THE CASE FOR CHANGE
Why now?
The recruitment industry has reached an inflection point. The convergence of economic pressure, rising expectations, and accelerating technology is forcing business leaders to make a strategic choice: evolve, or risk irrelevance.
MARGIN PRESSURE
Clients are demanding more for less. Pricing power is declining, particularly in generalist and transactional markets. Differentiation is harder to prove, especially when every competitor claims to have “better service”, “the biggest network” or “the best consultants.” As margins tighten, operational efficiency becomes imperative.
"The challenge for CEOs and CFOs is achieving growth in the current market whilst simultaneously making the requisite investment in technology and data to future proof the business"
DEMAND FOR MORE
"Those who stick their head in the sand now will find competition stealing a march on them. It will be hard to recover, so now is a crucial time to adopt tech which will keep businesses competitive"
Clients now expect recruitment and staffing partners to deliver insight, not just CVs and resumes. Philip Ellis of Optima Corporate Finance has seen this develop; he remarks, "Clients are looking for more than the 'bums on seats' model as it becomes increasingly easy to source talent directly. Using tech to support talent acquisition will enable recruiters to add value and secure long-term relationships with clients".
Real-time updates, data-rich reporting, and strategic workforce advice are fast becoming table stakes. But most firms still struggle to extract, analyse, and act on the data trapped within their systems, often preventing them from finding the treasure lays within their databases.
Sohail Ahmad from Azlan Advisory gives M&A, strategic and financial advice to shareholders, boards, lenders and investors, and had advice on this topic. "Leaders should aim to leverage technology to personalise processes, deliver a better candidate and client experience, increasing loyalty and retention".
"This should allow more focus on high ROI activities that are not easily replicable, adding value where technology can’t - the human elements of building relationships and intuitive judgement".
AI & AUTOMATION ARE NOT WAITING
The leap from basic automation to agentic AI has happened quickly. Early adopters are using intelligent agents to autonomously source candidates, write outreach messages, prioritise leads, and even complete compliance processes. What once took an entire team now takes a single consultant (or none at all).
If your competitors (and perhaps even your clients) are using automation and AI to move faster, reach further, add more jobs, find better candidates and operate leaner, what happens to your business when you're not?
"Leaders should aim to leverage technology to personalise processes, deliver a better candidate and client experience, increasing loyalty and retention"
PRIVATE EQUITY AND M&A
ACTIVITY IS SHIFTING EXPECTATIONS
M&A deals done in Staffing in the last 10 years. What multiplier will you achieve?
Source: SIA M&A Database 2025
Investors are increasingly looking for firms that have strong revenue AND strong systems. Businesses with scalable infrastructure, reliable data, repeatable delivery models, and embedded tech command higher valuations. PE firms see tech-led agencies as more predictable, more resilient, and ultimately, more investable.
Recent deals in the sector have shown a clear pattern: recruitment firms with strong tech maturity and digital operations secure better terms, faster closes, and larger multipliers.
LEGACY SYSTEMS ARE HOLDING YOUR FIRM BACK
Legacy ways of working are increasingly incompatible with modern growth. Manual admin, disconnected systems, consultant-led BD, and gut-feel management are not scalable foundations.
Good technology now enables you to replace these friction points with automation, insight, and agility, but only if you're willing to challenge the assumptions baked into your current model.
Bespoke systems are a concern to prospective buyers and investors too. "Buyers are wary of bespoke technology systems within traditional recruitment models and seldom view them as value-enhancing. It requires detailed technical diligence and an understanding of associated commercial risks - scalability to support growth, serviceability (including key employee reliance), IP ownership and protection" comments Sohail.
The external pressure is growing, but so is the opportunity.
The firms that act now, and act boldly, can create operating models that scale smarter, deliver faster, and hold more value in the market.