Assumption Check: jobs didn’t go to the machine; they went to the waiting room.
Checking whether AI has actually prevented companies from hiring white-collar workers.
The assumption
Companies have stopped hiring office staff because they believe AI can now handle those jobs.
Graduate job advertisements in Britain fell in the first six months of 2026, Indeed reporting that they had reached their lowest level since 2020. PwC discovered that entry-level positions impacted by AI had come to a standstill, and the company intends to reduce its own US entry-level hiring by one-third over the next three years.
This idea goes beyond just human resources. If software had really taken over, hiring demand would not bounce back as the economy shifts. Companies would keep cutting jobs, reduce pay budgets, and might even end graduate programs and shrink their hiring teams for good.
To check this, look at companies that focus on hiring. Ten public staffing and search firms regularly share data on their fees, hires, placements, and staff numbers. If AI had really replaced people, these firms would now show lower volumes, falling prices, and no signs of recovery.
There are two key terms to know. A ‘Perm’ means a permanent job filled for a client. ‘Net fees’, sometimes called gross profit, are what the staffing firm keeps after paying the worker. Net fees are the best public sign of both volume and price.
What the evidence says
All the companies compare their latest numbers to the same period last year.
| Latest period | Net fees or gross profit, year on year | Perm measure | Own staff numbers | |
| Randstad | Q2 2026 | -2% | Perm fees -5% | Average FTE -4% |
| Adecco | Q2 2026 | +4% | Perm placement -1% | Average FTE -2% |
| ManpowerGroup | Q2 2026 | +2% | Gross margin 16.1% | Not given |
| Robert Half | Q2 2026 | Talent revenue -1% | Perm revenue +2.9% | Not given |
| Kforce | Q2 2026 | Revenue +4.5% | Job orders +18% | Not given |
| Korn Ferry | Quarter to 31 July 2026 | Fee revenue +7% | Search +10% | Fee earners -1% |
| Michael Page | Q2 2026 | -0.2% | Perm +0.2% | Fee earners -80 in the quarter |
| Hays | Year to 30 June 2026 | Net fees -8% | Perm net fees -12% | Consultants -12% |
| SThree | Half year to 31 May 2026 | Net fees -7% | Not split out | Average staff -15% |
| Robert Walters | Q2 2026 | Net fees -4% | Hires per consultant +3% | Fee earners -9% |
Among the ten companies, the median fee change is -0.6% and the average is -0.5%. There is a lot of variation, with a standard deviation of 4.9 points and a range from -8% to +7%. Four firms saw an increase, six saw a decrease, but the sharp drops from the past two years seem to have ended.
The average is pulled down by two companies, Hays and SThree, because they report results for a year or half-year instead of by quarter, and both focus on Germany and permanent jobs. If you leave out these two, the median rises to +1.0% with a standard deviation of 3.7 points.
The numbers for permanent jobs matter even more, since this is where AI was expected to have an effect. Adecco’s permanent fees improved from -7% in the first quarter to -1% in the second. Randstad’s went from -10% to -5%. Both Robert Half and Michael Page saw their permanent fees go up, and Korn Ferry’s search fees rose by 10%.
What is actually happening
Most of the changes are happening behind the scenes, and none involve machines taking over the work.
Outsourcing
The first thing to notice is the type of services companies are buying. It’s the services that have changed, not the total amount. For example, Robert Walters raised its fees for outsourced hiring by 9%. Adecco’s outsourcing and consulting business grew by 10%. Randstad’s similar services went up by 7%. Korn Ferry has 20% more work lined up than last year, even if it hasn’t earned it yet. Contract work now makes up 64% of Hays’ net fees, up from 62%.
Kforce has recruited technical staff all over the United States, and Joseph Liberatore, the company’s CEO, summed up the reason in a single sentence: clients are “increasingly turning to flexible talent models in order to make progress on their large backlogs … since AI is speeding up transformation and CEOs are cautious about hiring permanent staff”. This refers to a queue of work that is waiting for people rather than work being given to software. Randstad tells the same story from the other side of the picture, noting “strong demand for skilled trades, for example, as demonstrated by client wins in the AI and data center sectors”.
Internal job cuts
The next change was layoffs, but it was the staffing companies themselves making cuts, not their clients. Hays ended the year with 12% fewer consultants. SThree cut staff by 15%. Robert Walters reduced its fee earners by 9%. Randstad cut 4% and Adecco 2%. Seven firms reported similar numbers, with a median reduction of 4%. All of them made cuts.
Even though staff numbers went down, productivity per person went up. Michael Page increased gross profit per fee earner by 5%. Robert Walters filled more permanent jobs per consultant each month. Korn Ferry got 12% more new work with fewer fee earners, and Kforce received 18% more job orders and new starts.
Pricing
The third change is about pricing. Michael Page says permanent fee rates are at record highs. Hays reports that pay for staff placed in the UK and Ireland is up 6% for permanent jobs and 8% for contract jobs. People would not pay record prices for work that a machine could do for free. The prices tell the story.
AI does leave a mark
At Robert Half, contract revenue from administration and customer support fell by 6.5%, while revenue from technology jobs rose by 2.4%. Routine office jobs are declining, but tech jobs are growing. The total number of jobs is not going away. David Kelly, president of Kforce, summed it up by saying growth had ‘returned to pre-pandemic and thus also to pre-AI advancement levels’.
Keith Waddell is the head of Robert Half and stated to investors that “artificial intelligence continues to complement, not replace, the work carried out by the professionals we place”.
He also stated that AI has “made it harder for clients to hire” since it overwhelms them with job applications.
His assessment of the market was direct. “Hiring demand is still improving and the market conditions are becoming more favourable to our business.”
Where the old idea still holds true
The perm industry has suffered a significant setback, with Hays’s net fees from perms dropping by 12% over its year ending in June.
The three net fees dropped by 7 per cent in the period.
Michael Page recorded a quarter in which UK gross profit fell 5.3 per cent, France’s by 12 per cent, and Robert Half’s admin line—the one most associated with AI—continued to fall.
The evidence from the graduate candidates points in the same direction; Indeed’s job advertisements in the UK and PwC’s own plan indicate the same thing: they are concerned with entry-level positions that staffing firms rarely take on.
Some parts of this new view are unclear. This is because two of the ten companies report results for a half year or a full year, so the time periods do not match.
Some growth rates account for currency changes, while others do not. There are reasons for staffing managers to sound optimistic. These companies do not track how many jobs their clients have given to software. It is still a matter of personal judgment whether jobs are postponed or replaced.
What replaces the assumption
The assumption is only partly true. AI has removed some routine junior office jobs and made sorting candidates harder, but it has not removed the need for people.
Employers have not given all the work to software. Instead, they keep job openings, look for the same skills as with contract workers, and focus on hiring fewer but more senior staff.
The current situation affects what companies should do. Instead of thinking the market is gone, they should prepare for a slow one. Employers are facing a tougher job market than the news suggests. Since staffing firms have cut their workforce by 4% to 15%, it will take longer to fill jobs when demand returns. Lead times will rise first for senior and specialist roles, then for others. Companies planning to hire in 2027 should start now and be ready to pay record rates for senior staff.
Staffing companies are dealing with a mix problem, not a lack of demand. Contract work, outsourced hiring, and senior job searches are all growing. Michael Page still gets almost three-quarters of its gross profit from permanent jobs, but this could be an issue if the market slows again.
The balance of power has shifted twice. For junior and high-volume jobs, employers have the upper hand because there are many applicants and AI helps sort them. But for senior and specialist roles, workers and recruiters have more influence since fees are at record highs and experienced staff are scarce. Denis Machuel, CEO of Adecco, told investors he is “encouraged by the signs of stabilisation in permanent placements”.
When looking at other companies, competitors should ask three questions. Has their staff been cut so much that they can’t handle a recovery? How much of their fees now come from contract and outsourced work? Which clients have switched from permanent hires to contractors? The first clients to switch back will matter most, and the firm that notices this first will win their business.
What could disprove this?
For the next two quarters, watch six things closely: permanent net fees at each firm, hires per consultant, job orders and new starts (as reported by Kforce), total consultant numbers, the share of net fees from contracts, and both fee rates and pay for placed workers.
Three things could challenge this new view.
- If permanent fees drop again over the next two quarters while contract fees stay the same, it would show that jobs are being swapped for contracts, not just delayed.
- If both fee rates and wages for hired workers go down while the number of hires goes up, it would mean employers are getting the same skills elsewhere, either through software or from overseas.
- If staffing firms hire more consultants but productivity per person falls, it would show that recent gains were just part of the business cycle, not a real shift in hiring practices.
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