SIA Report: The Digital Workforce in Recruitment 2026

0:00When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a $75 sponsor job credit at Indeed.com slash podcast. That's Indeed.com slash podcast, terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. How digital recruiters are moving from the fringes directly into the recruiting lifecycle next on the Rectake podcast. Welcome to Rectake. The podcast for recruiting and technology intersect. Each month you'll hear from vendors shaping the recruiting world, along with recruiters who are telling you how they use technology to hire talent. Well, here's your host, the man's site, is the online recruiting Chris Russell.

1:03Welcome to the only podcast helps employers and recruiters connect with more candidates through technology and inspire conversations. Mastering technology is the key to hiring great talent and that's why my show exists. This episode is sponsored by Dahlia, who's ready for a co-harp fact. Indeed, pricing model and or programmatic job advertising is based on driving volume. It's a job. Job work to get paid on clicks and applies, not hires. Their incentive is essentially more volume. That's what happens with volume based pricing models. All that volume creates exactly what you'd expect. Mass and efficiency, mountains of unqualified applications and ways to spend. Meanwhile TA teams know their career site is already their best source of quality applicants who get hired. TA teams that invest in their career sites and employer brand, but the outdated technology makes it too hard for people to connect and apply. Well, Dahlia fixes that. Millions of job figures use Dahlia every month to seamlessly connect to employer career sites and apply to jobs using their universal candidate profile.

2:04No re-entering information over and over. It's like a shop pay button, but for jobs. It's secure. It integrates directly into your ATS and it works instantly on any career site. Employers using Dahlia can double their conversion of career site visitors and take off at applicants and hires. People hires you from the traffic you already have. That's how you start cutting your depends on indeed. Learn more at Dahlia.co. It's D-A-L-I-A.co. All right. Joining me today is John Northland. He's the executive director of Global Research at Staffing Industry Analysts. John has spent more than three decades in the staffing industry. And he is just author to a Global Research Report titled the Digital Workforce in Recruitment 2026. In it, he maps out how digital worker agents are moving directly from the fringes, directly into the recruiting life cycle. And today we'll break down why the feature isn't about fully replacing human recruiters, the hidden risks of AI sprawl and compliance liabilities and how leaders must learn to manage a mixed workforce of employees, contractors and algorithms.

3:04John, welcome to the podcast. How are you, my friend? Yeah, hi. Very good. Thank you. He joins us from the UK. And John, before we start, well, my first interaction with SIA on the podcast, just tell me what the audience would you guys do there? Yeah, well, we're a research company and we focus on staffing, SIA stands for staffing industry analysts, but also other workforce intermediaries. So our clients could be staffing firms, could be other intermediaries like job boards, but also importantly, the customers that they serve as well. So we also provide research to enterprise customers, large organizations that employ different types of workers, contingent workers globally. Yeah, so that's our focus. Very good. Now, in the report, you define digital recruiting as recruitment focused digital workers. I'm just going to get from that actually perform recruiting rather than simply improve analyze or support the work of a human user. He's can include AI agents, conversational recruiting agents, RPA bots and multi-agent systems

4:09here. You emphasize that digital tools are replacing recruiters end to end here instead of decomposed quote, into automated tasks. So what are the natural limits of today's AI agents, John and what tasks should they just strictly remain with human recruit here? Let's talk about that balance, human loop. Yeah, well, I guess the reason that what prompted me to write the report was, you know, this is a very fast emerging space. It's already confusing. Yes. We looked around and there's over 180 vendors already. So, you know, a year ago, none of us really knew what an AI agent was. Now, we're being bombarded by opportunities. People will help you in some way with some sort of digital work. So I wanted to look at that more closely, in particular how impact in recruitment and also to try and what one of the roles that we play is to try and shape the market so

5:11that people can understand how the different bits fit together. So as you said, you know, when we looked at what was happening in the digital work force as a relates to recruitment, there were two core things. One was AI agents and AI agents is the term that's getting all the news, all the publicity. So there's so much that's still being done through our fashion to RPA bots, so robotic process automation. You know, that still plays an important role. A lot of those automation vendors, that automation anywhere, UI path, they still do play an important role. And indeed, they can do more useful things when it comes to digitizing processes compared to AI agents. So they're both important and they're also both merging as well. So if you go to any of those RPA providers, you will only get RPA solutions, you will get agentic solutions as well.

6:15Another confusing part of what's happening is there are AI agents and there is agentic AI and they're not the same thing. So an AI agent may have agentic properties or it may not, it may be some other form of AI. Agentic AI is a system that self learning, it continues to improve without having to be reprogrammed and an AI agent could be created in that way. But mostly AI agents are more old fashioned machine learning sorts of tools. So there's a few things to help try and clarify processes. When we looked at what was happening, the front end is really AI inter viewers and screening agents, that's where a lot of the vendors are operating. We can see a lot happening with applicant tracking systems, ATS, a lot of the vendors there are started to create their own AI tools.

7:18There's certainly a whole community of vendors who are specifically addressing the staffing industry that's sourcing and outreach agents as well. There's a few regional vendors as well. A lot of the global market is in the US, but about half of the vendors that we identified are operating outside the US. There's a lot in Japan, a lot in Europe as well of course. When you asked about will they displace human recruiters? We don't think that's going to happen. If you look at anybody that is thinking of using an AI agent or recruiting agent, then you'd need to think about how it can complement your existing workforce. An AI agent can be very efficient in terms of sourcing, screening, in conducting conversations.

8:19It can match well, it can do outreach, it can make recommendations. But then you still need a human worker for judgment, for relationship building, for persuasion. My old boss always used to say that if recruitment was about putting square pigs into square holes, it would be really easy, but it's always a compromise. It's always a negotiation. Nobody ever gets the perfect job. It's always a matter of compromise and you need some intermediaries to persuade you that it's not quite the salary you were looking for, but it's good enough surely. No employer ever gets the perfect employee, the employer always has to compromise. They don't have this particular skill, but they do do this and this. Recruitment is an iterative and complex process. I don't think humans ever get lost in it. An underpinial that is, as I said, the RPA bots as well, do a lot of the core processing underneath what the AI agents are doing.

9:20I used to call it three years ago when AI was a big buzzword. I used to call it automated intelligence because at that point it was really more automated versus artificial when it came to doing a lot of these things. Let's break down the recruiting agents chart here in your report on page 11 and we'll throw a link into the audio as well for the audience in the show notes. Let's break it down here. What are the recruiting agents here? They'll start with the AI interviews and screening agents. Who's to me is the one number one category. I think I see new software. It's okay. They're screening through AI. It takes us through this. You can categorize it in a number of different ways and this is what we chose to do when looked at the different vendors that are available. As you say, the AI interviews and screening agents say it tends to be top of the list. Then you've got the ATS CRM platforms and they're embedding recruitment agents and modules now. Then there's a whole conversational with recruiting agents and chat bots.

10:24Of course, chat bots have been around for a while but they are a lot more sophisticated. Now, there's latency in the conversations that used to be the case of almost being eliminated. They're all going into data centers. I guess they've improved that. There are a lot more prominent, a lot more useful than they have been. Then there are some specialisms. There are a few agents specializing the healthcare segment in particular because that's a heavy credentialing required in that particular part of the market. There's a number of vendors that specializing in high volume, frontline recruiting as well. You can understand that's a sweet spot. That's where having automation and efficient processes can really help. There are legacy acquired in Betty Digital recruiters as well. They didn't start as well as being AI agents but they've evolved into that.

11:27Another important part of the market is multi agent and orchestration platform. Most organizations, sophisticated organizations are not using one agent. They're not using one recruiting agent. We're using a range of different agents to do different things. What you need is to orchestrate those various agents. I'm not surprising a number of vendors have stepped into create a platform to help you manage your AI agents. I guess in the same way that when it comes to contingent work, you've got vendor management systems, you've got applicant tracking systems, a permit work, orchestration platforms, all those AI agents that you're using. There's a number of regional, local language providers as well. If you're looking for a Japanese AI agent, you can certainly find one. Again, a comeback to the RPA, which are more execution related.

12:29We categorize something in our reach agents as well. They're automating the whole front end part of recruitment and finding candidates, enriching profiles, ranking fit, generating outreach, sending messages, managing follow-up. That's a fascinating area there. I think it's one that is really good for an agent. Have you seen any examples of those that pressed you out on the wild there? I would like to pick out different vendors because we have a number of them who are clients about. I wouldn't like to promote one above another. There are certainly some very impressive new products that are available and it's fast-moving, as I said. If you are interested in this space, then it's a good place to start. We're getting hold of a copy of our report. If a member of our service is because there are 180 vendors listed and they're all categorized according to the categories that you can see as you're showing on the screen.

13:36Is the report free, by the way? Sadly not. Well, it's free if you remember of SIA. I did. I did. I subscribed to our services, which of course we've got a world of useful information on this topic and many other topics as well. Yeah. In the report, you identify over 180 vendors in space as you said. You weren't against buying point solutions staged by state because at least the AI sprawl. Inter-interation nightmares. Why do digital transformations in recruiting fail? And how should leaders approach operating model with these different vendors like there? Because it's such a hot pod right now of stuff, John. How does a typical employer integrate all of this? Yeah, with the danger you end up with AI sprawl because within large organizations, you've got every department that's looking at what is AI doing. What does it mean to me? How can I take advantage of it? And so you've got different people within an organization potentially investing in AI agents to do different things and it's not coordinated.

14:44And it clearly needs to be. You know, what can go wrong? Well, you know, this is a transformation exercise. What can go wrong is that you're not consulting your own workforce about how to do this well. You know, your workforce, they are the ones who are knowledgeable about where the efficiencies are and where automation can improve what they're doing. If you're not involving them, you could be missing out on opportunities, but even worse than that, they're going to be worried about whatever you're doing is going to replace their job. So you need to make sure that they're actively involved in the process. Having a, not having a clear business case, you know, just being sold something by a good salesperson who impresses you with a few impressive demos, rather than having a clear business case upfront. And so, you know, not, not being ready to take advantage of it.

15:46I think a lot of organizations are still in a, in a place where they are needing to make sure that their systems, that their own data is tied enough that they can actually benefit from any form of digital recruitment. So, you know, it's not a, it's not a, it's a, sometimes using different definitions for the same thing as well. So all that needs to be tied it up. We do actually have within SAAA tool, which our members can use, which is a surfing, a staffing them AI fitness assessment. So even before you go out and buy a digital recruiter, then you can actually determine how ready you are going to be. So I mean, how ready you are to embark on that integration with things to go on course integration is one of the biggest use in any, any software deployment. So I'll say those are the main ones.

16:47Yeah. In terms of region's shine, US versus UK or EU, do you see any differences there in terms of adoption rates right now or what's that like, would you say? Well, I think the US is probably more advanced in many respects. It's only got more vendors. Yeah. You know, the US is always at the advantage because it's one big market and it can grow vendors can grow across the whole of the US. Such a big economy. If you're a French vendor, then you know, you're in French language and you can sell in France. Maybe if you are the parts of the world that speak French, but you can't scale as much as America, US vendors can. So the US is probably more advanced and be a mistake to think that the rest of the world is not taking advantage of this. And of course, a lot of those US vendors are selling their products globally anyway. So yeah, I'd say the market is more developed, but maybe the people that are using these tools are, you know,

17:51just as proactive outside the US. What about staffing versus corporate? Do they staffing firms? Are they more aggressive with this or are less aggressive to adoption? Yeah, well, I hope they are. And frankly, if they're not, then they don't deserve to keep their clients if they're allowing their clients to invest in software. When using these types of products better than they are, then they don't deserve it's exactly what happened in the US. So there are risk here. You'll recall this from the world you come from job boards, you know, for the fear was when job boards first appeared that staffing firms felt that they might lose their business because clients would just go directly to a job board. You wouldn't need to go to a staffing firm. All that happened was that staffing firms actually became one of the biggest users of job boards and became one of the most more sophisticated users of job boards. So staffing firms need to make sure that they're headed their clients in using technology, not just that it comes. It comes to AI agents. Yeah, let's talk about the legal risk and exposure here, John.

18:54Yeah, with the legal falloff from the issues like PA full-class actual lawsuit worked as well and rising bias privacy regulations. How should TA govern high risk workflows and like automated screening, ranking and AI live interviews here? Can you give me some thoughts around that? Yeah, well, I think I would say you should be nervous about it because legislation is changing across the world. And the US is a sort of patchwork of different legislation when it relates to AI state by state. But as we've seen, you don't need AI regulation to be sued by somebody. There's a lot of existing legislation already in place, which means that if you do something wrong, if you're using software that discriminates unfairly in any way, then you can be sued whether this AI regulation or not. So add to that all the AI regulation that comes on top of it, then you know, it's a disaster waiting to happen.

19:56So you need to be confident, you know, that you understand the algorithm that you're using, especially if that algorithm is being used to rank and recommend candidates. That's a particular high risk area. You need to be able to explain the algorithm. You need to make sure that the vendor has explained it properly to you. You need to make sure that the vendor has got bias monitoring in place. And especially if they're using a genetic AI, you know, they may have a bias audit that they did last year that said they were wonderful, but with the genetic AI, as I mentioned earlier, that's that self learning. So what it did last year might not be relevant to what it's doing today. So you need to monitor that on a consistent basis. Of course, we're all familiar with the phrase human in the loop these days. You should be doing anything without having a human in the loop. You need audit trails and you know, you need data security as well. Of course, there's a risk that you're not controlling the way that people are accessing this information.

20:59So here's a bit of a bit of a mind field. And so you need to be very careful. Yeah, definitely. Looking forward, you predict senior leaders will make a, imagine a single integrated workforce here. Made up of employees, contingent labor and digital agents. So how must you know, what are the tools that are going to look like here from a VMS standpoint? And how you're going to supervise algorithms alongside people and these thoughts around that. Yeah, I'd say it, I guess it goes back to the point I mentioned earlier that it's slightly uncoordinated within large organizations. In fact, the whole workforce is disorganized within large organizations. If you look at, you know, you've got one, one group of people, the HR department, they're hiring permanent employees. When it comes to contingent workers, such as temporary agency workers, that might be it might be HR might be somebody in procurement. If you're looking at consulting work, well, that's not in HR.

22:03It could be anybody in any department that's actually bringing consultants on board. And now you've got these new digital workers who could be coming from any sort of direction. So how are you managing all of that? How are you tracking performance? How are you understanding whether or not you are performing efficiently? If it's all sort of disorganized, so you need owners, you need permissions, you need operating boundaries, you need audit trails, you need performance standards and escalation rules. So you've got to wrap that around these different types of workers. And certainly in our industry, we've been talking for many years about total talent management as a sort of Navarna where organizations have to get to. Because they don't manage talent in an effective coordinated way. And we're slowly getting there, but there's still many silos within organizations that, and the improvements have been made. I mean, I guess that's a big opportunity for everybody. Anybody operating in this space, helping your clients reach that Navarna where they can manage all the different types of workers, human workers, digital workers in an effective way.

23:20That's the point where we're kind of like at this inflection point where we're starting to basically humanize software now essentially right in the in these in these companies and it's it's kind of unknown territory now. This is all new to us. Yeah, it's kind of fascinating to see how it's all shifting here and shaping. Yeah, another point I think is interesting, which the report didn't didn't cover, but I think for a lot of intermediaries as well. It's are they going to bother to supply these digital workers themselves? So eating a staffing firm since I think of job boards. They're provided humans to their clients. Yeah, I've already seen a couple of job boards that offer digital agents for hire. There are. Yeah. So you you familiar with rent a human AI. Yes. Yeah. So that's a scary sort of concept we've actually got AI agents hiring human workers to perform tasks. So yeah, so the world's topsy-turvy. Definitely.

24:20A lot of new vendors, I mean, I don't I don't think they're all going to survive. I mean, it's like a gold rush right now, but it feels very saturated to me would. Yeah. You agree? Yeah, well, it's already an overcrowded space. It went, it went from being an innovation to a commodity in a matter of months. Yes, it did. Yeah, really quick. I would agree. The vendors there that are not going to survive and. Yeah, I'm I'm not a and AI programmer. I can talk about the environment and the application of it and how it might be used. But it seems to me that it must actually be quite simple, relatively simple to create AI agents, which is why in the report, we talk about the fact that many companies are starting to build. Rather than buy these solutions, so you can go and speak to any of the vendors that I mentioned in the report, who's got a really made solution for you.

25:20But there are many platforms that enable you to build your own AI agents. If you're a if you're a user of Microsoft, if you use Google, use Amazon, if you use Salesforce, they will all help you to develop your own AI agents as well. I think it's a big decision for a lot of organizations. Do they have to go do they go out and buy something? Or should they build something? Yeah, I went to a finance conference last year and and I was two years ago when they came out always AI agents. And it just seems like adoption really isn't has a caught up with the vendors right now as far as what they're pushing out into the market. HR moves is very slow in my opinion. They move slow. Change is hard for them, John. Just initial thoughts around that in terms of when when is the when is the curve and when is the hockey stick going to go up here in terms of like mass adoption? Are we two years away? Three years, four years, five years?

26:20Yeah. Well, mass adoption. I mean, we can see when we look at that AI interviewers, those chat box, you can always you can see those. You know, you could say that there's mass adoption already. I think for some of the more complex tasks, it will take a little bit longer. Well, you know, things are moving so fast. Three years sounds like a particularly safe period to say that there will be a significant transition. But as I said, my expectation isn't that, you know, all of a sudden everybody's going to be using digital recruiters. We're going to be using human recruiters who are enhanced and improved by digital workforce. Yeah, we're good. We should appreciate time to join you going to be traveling anywhere you're going to each our tech at all in Las Vegas or. No, I'd come to the US often enough by going to that. We've got our own events, of course.

27:21We've got collaboration X coming up. Yeah, that's a big conference where we talk about the impact of AI in particular. I am speaking at an event in London in October as well. A job board related event. So if you want to come and see me speaking person, you can come and join me there. All right. Well, again, we appreciate your time today, John. You can find your port at staffingindustry.com, I think, right? That's right. Yeah, we appreciate it, John. And have a great day. And thanks to our thanks for connecting. Yeah, thank you. That will do for this episode of the work to podcast for the fall and thanks to Andy Dahlia for their sponsorship as well. Antelru, be sure to follow myself and right take immediate on LinkedIn. See every podcast and blog we publish. Thanks for tuning in. I remember always beer critting. Another episode of Rectech is in the books. Be sure to rate a review on iTunes or Spotify. Connect with Grisel LinkedIn or visit RectechMedia.com, or you can find the audio and links for this show on our blog.

28:24RectechMedia's mission is to inform the modern recruiter. So be sure to check out our other sites, recruitingheadlines.com, HRNewsfeed.com, and at HRTechFeed.com to stay on top of the recruiting world. Thanks for listening and we'll see you soon on the next episode of Rectech, the recruiting technology podcast. Fall has never looked or tasted this good. Sweet Greens Fall Harvest Menu is back with seasonal favorites, dress to impress and made to be devoured. Warm roasted sweet potatoes, crisp apples, maple glazed brussels, and crave worthy flavors in the autumn harvest bowl. Maple Glazed salmon plate and roasted bacon brussels side. The season's most desirable menu has returned to sweet green. Featuring Fall's best dress. Make your move. Order on the sweet green app. When you shop pick up at Fred Meyer, you can expect the savings you love and fresh groceries selected just for you.

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