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As artificial intelligence (AI) rapidly takes over recruitment tasks, the commission structure of recruitment agencies has come under scrutiny. The traditional method has been to receive a certain percentage of the successful candidate's first-year salary. Industry experts point out that the basis for charging fees has weakened, as services like finding resumes and forwarding them to companies can now be automated directly by the companies themselves. However, there is also a strong counter-argument that human judgment will become more valuable.
According to U.S. business news channel CNBC, David Berwick, owner of Stockport-based recruitment agency Adria Solutions in the UK, stated, "If recruitment agencies merely find and forward resumes to companies, it's becoming increasingly difficult to justify that service due to AI. Companies can already automate much of that work themselves." U.S. recruitment software company Bullhorn surveyed nearly 300 recruitment professionals in the UK and Ireland for 2026. 37% of respondents reported that AI accelerated candidate screening by 26-50%.
Similar results were found in LinkedIn's 2025 Future of UK Recruitment report. Talent acquisition professionals who tested or integrated generative AI into their work saved an average of 18% of their weekly working hours. Swiss staffing company Adecco announced in February that it is operating six AI recruitment agents in the UK and France. In the UK, it reduced the time spent on recruitment processes by approximately 15%. The UK is the first market where the Adecco Group piloted these agents.
Across the Adecco Group, AI supported over 2.5 million candidate interactions. About half of these occurred outside regular working hours. Nikki Turley-Harding, Adecco's Senior Vice President for the UK and Ireland, explained that while the agents assist with the recruitment process, they do not make hiring decisions.
The decision rests with human recruiters, and candidates can request to speak with a person at any time. Turley-Harding stated, "People don't go into recruitment because they love administrative tasks. Recruiters will spend less time on processes and more time on actual recruitment."
Industry outlooks are mixed. Matt Collingwood, Managing Director of Birmingham-based UK recruitment firm VIQU Group, views automation not as a means to sell the same service cheaper, but as an opportunity to spend more time building relationships. VIQU's revenue reportedly increased by 47% over the past 18 months, partly due to this approach.
Collingwood believes that if the value provided continues to grow, fees could be maintained or even increase. However, he predicted that only one-third of current recruitment agencies would survive the next five years.
There are also voices predicting large-scale layoffs. James Wright, founder of London-based executive search firm Velocity Leadership, said that AI has made it possible to do work that previously required a team of five. He suggested that global search firms dominating C-suite and board-level recruitment could face pressure to reduce staff.
Spencer Stuart, Heidrick & Struggles, Russell Reynolds, Egon Zehnder, and Korn Ferry are examples of such firms. Wright stated, "There's a huge hierarchy from analysts, researchers, consultants, to managing partners. I expect at least 60-70% of those jobs to be lost."
There is also a view that recruitment costs will eventually decrease. Paddy Lambros, founder and CEO of London-based AI recruitment platform Dex, said, "The way recruitment is done is inefficient by any measure. It's very expensive and very slow. One of the reasons for high fees is that the process itself is so inefficient." He pointed out a situation where applicants send thousands of automated resumes, and companies struggle to filter through the deluge of applications. Lambros emphasized, "Giving AI to every candidate and every client and having AIs fight each other is a huge waste of time. Technology should be used in a way that supports both sides."
Chris Stirling, Managing Director of UK specialist recruitment firm Stirling Q&R, said that the value of recruitment agencies will come from their ability to assess candidates in the future. Software can find 100 people with words like 'QA' or 'regulation' in their profiles in seconds. However, it cannot tell a biotech founder whether a candidate built a quality system from scratch or merely maintained it. He stated, "AI is making the easy parts of recruitment fast, so now fees must prove their worth in the difficult parts."
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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