21st August 2023

AI gig economy platforms: Should recruitment agencies fear or embrace?

AI, Recruitment

Agencies under threat from online AI-powered platforms

One aspect of AI that is of great interest to the recruitment sector is the continuing development of freelance job matching websites. This type of AI-powered gig economy platform is gaining popularity.

Generally, this type of online tool allows people to find short-term temporary or contract work by using algorithmically-driven automation to make matches and suggestions for suitable roles. This is creating new opportunities for people who want to work on their own terms, but it’s also leading to concerns about job security and income inequality.

Some examples of the most popular AI-powered gig economy platforms include:

These platforms are making it easier for people to find work on their own terms. However, they also allow candidates to bypass recruiters, or as some might put it, ‘cut out the middleman’, reducing employer costs for hiring.

This might provoke familiar ripostes about the value of the recruitment industry to employers, such as saving time and providing specialist search and selection services, including screening, background checks, psychometrics, and other candidate evaluation data. Such a service offer is invaluable to smaller firms that are unable to fund a fully-fledged in-house HR function.

But in a climate where businesses are looking to cut costs, hiring gig workers directly with only minimal employer liability and obligation to workers is likely to be an attractive proposition to companies looking to grow their bottom line.

The implications for recruitment agencies

AI-powered gig economy platforms have a number of implications for the recruitment industry and agencies, both upside and downside.

Here are some of the chief pros of AI gig economy platforms for recruitment agencies:

Opportunities for the recruitment industry

Challenges are part of the package too!

Here are some of the main cons of AI gig economy platforms for recruitment agencies:

Should recruitment agencies fear or embrace AI gig economy platforms?

Ultimately, whether recruitment agencies should fear or embrace AI gig economy platforms depends on how they choose to respond to these challenges and opportunities.

Here are some tips for recruitment professionals who want to stay ahead of the curve:

Streamline your agency back office with ETZ

The automation features of ETZ RecTech tools promote efficiency and have paved the way for the emergence of sophisticated AI NLP search and selection tools that are emerging to power the front side of agency operations.

ETZ’s leading timesheet and invoicing solution, streamlines the back office processing of your recruitment agency. Our complementary solutions, ETZ Comply for onboarding and document management, and Caspian for business intelligence give agencies further capability to streamline and uncover opportunities. To find out more call us on 0800 311 2266 or book a demo.



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