AI as a board-level concern: Hays, Mercor and what comes next

Most recruitment boards are having the wrong conversation about AI.

They receive updates from operations and approve budgets when asked. They assume their job is oversight rather than strategy. 

For them, AI sits alongside CRM migrations and reporting tool upgrades as a useful technology to be managed, not a fundamental shift in how the business competes.

That assumption is increasingly expensive.

Oversight isn’t strategy

Treating AI as an operational concern has a specific cost: it limits what you can see. The questions asked at operational level are about tools, implementation, and efficiency. But there are questions that matter more.

Like this one: what happens to your fee model when clients can source candidates themselves? Sourcing is becoming a commodity. Compliance, assessment, and outcome quality are rising in value. Businesses that don't get ahead of that shift will find clients forcing the conversation. 

Or this uncomfortable question around compensation: Commission structures built around process made sense when consultants owned that process. AI is taking it over. If your model still rewards activity and volume over relationship ownership and judgment, you're incentivising the wrong things. 

Then there's exit. Valuations and acquisition attractiveness are increasingly tied to AI maturity. A business with clean data infrastructure and measurable AI-enabled workflows is a different asset to one that has bought a few tools and called it transformation. If exit is on your horizon, that distinction is already being made in due diligence conversations.

These are board-level questions about competitive positioning and business model viability. 

In most recruitment businesses, nobody is asking them.

Meet your new competition: Mercor

The competitive pressure boards tend to underestimate isn't coming from rival agencies investing in better tools. It's coming from outside the industry entirely.

Mercor is an AI-enabled talent marketplace founded in 2023. By October 2025 it was valued at $10 billion and backed by high-profile AI evangelists including Peter Thiel. Mercor isn't selling software to recruitment businesses. Instead, it's competing directly with them, delivering faster and cheaper with better data infrastructure than most traditional agencies will build in the next decade.

This is what disruption from the outside looks like. The standard board response may be that recruitment is a people business, but that is precisely the kind of thinking that leaves businesses exposed. 

What may have once been true is now a liability. 

What Hays just told the market

The more instructive example closer to home is Hays. In February 2026, one of the largest recruitment businesses in the world replaced its CEO with its Chief Digital and Technology Officer as interim leader. Simultaneously, it reported a 9% decline in net fees and cut its dividend by 84%. 

A business under serious financial pressure chose to put its most digitally capable executive in charge. That's a board making a strategic bet about what kind of leadership the business needs to survive.

And if that's happening at Hays, every recruitment board should be asking one simple question: what are we doing?

The business model is under pressure

So many agencies are automating existing processes. But the ones who are boxing clever are questioning whether those processes still represent what clients want to pay for. The largest global agencies are already moving toward more modular service offerings, advisory relationships, and RPO models where value is demonstrably in judgment and outcomes. Businesses born out of recruitment, like Org and Caraff, have repositioned entirely around complex human capital challenges, where recruitment is an outcome of consulting work rather than the product itself.

That shift didn't happen because those businesses were early AI adopters. It happened because their boards asked the right questions early enough to act on the answers.

Ask the big questions now

The biggest gap most recruitment boards need to close is AI literacy -  not understanding how large language models work, but understanding enough about AI's direction of travel to ask intelligent questions, challenge proposals, and hold leadership accountable.

That means asking whether AI investment is tied to a specific business outcome or just efficiency in the abstract. It means asking what your data infrastructure actually looks like, because AI performs in direct proportion to data quality. It means asking who is accountable for AI strategy and whether that person has the authority to drive the structural changes genuine adoption requires.

And it means asking the uncomfortable question about your own board composition. Does anyone around the table have the background to assess whether your AI strategy is credible? 

If not, that's a gap. And in a market moving this quickly, that gap has a cost. 

We help recruitment leaders to build the AI literacy and strategic frameworks to ask the right questions and make informed decisions. Get in touch to start the conversation.