Internal and external talent acquisition functions are facing an inflection point. My recent attendance at the HRO Today Talent Acquisition Summit only confirmed my perception that the industry knows that the changes are not just coming, they are here. However, some components of internal staffing functions and the recruitment and RPO industry are covering their eyes and hoping they do not have to watch the tide receding. The agentic AI tide is coming, and the future is not humans or AI but rather humans with AI, which I think is positive. Nonetheless, it means the roles and deployment of humans needs to change. A lot of internal TA and provider industry executives do not like that eventuality.
Let's take a look at the internal TA executives first. For years I have been saying I could tell a great TA executive from a bad one. Great TA executives begin their resumes with something like "supervised 5,000 hires per year, reduced costs, and improved cycle times." On the other hand, bad ones have resumes that begin with "oversaw team of 13 managers and 200 recruiters," which focuses on the size of their down lines and not the results. This shows that counting noses is more important that cataloging results. That is always the wrong way to evidence your value and achievement, but in the near future, it will be a dangerous way to think.
The problem in the RPO industry is even more vexing. While the RPO firms embrace technology and use kitschy terms like "tech stack" to describe their solutions, they ultimately make the most money by deploying people. New programs are always designed in more modern formats, but the legacy programs are people rich. I have also heard of many instances where RPO firms resist the reductions of people requested by clients who want a wider deployment of technology or agentic AI. The RPO industry faces a reckoning. For example, RPO deals that used to have 100 recruiters on the team may now only need 60 recruiters and 40 bots. This means the entire industry will see a reduction in revenue as people/humans are more expensive resources. Ironically, the profitability of these programs may increase, but defending the top line, particularly in those that are part of publicly traded companies, has been the initial reaction. No one wants to go the investor community and explain the revenue drop and defend the thesis that there will be a long-term ROI on tech conversion.
To be sure there are both pro and con arguments around the use of AI or agentic AI. The AI tech providers have, for sure, oversold its capabilities. The technology lacks judgment, empathy, and the ability to interpret or improvise. However, its ability to assimilate, catalogue, and process is far superior to humans. It definitely can replace a lot of the process operational duties currently foisted on recruiting teams. It is also in a very early stage and will only improve over time, and the ability to deploy it effectively will also improve over time. There will be, of course, some issues and some mistakes, but AI technology already has great value.
We just need to embrace the future. The internal empire building executives who value themselves by the size of their downlines and the RPO firms who value their deals for the number of team members deployed will have to change, or, inevitably, they too will be obsolete very soon.
Elliot S. Clark
CEO