What’s next for recruitment? Navigating the new normal
With longer hiring cycles, steady job volume, and reduced staffing hours, the recruitment industry has found itself in an unprecedented space. No one can predict the future – whether a snapback is coming, or if the market has found itself in a new normal. But rather than wait around, today’s top performers are finding new strategies to drive growth.
At Engage Boston, we gathered experts in the industry – Sunny Ackerman, Global Managing Partner for On-Demand Talent at Heidrick & Struggles, Tammy Browning, SVP and Group President at Kelly, and Bullhorn’s own Senior Research Manager, Lia Taniguchi – for a candid and forward-thinking discussion, moderated by Gretchen Keefner, Bullhorn’s Senior Vice President of Global Enterprise. They peeled back the layers on what’s driving success, where the challenges lie, and how recruitment professionals can proactively shape the future of the industry.
The current recruitment landscape
Despite broader economic uncertainties, opportunities still abound in the recruitment industry. So where can they be found? Based on Taniguchi’s research, firms are increasingly shifting towards “total talent solutions” tied to direct sourcing. This means offering a broader suite of talent management services that provide value across the staffing industry.
Bright spots:
- Total talent solutions: Offering a broader suite of talent management services.
- Consulting services and project management: High-margin, extended services within recruitment continue to see opportunities.
- AI projects: Enthusiasm for AI implementation and data hygiene projects remains strong.
- Upskilling and reskilling: A significant focus on developing specialized, niche workforces for the future.
- Executive search: A surprising resilience, as companies seek agile, experienced leaders to navigate turmoil.
- Skilled trades and light industrial: Browning pointed to strong “green shoots” in manufacturing and light industrial in Kelly’s business. Bullhorn’s own data also shows an increase in light industrial staffing hours, suggesting a growing demand in this sector.
Soft spots:
- Europe (especially Germany) and the automotive industry experienced continued sluggishness starting off the year.
- Tech and mid/lower-level finance positions are still experiencing a downturn.
- Unskilled trades are experiencing a general decline, though skilled trades remain robust.
The evolution of “total talent solutions”
Browning tackled the often-murky concept of “total talent solutions” (TTS), acknowledging that its definition varies wildly across organizations. However, a common thread emerged: companies are looking to recruit and hire based on skills, rather than relying on buzzwords. The goal is to create a unified talent pool for full-time, contingent, and gig labor, leveraging data for efficient, skills-based hiring. Said Browning, “Both talent acquisition and HR are seeking the same thing for the first time I’ve seen in my 20 years.”
The search for top-tier leaders
“The need for top talent in terms of leadership levels is absolutely imperative right now,” said Ackerman. Heidrick & Struggles – primarily an executive search firm – is focused on “on-demand talent,” which involves accessing executive-level talent (VP to C-suite) for interim or project-based roles. In a dynamic market, organizations are looking for agile leaders who can navigate complex challenges, particularly within the CHRO and CPO offices, which face the dual demands of strategic and tactical HR functions alongside retention, development, acceleration, succession planning, and AI integration. This demand for top-tier leadership has kept their executive search business robust, even in pockets of recession.
Finding growth through diversification
Diversification is one of the most popular strategies for driving financial performance, according to the latest GRID Industry Trends Report. However, firms aren’t diversifying broadly or on a whim; they are strategically expanding into higher-margin services by playing to their strengths. Taniguchi noted that firms that experienced revenue growth in 2024 – a challenging year for many – were those that understood their core competencies and then “doubled down,” building on existing expertise to chase every last bit of profit and opportunity.
Ackerman provided a concrete example: Heidrick & Struggles found opportunity in supporting the operational implementation of strategies developed by “Big Four” consultancies (like McKinsey or BCG). As larger firms scale back, there’s a gap in the actual execution and optimization of projects (e.g., ERP transformations). Staffing firms with high-end, niche talent can bridge this gap by providing the hands-on expertise to execute on these strategies and take implementations across the finish line.
Browning highlighted the growth in services procurement. She emphasized the shift from simply providing contingent labor to instead delivering outcome-based solutions. Kelly uses data to provide insights to clients, revealing hiring patterns and identifying opportunities for outsourcing, especially where hiring managers might be circumventing processes or consistently hiring similar roles.
Additionally, said Browning, the term “specialty” is overused and often dilutes the true value of recruitment firms. Instead, she advocated for finding your “niche” – a deep understanding of specific roles and skills, how to address specific market needs, and how to develop talent within those areas. Going too niche, however, can limit agility. The key is to find that sweet spot; Browning said, “You really need to know, ‘What are you good at and how are you good at it?’”
Adapting to evolving buying patterns
It’s no secret that buying patterns have shifted significantly in the past few years, especially in the post-COVID market where clients seek talent accessible from anywhere in the world. Additionally, Browning noted, there’s often a disconnect between procurement and the business; procurement, often the buyer, focuses on price, while the business side is concerned with outcomes and timely delivery. This creates competing priorities. Browning observed a cyclical swing – currently, the business holds more power, leading to a rise in managed services and third-party labor under Statements of Work (SOWs). However, she predicted a return to MSPs as corporations recognize the risks and costs associated with misclassifying indirect labor. The key for staffing firms is to understand both procurement’s language and the business’s operational needs.
Upskilling, agility, and change
While external talent development is crucial, internal staff upskilling within firms is just as important to the continued growth of the industry. However, change management can be difficult in a relationship-driven business like recruitment. Rather than expecting a “red switch,” as Browning said, to flip for strategic shifts, continuous, “at-the-desk” training should be an everyday strategy. “We should be teaching our teams what’s next every day, from the moment that they start all the way through their careers. That way, your change management isn’t a curve, it’s just…what they do,” said Browning. Browning also noted that training is often the first budget item to be cut during downturns, which can end up becoming a costly mistake.
“Learning to adopt that agile mindset is going to be really critical for organizations,” added Ackerman, “but the upskilling and re-skilling has to be done on a daily, desk-level basis with your teams.” Given that AI is already creating capacity for sales and recruitment teams, the challenge for leadership is to direct this newfound capacity towards higher-value activities like deeper client and candidate engagement and use this opportunity to re-skill.
Bringing tech to the table
When it comes to growth, tech is a key part of the equation. The GRID 2025 Industry Trends Report found that early and extensive adoption of AI agents correlates with revenue growth. “This is really about cultivating and embracing a mindset of innovation that makes you take these challenges as a real opportunity and a thing that’s exciting rather than something that’s a hill you have to climb,” said Taniguchi. The goal of technology, particularly AI, is to automate manual workloads, thereby giving talent and teams more time for high-touch, white-glove service with clients and candidates.
The future of recruitment: Niche, tech-driven, and outcome-oriented
When asked what their staffing firm would look like if started tomorrow, the answers shone a light on what today’s recruitment agencies can focus on to find success:
- Sunny Ackerman: Start small, research particular niches with clear supply and demand, and deeply understand how technology can accelerate the business.
- Tammy Browning: Focus on managed services and outcome-based business, blending human talent with agentic AI, becoming a “workforce solution provider” rather than just a “staffing company.” Embed tech deeply for greater stickiness with clients.
- Lia Taniguchi: Laser-focus on emerging, declining, and future skills, and how to creatively and flexibly apply them across the evolving job market.
Despite its challenges, the recruitment industry remains dynamic and full of opportunities. By embracing skills-based hiring, strategic diversification, outcome-based solutions, continuous upskilling, and innovative technology, firms can empower their teams, deliver unparalleled value to clients, and truly shape the future of recruitment.
For more insights from Engage Boston, check out our Content Hub.
