.
That's not on the shelf at Rec Expo. And because it's custom, it's defensible.
Shadow IT, where consultants sign up for random tools behind IT's back, isn't a problem to stamp out. It's a signal. Your best people are trying to work around your systems because the systems don't serve them. It's worth listening to that.
Look for the desire lines in your business.
Integration matters. Everything needs to talk to everything else. But integration doesn't preclude building small, targeted solutions on top of your core stack.
The question isn't build versus buy. It's more if creation creates margin uplift, or does it trap you in overhead?
There's something valuable in still being hands-on. When I'm advising agencies, I'm not guessing what might work. I'm testing it in my own businesses first.
That creates a different conversation. I can say "here's what broke when we tried it" or "here's the workaround we found" because I've actually done it.
So here's my audit for you: track where your consultants spend their time for one week. If 60%+ is admin, sourcing, or staring at LinkedIn, you've got a problem. Because AI can do all of that. Not as well as your best person, but better than your average person, and at a fraction of the cost.
The path forward isn't more people. It's redeploying your people to the high-value work only humans can do. Things like reading the room, building trust, delivering bad news well, and understanding the emotional drag of a career move.
That's the work AI won't touch for years. But you can't get there if your best communicators are still chained to a desk running Boolean searches.
The webinar ran long because we kept circling back to the same tension: everyone knows change is necessary, but knowing and doing are different.
Some agencies are in denial. They think the market will bounce back and this will all blow over. It won't.
Others are paralysed. Too many options, don't know where to start, drowning in tech fatigue.
The ones who'll win are treating this like a forcing function. Not waiting for permission or perfect information. Pick an efficiency lever. Candidate response times, role triage, data enrichment and obsess over it until it works better.
Then move to the next one.
Start somewhere. This week, not next quarter. Because while you're deciding, your best people are deciding too. They're wondering whether to stay or whether they can do this better with someone else or on their own.
And the math on that decision is getting easier for them every day.
If you want to discuss efficiency plays for your business, or argue with me about any of the above, reach out. I don't promise to agree with you, but I'll give you an honest view.
