Key takeaways:
- Tech transformation is accelerating: With 76% of recruiters planning to change their current recruiting system and AI tools leading new investments, staffing leaders should prioritize integrated, scalable platforms that link tech spend directly to recruiter productivity and revenue impact.
- AI delivers results, but demands responsibility: Widespread AI adoption is boosting speed, quality, and productivity, yet governance around fairness, privacy, and transparency will determine long-term trust with clients and candidates.
- Data and skills are the new competitive edge: Upgrading analytics to predict outcomes and embracing skills-based hiring will help staffing firms enhance quality, improve diversity, and position themselves as strategic talent partners.
Despite economic uncertainty, hiring remains resilient. According to Employ’s 2025 Recruiter Nation Report, nearly three-quarters of recruiters are hiring at or above 2024 levels, with optimism especially high in technology and manufacturing sectors. But that optimism comes with increased competition for candidates and quality shortages.
The demand for talent continues, but the rules for how to find and engage that talent are changing fast.
Tech investment is key for growth
Nearly four in 10 (39%) of recruiters now prioritize tech investment, a significant increase from 25% in 2024. In addition, 52% plan to boost tech investments within the next 12 months, with AI recruiting tools (67%) leading the charge.
Meanwhile, satisfaction with current systems is declining, with recruiters citing limitations in flexibility (39%), candidate experience (38%), and AI functionality (37%). Perhaps due to issues like these, 76% of respondents expect to replace their primary recruiting system within the next two years.
For staffing leaders, it’s prime time to evaluate integration and scalability across platforms. Firms that consolidate their systems, leverage AI to improve candidate matching, and measure ROI beyond efficiency will connect tech spend directly to revenue and recruiter productivity.
AI needs accountability
AI has become mainstream in recruiting. Two-thirds of recruiters (65%) now use AI tools, primarily to help write job descriptions (41%), communicate information (41%), and support recruitment marketing (39%). And many are seeing the payoff — 55% report faster time-to-hire, 53% higher quality candidates, and 49% recruiter productivity boosts.
However, Employ’s data shows that adoption must be paired with governance. Nearly half of organizations now have formal AI governance policies, focusing on privacy, compliance, and human oversight, while 38% are piloting such policies.
So while AI can directly improve recruiter efficiency and client delivery for staffing agencies, freeing teams to focus on relationship-building, transparency and trust will be key differentiators. Clients and candidates will want proof of privacy protection and fair hiring practices as tech use increases.
Data should drive strategy
Employ’s report also reveals a gap between data collection and data-driven decision-making. While 82% of recruiters use analytics to improve their recruiting strategy, most (79%) still use spreadsheets for reporting. Many use a variety of productivity tools for this purpose, making it challenging to measure key decision-driving data like quality of hire.
The strategic opportunity here for staffing leaders is upgrading analytics capabilities to move your firm from reactive reporting to proactive forecasting. When you can show clients how your placements perform — and predict who will succeed — you elevate your firm from vendor to strategic partner.
Skills-based hiring boosts quality and diversity
Skills-based hiring is on the rise, with a full 91% of organizations now evaluating candidates by skills rather than degrees. Early adopters are already seeing returns:
- 65% report improved candidate quality
- 51% report faster hiring processes
- 48% report stronger diversity
For staffing agencies, this trend is transformative. It opens wider talent pools, aligns with client DEI goals, and helps firms build resilient, future-ready teams. The challenge lies in creating consistent ways to measure and validate skills across clients and job types.
Action steps for staffing agencies
- Invest strategically in technology: Consolidate systems, prioritize AI-enabled tools, and measure ROI in terms of both speed and quality.
- Lean into data fluency: Build analytics that forecast outcomes, not just report activity.
- Adopt skills-based frameworks: Help clients embrace competency-based evaluation to improve diversity and placement success.
- Stay agile in leadership: Revisit your talent acquisition strategy quarterly — not annually — to keep pace with tech and market shifts.
For more findings and insights on the current state of recruiting, download Employ’s full 2025 Recruiter Nation Report.
