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For years, speed has been one of recruitment's competitive advantages: find the candidate first, speak to them first and get the CV across first. In a contingency market, where several recruiters may be racing to fill the same vacancy, that has always made commercial sense. The problem is that technology is increasingly able to do much of this faster.

To explore what this means for recruitment agencies, we drew on the perspectives of Alan Furley, Co-Founder & CEO of ISL Talent; Louise Archer, Founder of Retrained Search; and Adam Pode, Director of Research at Staffing Industry Analysts. Their views look beyond the question of how much recruiters charge to the wider issues of client commitment, predictable revenue and, crucially, what clients should actually be paying recruiters to do?

For Furley, AI makes that last question particularly pressing. “If the game we want to be playing is one where the quickest CV wins, I think AI beats us in that race.”

It is not an argument that recruiters are about to become redundant. It is an argument that speed and access alone are becoming harder to sell as distinctive value. If technology can source, filter and surface candidates increasingly quickly, agencies need to be much clearer about what the recruiter adds beyond producing another shortlist.

Speed made sense when speed created an advantage

The industry's emphasis on speed did not emerge accidentally. In a contingency relationship, a recruiter is only paid when they make the placement. When several agencies work the same role, investing days in research while competitors submit candidates within hours creates an obvious commercial risk.

Furley describes how that lack of client commitment can change recruiter behaviour. Once several recruiters are working an assignment, all but one know they will receive nothing if somebody else makes the placement. At that point, he argues, recruitment starts becoming about “speed and volume rather than the depth that I think is essential to good hiring now”.

AI makes that increasingly difficult territory on which to compete. Technology can process information, search data and generate outputs at a speed that a human recruiter simply cannot match. Trying to outperform it by doing more of the same, only faster, is unlikely to be a sustainable differentiator.

Furley's answer is that recruiters need to provide clients with “clarity and confidence, not volume of CVs”.

That distinction becomes particularly important as hiring patterns change. Furley works with venture-backed businesses and has seen many hiring less frequently than they were several years ago. He does not believe that fewer hires automatically make recruiters less valuable.

“I don’t think that means the value for us as recruiters by default has to be less as well,” he says.

In fact, fewer hires can make individual appointments more important. When the consequences of making the wrong appointment are significant, the recruiter's role can extend well beyond identifying people who match a job description. Understanding the requirement, challenging assumptions, interpreting the market and helping a client make a confident decision all become part of the value.

It is a point that echoes comments made by recruitment industry commentator Greg Savage, who has argued that as AI takes on more transactional recruitment work, the human and interpersonal capabilities of recruiters become more important, not less. 

For agencies, the opportunity may therefore be less about competing with AI at the things technology does exceptionally well and more about becoming considerably better at the parts of recruitment where human judgement, influence and understanding still matter.

This is where Archer's experience adds another dimension.

For Archer, moving away from traditional contingency recruitment was not simply about charging differently. It was about creating the conditions in which the recruiter could provide a more thorough service.

She describes retained recruitment as a client's financial commitment enabling the recruiter to put in place a “robust search process” and commit to achieving not simply a result, but “the best result that's available to you all in the market at this time”.

That is fundamentally different from supplying a volume of potentially suitable CVs and hoping one results in a placement.

Archer's experience of contingency recruitment also highlights how difficult it can be for recruiters to deliver a genuinely consultative service when they have too little control over the process. Clients can change direction, feedback can be delayed and recruiters can invest substantial amounts of time in work without knowing whether it will ever generate revenue.

She strongly agrees with Furley's assessment. Her experience suggests that providing greater value is not simply a question of asking recruiters to spend more time with candidates or improve their consulting skills. The relationship with the client has to give them the opportunity to do it.

Recruiters have traditionally described part of their value in terms of access to candidates. That becomes more difficult to defend as technology makes people easier to identify. Finding someone, however, is not the same as knowing whether they are the right person to hire.

Savage has made a similar distinction when discussing the effect of AI on candidate conversations. Technology may be able to ask candidates questions and record their answers, but the skill of a good recruiter often lies in going beyond the first, rehearsed response and understanding what is really motivating the individual.

The same principle applies on the client side. A job specification does not necessarily tell a recruiter what the business really needs. Clients themselves may be uncertain, particularly when hiring a new capability or making an important appointment for the first time.

That creates space for recruiters to become advisers in the decision rather than simply suppliers within the search.

There is another aspect of the contingency debate that can easily be overlooked: predictability.

Pode's framing of the issue brings together several of the pressures facing recruitment businesses. The challenge is not simply what an agency charges, but how the commercial model affects profitability, predictability and client behaviour.

Those issues are closely connected. A recruiter who takes on a vacancy without knowing how many other agencies are working it, how committed the client is or whether the process will ultimately reach a placement has limited control over both the work involved and the revenue it might generate.

For agencies looking to move towards a higher-value proposition, the commercial relationship therefore matters just as much as the service being promised. A business cannot easily offer clients deeper research, greater insight and more considered advice while simultaneously operating a model that rewards its recruiters for moving on quickly when an assignment becomes difficult.

The recruitment industry has traditionally used activity as evidence of work: jobs added, calls made, CVs sent and interviews arranged. Furley's experience of moving ISL Talent towards retained work required the business to reconsider some of those measures.

The company had been built around acquiring jobs and feeding the top of the funnel. It valued jobs added and moved with urgency because, under contingency, recruiters could not always afford to invest heavily in every assignment.

As the business changed its model, its approach to clients changed too. Rather than focusing predominantly on acquiring individual vacancies, ISL Talent began developing relationships with communities of founders, investors and technology leaders.

Furley describes hosting events, dinners and roundtables designed to create useful environments for those communities. Instead of constantly pitching recruitment services, the agency creates situations in which potential clients experience its knowledge before they need to buy.

“When people come to buy from us rather than be pitched by us, we convert much more strongly,” he explains. That is a very different proposition from simply being the recruiter who sends the first CV.

It is easy to frame AI as the force disrupting recruitment, but there is another way of looking at it. Technology may simply expose weaknesses in a model that already rewarded the wrong things.

If recruiters are competing primarily on speed, an automated system capable of searching enormous datasets in seconds has an obvious advantage. If they compete on judgement, relationships, market knowledge, challenge and confidence, the equation changes.

Technology does not become irrelevant. Agencies can use AI themselves to make search, research and administration more efficient. The opportunity is to use that efficiency to create more space for valuable human work rather than simply producing even more CVs.

The commercial model matters too. As Archer's experience demonstrates, recruiters cannot promise a deeper, more consultative service while operating in a relationship that gives them neither the commitment nor the control required to deliver it.

Every agency should be able to answer that question without falling back on the number of candidates in its database or how quickly its consultants can produce a shortlist.

The answer will vary according to the market and the assignment. It might include specialist market intelligence, access to a difficult community, assessment expertise, advice on the brief, salary insight, candidate engagement, search methodology or management of a complex hiring process.

Increasingly, it may also be the confidence that an important appointment has been properly tested against the market and that the client has enough information to make the right decision. What becomes harder to defend is a proposition based almost entirely on speed and access.

AI does not necessarily remove the recruiter from hiring. It does, however, make it increasingly important for recruitment agencies to be able to explain why the recruiter deserves to remain there.

• Competing primarily on CV speed puts recruiters in an area where AI has a natural advantage.
• Contingency models can reinforce speed and volume because recruiters risk receiving nothing for slower, deeper work.
• As transactional work becomes easier to automate, judgement, relationships and interpersonal skills become more valuable.
• Providing a more consultative service also requires the right level of client commitment.
• Predictability and client behaviour matter alongside the headline recruitment fee.
• Recruiter value can extend beyond candidate access into market insight, assessment and better hiring decisions.
• Recruitment leaders should be able to define clearly what clients are buying beyond the CV.