How Search Firms Are Positioning for a 2025 Rebound
April 16, 2025 – As the executive search industry weathered another difficult year, the most successful firms stayed focused on gaining market share and protecting margin as they waited for job requisitions and market confidence to rebound. In spite of these global challenges and, perhaps more importantly, pervasive market uncertainty, some firms saw success, and many are building a foundation for even better performance in the future. For Bullhorn’s 15th annual GRID Industry Trends Report, they surveyed more than 1,500 recruitment industry professionals across industries and around the globe to uncover the most effective strategies in today’s business environment.
The report found that 2024 was another tough year for recruiting. Forty percent of firms saw revenue growth and nearly a quarter saw growth of 10 percent or more in spite of the challenging market. But one-quarter saw declines. And the number of revenue winners was down year over year for the second year in a row. Most firms remain optimistic about the future, with nearly 70 percent predicting that revenue will increase in 2025 — interviews with recruiting leaders suggested many anticipate growth in the second half of the year.
The interviews also revealed that many now predict the recovery may not mean a full return to historical, pre-pandemic norms. It is worth looking at how firms are positioning their businesses for success while facing an uncertain future, according to the Bullhorn report. Although attracting new clients is the number one priority across the board for 2025, firms have learned they cannot rely solely on revenue from new clients to drive performance, and they need to find new ways to add value through new solutions and services. Seventy-seven percent are focused on increasing market share to be well positioned when the market turns upward. Bullhorn found that the next two most popular strategies for driving financial performance are improving recruiter productivity using technology and diversifying business lines. The former reduces expenses, and the latter typically means a shift to higher revenue or higher margin services, all of which boost the bottom line.
“Firms across the world were concerned about the economy and the tight recruitment market that has persisted for nearly two years, leading most to prioritize attracting new clients over all other concerns,” the Bullhorn report said. “Beyond retaining and developing new business, firms remained focused on accelerating and improving the talent experience, benefiting candidates while also enhancing productivity. To accomplish both, firms are relying on automation and increasingly AI to achieve their critical priorities.”
The Bullhorn report also found that most firms still remain in the early to intermediate stages of digital transformation, in spite of widespread acknowledgment that it is necessary to truly unlock the potential of recruiters and databases. For the first time since 2023, the number of firms that say they are in the advanced stages of digital transformation has actually fallen, from 21 percent last year to just 18 percent this year. This likely reflects the advent of AI technology, which has upped the ante on what digital transformation entails. It also reflects the difficult reality many of Bullhorn’s interview subjects shared: that as part of their efforts to reduce SG&A expenses, they have had to reduce technology spend in 2024 — a trend that may continue in early 2025. But firms remain committed to investing in technology that can improve productivity, as long as they see demonstrable ROI.
Automation Correlates with Revenue Growth
This year’s survey shows that automating key tasks does correlate with revenue growth — perhaps especially in these challenging economic conditions. The top-performing firms were 57 percent more likely to be in the advanced stages of digital transformation than those that saw the biggest losses, with automation being a crucial aspect of this digital transformation. At least twice as many firms that automated tasks like searching for candidates to match to jobs or screening applicants saw revenue growth of 10 percent or more (compared to those who lost 10 percent or more). And those firms explicitly focusing on using technology to improve recruiter productivity were almost twice as likely to have realized the most revenue growth, the Bullhorn report found.
In spite of the operational and financial benefits, a substantial percentage of firms still don’t have technology in place to automate tasks like search and match or candidate screening — and there is an even bigger gap for sales and middle office, the Bullhorn report found. This aligns with the finding that digital transformation efforts have largely stalled as the recruitment industry has slowed down. “Now that the recruitment industry appears to be stabilizing at lower volumes and a slower pace of growth, productivity and efficiency will be more important than ever,” the study said. “Technologies like these will offer an opportunity for teams to work more efficiently as the economy stabilizes.”
Automation Critical to Faster Placement Time
Automating key tasks in the recruitment process clearly results in faster time to first placement. The Bullhorn report found that firms that have automated searching for candidates are 50 percent more likely to have an average placement time under 20 days compared to those not using automation. And automating screening correlates with an 86 percent greater likelihood of having placement times under 20 days compared to those who don’t automate. “Across the board, automation seems to mean faster placement times, and that is with current automation tools — AI recruitment agents are only going to widen the efficiency gap,” the study said.
When asked to rank which of their day-to-day processes they would most like to automate, firms chose searching for candidates and matching them to jobs. A close second was winning new business. Across the recruitment industry, search and match is largely seen as the most valuable use case for both automation and AI. Again, this is not surprising since respondents also list this as the most time-consuming task performed by their recruiters; the survey found that a recruiter spends 14.6 hours per week searching for the right candidates, based on a weighted average of the survey responses.
AI Really Will be a Game-Changer for Recruitment and Drive Revenue
The 2025 GRID Industry Trends Survey showed clearly that early and extensive adoption of AI agents correlates with revenue growth and recruiter productivity. Right now, 15 percent of firms have purchased or developed AI solutions of some kind, and another 52 percent are experimenting with generative AI on some level — so more than two-thirds are using AI as part of their business, as compared to 59 percent last year. Only 16 percent say they haven’t yet begun using AI — down from 20 percent last year. And every single recruitment executive interviewed this year spoke at length about AI and how it has already become a necessity rather than an upgrade.
“A little less than half of firms have been using AI tools like ChatGPT to help with recruiter tasks like generating emails and summarizing candidate skills,” the Bullhorn report said. And 45 percent of firms are already experimenting with AI to sort through candidate resumes and submissions to find the best ones to screen for individual jobs. In speaking with firms, Bullhorn learned that most feel search and match is likely to be the first and perhaps best use case for AI, especially when recruitment-specific tools trained on their own data are available — 27 percent of those surveyed listed search and match agents as the future recruitment tool they expected to have the biggest impact on recruiter productivity, by far the most popular answer.
Related: Forces Shaping the 2025 Dealmaking Boom
Firms that reported revenue gains in 2024 were more likely to already have AI in place to help with key tasks like matching candidates to jobs and screening candidates. And those choices are already yielding clear benefits. As AI for recruitment becomes more sophisticated, these differences will likely become even more stark, especially with 30 percent of firms saying recruiter productivity is the biggest obstacle to reducing expenses, according to the Bullhorn report.
Thirty-six percent of firms say data limitations are the biggest barrier to AI benefits. When asked what stands in the way of widespread AI implementation, firms overwhelmingly cite data-related concerns, either siloed systems (eight percent) or the underlying data hygiene (28 percent). “This echoes what customers have shared: that there is a lot of data clean-up and data governance work that needs to be done to really reap the rewards of AI in recruitment,” the Bullhorn report said. “It is likely that this work, driven by AI, will be the push the industry needs to make significant progress on its digital transformation journey.”
Growth and M&A Activity to Surge Across Recruitment Sector In 2025
Hunt Scanlon has released a bullish report on the multi-billion-dollar executive search industry – forecasting a big uptick in growth, and deal making activity, through 2030. Hunt Scanlon’s chief market analyst, Evan Berta, takes a closer look at the key drivers, growth prospects, and opportunities ahead.
When asked how much time recruiters currently spend on common tasks and how much time AI could save them, it is clear that firms expect a significant impact from AI tools. With responses suggesting 4.5 hours per week time savings from search and match, and 3.6 each for screening and administrative tasks, the effect adds up quickly. Bullhorn also found that firms predict that AI infused throughout the recruitment workflow could result in an extra 17 hours per week for each recruiter. The operational and financial benefits to be gained align perfectly with the value firms indicate they expect to see from AI, with 22 percent saying they hope to see increased recruiter productivity and 21 percent looking to scale without adding headcount.
Related: The Evolution of Executive Recruiting in the Age of AI
A recurring theme across all Bullhorn’s conversations with recruitment executives this year was the importance of balancing technology with the human touch and specialized expertise. Several of the executives they spoke with made it clear that, in order for AI to work for them, it would have to be highly customizable and trained on their data, allowing each firm to leverage its own “secret sauce,” while accelerating and streamlining their workflows. “Additionally, everyone was clear that AI is a tool to speed up how quickly recruiters can connect with the right candidates, so they can focus on the relational work that made them want to join this industry in the first place, preserving the differentiator that really attracts and engages talent for the long run,” the report said.
Faster, More Accurate Placement and Redeployment Delights Talent — and Drives Revenue Gains
Overwhelmingly, candidates say faster placement in the right job is the most important thing to them — this was clear in the 2024 GRID Talent Trends Report. It turns out that firms that saw revenue gains in 2024 were laser-focused on meeting those expectations and truly delighting candidates. The result was gains in productivity and financial performance.
According to the GRID 2024 Talent Trends Report, 80 percent of candidates want to be placed in less than 20 days — and 39 percent in one to nine days. But how are firms doing at meeting that benchmark? 59 percent report an average placement time of less than 20 days, and 27 percent in one to nine days. Revenue winners are 21 percent more likely to be under that critical 20-day threshold and almost 40 percent more likely to exceed expectations and place candidates in less than 10 days. On the other hand, almost half of firms that lost money in 2024 were above the 20-day mark.
When Bullhorn looked at what impacts time to place, it is clear that the firms that are getting it right are really relying on technology to drive productivity and efficiency. Firms that have automated key tasks or that are infusing AI throughout their workflows were much more likely to be below the 20-day mark for time to place, in some cases making it nearly 90 percent more likely that they met that standard.
“Engaging candidates, having the right job matches, and readily redeploying top candidates clearly result in satisfied talent, but also yield decisive revenue gains,” the Bullhorn report said. “In every category, these engagement and productivity strategies make it almost twice as likely that firms saw revenue gains in 2024. The win-win is clear — and AI agents are just going to make these gains even easier to achieve.”
Diversification has Proven Critical to Preserving Margin
When we drill down to see how firms are diversifying their business lines, Bullhorn’s results support the notion that they are shifting increasingly toward higher-value, higher-margin services that create deeper partnerships with clients. “Qualitative interviews revealed that firms that wish to remain competitive are combining these solutions with their existing services to offer even more value to clients, like combining consulting, project management, and staffing for end-to-end offerings that make them indispensable to clients,” the report said. “But they also made clear they are diversifying into business lines that still play to their areas of expertise. One firm mentioned building on healthcare-related MSP experience to expand into pharmaceutical staffing. Another made it clear that they were identifying all the specialist roles that they had placed successfully in the past and concentrating on expanding in those very specific areas. The most successful firms are clearly focused on competing where they know they can win.”
As Bullhorn noted above, firms are doubling down on diversifying their business lines, looking to add value to their top clients as well as their strongest talent, like executive search candidates. Interestingly, for top performers, executive coaching (35 percent) and consulting (30 percent) topped the list of new services they have added or are planning to add. They were five times as likely to be focusing on executive coaching as those firms that lost more than 10 percent in revenue this past year, and three times as likely to be adding consulting services. “Although this may in part be related to available resources to invest in new business lines and related overhead, it does suggest the success of this high-margin diversification strategy — and most firms report they plan to continue in this direction,” the Bullhorn report said.
Seventy-three percent of firms expect the economy to improve in 2025 — and 61 percent expect that to help the staffing industry. “2024 tried the industry’s patience, with many expecting an economic recovery that didn’t come, but it also highlighted how the strongest firms continue to weather the downturn and find pockets of success,” the Bullhorn report said. “These same strategies will position these firms to thrive as recruitment finds its new normal.”
Related: How Search Firms are Winning Through M&A and Unlocking Value
Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media
