u/Successful-Estate470

We run a recruiting agency, and this is something we've been discussing internally a lot.

A huge part of what justified agency fees over the years was the amount of manual work involved. Finding candidates, screening resumes, coordinating interviews, following up, keeping everyone in the loop. It was a people-heavy business.

Now we're building and using AI workflows that automate a surprising amount of that work. Sourcing, matching, screening, interview coordination, follow-ups, and a lot of the repetitive recruiting operations can happen with very little human effort.

It makes me wonder what happens to the business model over the next few years.

If it costs significantly less to deliver a successful hire, do agencies keep charging the same 15–30% commission? Or does pricing naturally come down because the cost of delivery has changed?

Maybe agencies become more profitable because they can handle far more roles with the same team. Or maybe everyone has access to the same AI tools, competition increases, and margins shrink.

It almost feels like recruiting could shift from being a people-heavy service business to something much closer to a software business.

We're still figuring this out ourselves, so I'm curious what others think.

If you own an agency, have you started thinking differently about pricing because of AI?

And if you're a founder, would you still be comfortable paying traditional placement fees if most of the recruiting process was automated?

We run a recruiting agency, and this is something we've been discussing internally a lot.

A huge part of what justified agency fees over the years was the amount of manual work involved. Finding candidates, screening resumes, coordinating interviews, following up, keeping everyone in the loop. It was a people-heavy business.

Now we're building and using AI workflows that automate a surprising amount of that work. Sourcing, matching, screening, interview coordination, follow-ups, and a lot of the repetitive recruiting operations can happen with very little human effort.

It makes me wonder what happens to the business model over the next few years.

If it costs significantly less to deliver a successful hire, do agencies keep charging the same 15–30% commission? Or does pricing naturally come down because the cost of delivery has changed?

Maybe agencies become more profitable because they can handle far more roles with the same team. Or maybe everyone has access to the same AI tools, competition increases, and margins shrink.

It almost feels like recruiting could shift from being a people-heavy service business to something much closer to a software business.

We're still figuring this out ourselves, so I'm curious what others think.

If you own an agency, have you started thinking differently about pricing because of AI?

And if you're a founder, would you still be comfortable paying traditional placement fees if most of the recruiting process was automated?

I work adjacent to hiring and I've had a front-row seat to this exact movie dozens of times: small company finds a great candidate, candidate seems genuinely excited, then a bigger brand shows up and the candidate vanishes. The owner concludes "we can't compete with their salaries" and lowers their hiring standards.

Except when you actually talk to the candidates afterward (I have, many times), salary is the deciding factor way less often than you'd think. Usually the gap was 10 to 20%, real, but not decisive. Three other things decided it:

1. Speed. This is the big one and it's completely free. The big company ran interviews on Tuesday, decided Thursday, offer letter Friday. The small business took 11 days "to be sure," and every one of those days, the candidate's brain was doing the math: if they're this slow deciding on me, how slow is everything else there? Speed reads as competence and conviction. Slowness reads as chaos, even when it's actually carefulness. If you can't decide in 3 to 4 days with your company size, the process is broken, not the candidate pool.

2. Somebody senior closed them. At the big company, after the offer, a director got on a 20-minute call, no agenda, just "here's why I'm excited about you specifically." The small business sent a PDF. You have an unfair advantage here you're not using: the owner can make that call. A founder saying "I want you, here's the plan for your first year" beats a brand logo more often than you'd believe. The big company fakes intimacy at scale; you actually have it and don't deploy it.

3. They sold scope, you apologized for size. The big brand pitched "you'll own X." The small business said "we're small, we can't match big company benefits, but we're like a family." Never do this. The honest pitch is stronger: "You'll do the work of a senior person two years early, with the title and story to match. At the brand-name company you'd be maintaining one component of one feature." Some candidates want the safety, fine, they were never yours. The ones who want the scope are your people, and half of them just never heard you say it.

The salary gap is real but it's the tiebreaker, not the decision. Speed, a personal close, and an unapologetic scope pitch cost you nothing and flip more of these than any raise you can afford.

Happy to answer questions, and if you've lost someone to a big brand recently, tell me how the timeline went. I'd bet money on where the 11 days were.