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Artificial intelligence is speeding up some parts of hiring, which could force recruitment agencies to rethink how they charge.
David Barwick, owner of Adria Solutions, a Stockport, UK-based recruitment agency, said as AI takes on more of the work involved in recruitment, clients may wonder what they are actually getting paid for. Agencies often charge employers a percentage of a successful candidate’s first year’s salary.
“AI will make it increasingly difficult for recruitment agencies to justify their services if all they do is find resumes and forward them to employers,” Barwick told CNBC. “Companies can already automate much of that work themselves.”
How AI speeds up reviews
In a 2026 survey of nearly 300 UK and Irish recruiters by US recruitment software provider Bullhorn, 37% said AI made candidate selection 26-50% faster. LinkedIn’s 2025 UK Future of Recruiting report also found that talent acquisition professionals saved an average of 18% of their workweek by experimenting with or integrating generative AI.
They have a huge hierarchy of analysts, researchers, consultants, managing partners, and I think at least 60, 70% of them will lose their jobs.
matt collingwood
VIQU Group
Major recruitment agencies are already implementing automation. In February, Swiss staffing company Adecco, which operates six AI recruitment agencies in the UK and France, announced that the UK tool could save around 15% of time in the recruitment process.
The UK was the first market in Adecco Group to test these AI recruitment agents, said Niki Turner-Harding, the company’s senior vice president for the UK and Ireland. The company says its AI supports more than 2.5 million candidate interactions across the group, about half of which are outside normal working hours.
But while agents assist in the hiring process, they don’t make hiring decisions, Turner-Harding said. That responsibility rests with the human recruiter, and candidates can ask to speak to that person at any time.
“People don’t go into recruiting because they like managers. They go into recruiting because they like working with people, solving problems and building relationships,” she told CNBC. “That means recruiters will spend less time on the process and more time on the actual hiring process.”
Will agency fees be maintained?
Matt Collingwood, managing director of VIQU Group, a Birmingham, England-based recruitment agency, told CNBC that he sees automation as an opportunity to give recruiters more time to build relationships, rather than just making the same service cheaper. VIQU’s sales have increased 47% in the past 18 months, which is partially a result of its approach, he said.
“The companies best positioned to succeed will be those that combine technology, strong relationships and real expertise,” he said. “If the value we deliver continues to grow, I see all the reasons why our rates could remain the same or even increase.”
Still, Collingwood predicted that only a third of today’s recruitment agencies may survive the next five years. Some predict significant layoffs. James Wright, founder of London-based executive recruitment firm Velocity Leadership, said AI can now do jobs that previously required a team of five people.
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He pointed to Spencer Stewart, Heidrick & Struggles, Russell Reynolds, Egon Zehnder and Korn Ferry, the leading global executive search firms known as SHREK firms, which dominate C-level and board-level hiring. These companies could face significant pressure to cut staff, he said.
“They have a huge hierarchy of analysts, researchers, consultants, managing partners,” he told CNBC. “I think at least 60, 70 percent of them will lose their jobs.”
Pricing pressure
Some recruiters expect fees to remain the same, while others believe AI will ultimately drive down hiring costs.
Recruiting is not very effective by any stretch of the imagination… One of the reasons fees are so high is that the process is very inefficient.
Paddy Lambros, founder and CEO of London-based AI recruitment platform Dex, said an overhaul of the industry was long overdue.
“Hiring as a way to get things done is not very effective no matter how you look at it,” he told CNBC. “It’s very expensive and very time-consuming. One of the reasons the prices are so high is that the process is very inefficient.”
Lambros argued that AI is contributing to a job market flooded on both ends, with candidates submitting thousands of automated resumes and employers struggling to sift through applications.
“The solution is not to give every candidate an AI, give every customer an AI, and then pit the AIs against each other. That’s a huge waste of time,” he said. “Technology must be used in a way that supports both parties.”
Some argue that AI enhances, rather than devalues, human judgment. Chris Stirling, managing director of British specialist recruitment firm Sterling Q&R, told CNBC that the value of recruitment agencies increasingly lies in their ability to assess candidates.
He said the software can find 100 people whose profiles include terms like “QA” or “regulatory” in seconds, but “for a biotech founder, it can’t tell whether that candidate actually built a quality system from scratch or just maintained one.”
“AI is making the easy parts of recruiting faster, which is why we now have to earn commissions on the hard parts,” he said.
