How AI is changing recruitment and agency fees

Artificial intelligence is speeding up parts of hiring — and that could force recruitment agencies to rethink how they charge.

David Berwick, owner of Adria Solutions, a recruitment agency based in Stockport, England, said that as AI takes on more of the work involved in making a placement, clients may question what their fees actually pay for. Agencies often charge employers a percentage of a successful candidate’s first-year salary.

“If a recruitment agency is simply finding CVs and forwarding them to employers, AI is making that service increasingly difficult to justify,” Berwick told CNBC. “Businesses can already automate much of that work themselves.”

A 2026 survey of nearly 300 recruitment professionals in the U.K. and Ireland by U.S. recruitment software provider Bullhorn found that 37% said AI had made candidate screening between 26% and 50% faster. LinkedIn’s 2025 UK Future of Recruiting report also found that talent acquisition professionals experimenting with or integrating generative AI saved an average of 18% of their working week.

Major recruitment firms are already putting that automation into practice. Swiss staffing company Adecco said in February that it had six AI recruitment agents operating in the U.K. and France, with the U.K. tools saving around 15% of the time spent on recruitment processes.

The U.K. was the first market in the Adecco Group to test these AI recruitment agents, according to Niki Turner-Harding, the company’s senior vice president for the U.K. and Ireland. Across the group, AI has supported more than 2.5 million candidate interactions, around half outside normal working hours, the company said.

But although the agents support the recruitment process, they don’t make hiring decisions, Turner-Harding said. That responsibility remains with a human recruiter, and candidates can always ask to speak to a person.

“People don’t go into recruitment because they love admin. They go into it because they like working with people, solving problems and building relationships,” she told CNBC. “So, what we’ll see is recruiters spending less time on process and more time actually recruiting.”

Matt Collingwood, managing director of recruitment firm VIQU Group in Birmingham, England, told CNBC he sees automation as an opportunity to give recruiters more time to build relationships, rather than simply making the same service cheaper. VIQU’s turnover has grown by 47% over the past 18 months, partly as a result of that approach, he said.

“The businesses best placed to succeed will be those that combine technology with strong relationships and genuine expertise,” he said. “I see every reason for our fees to hold firm, or even increase, if the value we deliver continues to grow.”

Still, Collingwood predicted that only a third of today’s recruitment agencies may survive the next five years. Others expect deep job cuts. James Wright, founder of London-based executive hiring firm Velocity Leadership, said AI now allows him to do work that previously required a team of five.

He pointed to the large global executive search firms, sometimes known as the SHREK firms — Spencer Stuart, Heidrick & Struggles, Russell Reynolds, Egon Zehnder and Korn Ferry — which dominate C-suite and board-level recruitment. These businesses could face significant pressure to shrink their workforces, he said.

“They have this huge hierarchy of analysts, researchers, consultants, and managing partners,” he told CNBC. “At least 60, 70% of them are going to be out of a job, I think.”

While some recruiters expect to hold their fees, others think that AI will eventually push the cost of hiring down.

Paddy Lambros, founder and CEO of London-based AI recruitment platform Dex, said the industry is long overdue for an overhaul. 

“Recruitment as a way of doing things isn’t very effective no matter how you look at it,” he told CNBC. “It’s very expensive, it’s very slow. One of the reasons that the fees are so high is that it’s such an inefficient process.”

Lambros argued that AI is contributing to a hiring market flooded at both ends, with candidates sending out thousands of automated resumes and employers struggling to sift through applications.

“The solution is not giving every candidate an AI, giving every client an AI and then making the AIs fight — that’s just a massive waste of time,” he said. “Technology has to be used in a way that supports both sides.”

Others argue AI will make human judgment more valuable, not less. Chris Stirling, managing director of U.K. specialist recruitment firm Stirling Q&R, told CNBC that the value of recruitment firms will increasingly lie in their ability to assess candidates. 

Software can find a hundred people with terms like “QA” or “regulatory” in their profile in seconds, he said, “but it cannot tell a biotech founder whether a candidate has actually built a quality system from scratch or only maintained one.”

“AI is making the easy part of recruiting faster,” he said, “which is exactly why the fee now has to be earned on the hard part.”