Staffing Industry Spotlight: Nitin Sharma

In this installment of Staffing Industry Spotlight (sponsored by Ascen, a leading back-office and employer-of-record for staffing agencies), we welcome Nitin Sharma, the founder of Rectools.io®, and the voice of the UK’s largest recruitment podcast, RecTalk. Nitin shares his expertise on navigating the recruitment tech landscape and avoiding "magpie syndrome", the trap of buying tools without a clear purpose. He explores the two polarized camps of AI: tools that enable recruiters versus those designed to replace them, and the rise of high-profit micro-entities. His insights on outcome-focused audits and the transition from "sales farms" to professional consultancies provide a sharp roadmap for staying competitive in an automated world.

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Francis Larson (Ascen)

Nitin, thank you so much for being on Staffing Industry Spotlight. First thing we'd like to know is who you are and what you do.

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Nitin Sharma

I’m Nitin Sharma. I'm the founder of rectools.io® and the voice of the RecTalk podcast, which is currently the largest recruitment podcast in the UK market.

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Francis Larson (Ascen)

You're widely known in the UK recruitment market, and you've talked to many founders on your podcast, and you've been in the industry for a long time. How did you get into the industry? How did that journey start in the staffing recruitment space?

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Nitin Sharma

I worked in recruitment for one of the big boys, Michael Page. After a couple of years, I realized I could do this myself and had that entrepreneurial itch. Eventually, I went on to set up my own recruitment business. My partner and I ran that for nearly seven years. We grew it, scaled it, and ultimately failed. We made a lot of the right decisions, but also made many mistakes along the way. During that time, I had the concept for rectools.io®—the idea of having a whole-of-market directory that is not affiliated with or attached to anything. As a business owner, I can go on and do research myself. I have a theory that the way consumers purchase products and services is changing; they like to do a lot more research, and marketing is very key in that process.

It started as a little proof-of-concept project. When AI hit the market, we put the world's first AI playground onto the platform for people to use for free to start testing. We put a free job board on there, and now we attract between 7,000 and 8,500 users from around the world each month. When the recruitment business failed, I thought about whether I had something here to turn into a business. I didn't fancy starting another recruitment business again or going through the hiring, firing, and scaling. I wanted to do something a bit more lifestyle-oriented.

I married that up with the podcast. I have over a thousand suppliers on the platform. At that time, none of them really knew me. I needed to get them to know me while also boosting my own personal brand, so I landed on the podcast. Let's get in front of these guys, platform them, and give them eyes on their product in exchange for visibility on my side. As of this recording, we are about to hit 41,000 subscribers on YouTube. Each episode gets up to 3,500 views, and we are a top 15% video podcast on Spotify.

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Francis Larson (Ascen)

That's quite an accomplishment. Congrats, that's very cool. rectools.io® has lots of products and lots of people. Was this born out of your experience as a recruitment company trying to figure out what to use?

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Nitin Sharma

Yes, we changed CRMs three times in the seven years we ran the business. The decisions were driven by the feeling that we were sold something that wasn't quite there. We moved invoice factoring and finance providers twice, back-office suppliers twice, and accountants a couple of times. I would go away, do all the research, and sit down with my business partner, who was a bit of a technophobe with these things. I would leave the decision to him. I found that he would often be drawn in by glamorous marketing teams or sold to by really good salespeople and, effectively, wasn't picking the right product.

I thought, "This can't just be us." Recruiters are an interesting breed. We are very good salespeople and very good recruiters, but what we are not necessarily good at is running a business and making commercial business decisions, certainly in those early years. I was a victim of that. For me, it was a case of taking the lessons I'm learning now and informing people of things they really should know about. We had clients in the nuclear engineering and renewable energy space in the UK. That market is massive in places like the United States, and I wouldn't have even known how to start recruiting out there. Now I see it as my journey to inform business owners that if you're really good at what you do, there are many ways to expand this. Headcount doesn't always equal growth.

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Francis Larson (Ascen)

When it comes to rectools.io® as a concept, do you look at businesses like Gartner, or the newer ones like Vendr or Trustpilot? Those are US-based, but did you look at other horizontal versions of that?

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Nitin Sharma

Interestingly, once we started planning it out, my concept was just a directory. I had no idea how I was going to monetize it or turn it into a business. We just built it to see where it would go. There were a lot of pivots along the way. People can leave reviews for vendors on the site, so we thought about being a review platform like G2 or Capterra, but specifically for the recruitment space.

Then we launched RecPerks, which is effectively a discounts and rewards platform. I would say to the suppliers that I don't want a kickback or a referral scheme. Any discount you were going to give me, just give it to the customer. That's going to be the model. We launched RecPerks and then wondered if we were a discounts and rewards platform. To be honest, the answer is still pretty unclear because it's just me running it. It is a whole-of-market directory. Right now, I'm leveraging the growth and the eyes on product that we get from the podcast and saying, "Actually, why don't you use this as a marketing tool for your business to get your brand out there to a wider, more targeted audience?"

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Francis Larson (Ascen)

That makes sense. What's so interesting about the UK recruitment market is that not only are there so many recruitment agencies, but there are so many suppliers to the recruitment industry. It's very different than the US. In the US, you can count the number of invoice financing firms on one hand. In the UK, there are just so many players. Was that an impetus for you to realize it's just overwhelming?

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Nitin Sharma

That was the issue. The UK government would have me say Britain is a very entrepreneurial nation. Quite often, someone sees someone doing something, says, "I can do this better," and then goes off and does it. We have a lot of startup business support. It's very straightforward now, especially with the tech boom, to turn a concept or idea into a product and bring it to market. Where you used to invest thousands to build an MVP and then validate it, you can almost validate a concept using just social media marketing and a very small MVP at a very low cost. We are starting to infiltrate the US market. A lot of good UK recruiters are moving and expanding there, so I think you will find an increase in the type of entrepreneurship you guys have. The supply chain will explode because it's only inevitable.

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Francis Larson (Ascen)

You have a really good overview of the tool market. What are you seeing right now as the most impactful types of products that recruitment agencies can use?

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Nitin Sharma

There are layers to this. I won't name specific suppliers because I don't think it's fair to others that I don't know about yet or don't have a commercial agreement with. Compared to five or ten years ago, every business—whether it's a one-person business or has a 50-person headcount—has a robust CRM in which they are putting all their data. That wasn't always the case; many recruitment businesses up to seven heads were still using spreadsheets. You have your fundamental basics. They don't necessarily need to have a VoIP system anymore, but what they certainly do need is a CRM that integrates and keeps track of any communication going out of the business. They all have some form of email marketing campaign set up, whether that's automation or using things like Mailchimp. Every recruiter in the UK is on LinkedIn.

Then you have those that step it out a little bit further and invest in their marketing strategy or their website because they understand that it's more than just a window into your business. A good website might not get you any sales, but it will certainly lose you sales or lose interest from clients. For every really good tool out there, a competitor is doing it slightly differently. For example, Interviewer and Odro were the two video platforms, but there are alternatives like Loom that you could use as free versions. A lot of recruitment businesses are now looking at freemium software and outreach tools. That's the toolkit I'm seeing a lot of: video outreach, email outreach, a CRM, and a communication platform that scrapes information from multiple sources to keep data updated and allows for mass outreach without upsetting the rules.

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Francis Larson (Ascen)

What are the tools or products that you've seen agencies use, or think they are going to have an impact, but turn out not be worth it or just a distraction?

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Nitin Sharma

That's happened a lot, certainly in the UK recruitment market. We are victims of "magpie syndrome." You see something out there that is shiny and new, you watch a couple of interesting videos and read some testimonials, and you say, "Okay, I need this." Then you go out and buy automation software, something to cleanse your database, and some AI that's going to rewrite your content. Before you know it, you've bloated yourself with a bunch of tech and software that you aren't using properly.

I truly don't believe there is such a thing as a bad technology product. I think every product that's built has its place. What there are is the wrong customers for them. Unfortunately, in the SaaS market, it's often, "Here is our pricing model and we want everybody to buy it." Really, it should be that this product is for this particular ICP and these are the outcomes it benefits. It should be sold on the outcome. I spend a lot of time with business owners and I'll say, "Forget your current tech stack. What do you want to achieve? What are the outcomes? Let's find tech that will do those things for you," as opposed to saying a certain bit of tech is really good and buying it all only to use a little bit of it.

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Francis Larson (Ascen)

We see this as well. People get a new product, and it sits on the shelf because they don't integrate it properly, or they aren't thinking about what they are really trying to solve for the business. What do you see as the core problem staffing agencies are trying to solve? Is it, "We need to recruit better," or is it, "We need to sell better"?

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Nitin Sharma

They all want the same thing. They all want to attract more candidates, deal with more business, and make more money. Fundamentally, they are chasing a period of time in recruitment from roughly 2010 through 2017—the glory years. Cold business development calls worked. Those days have gone. We are in a different world now. Those that are struggling right now are not looking at the current landscape and redefining their proposition, what they stand for, and what is a realistic achievement. You aren't going to get a $400k-a-year biller who is happy sitting on a $50k salary and a 10% commission scheme and coming into the office three days a week. That used to work, but it doesn't anymore.

In fact, you can turn over $25 million with just three people and a bunch of automation tech and AI. It would be a damn sight more profitable. But that's the part people don't want to talk about: the profit part.

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Francis Larson (Ascen)

That goes into the AI conversation in general. What are you seeing in the product area? What kind of AI tools are getting a lot of traction with recruitment agencies?

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Nitin Sharma

I think there are two camps. There are people building AI tools to help recruiters do their jobs more efficiently or at scale. Then there is AI tech being built, which is to replace the recruiter—to replace that transactional element of recruitment. It can book your interviews for you, get the feedback, and provide rejections. All of a sudden, you don't need the recruiter anymore.

There are those two really polarized camps. I call one the "co-pilot." The other is making the AI the scientist and not the lab assistant.

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Francis Larson (Ascen)

Do you see the market going toward using recruiter agents in a few years, where the recruiter doesn't really exist in their current form?

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Nitin Sharma

From years of experience, I'm of the school of thought that if you are treating your recruitment business as a sales engine, then absolutely AI will replace you. There is not an AI model in the world that's going to call in sick, be sad that his girlfriend left him, or be hungover from the night before. They are going to do a massive amount of outreach—more than any of your staff will ever be able to do. But if that's all you think recruitment is, then your time is pretty much up anyway.

Recruitment isn't a sales business; sales is a transaction and a part of the process. Recruitment is a professional service.

You can use a lot of AI and leverage technology to help you narrow down the selection from 5,000 people to five people. But it will always need that human to go in the middle and handle the little nuances and the conversations. "Francis is this type of person; he's going to get on with this type of person. She's really going to gel with him, but I don't think this person will; I think this person will rub him the wrong way." A human can do all of that and pick up on those nuances. AI can't right now.

The role of a recruiter will absolutely change because the psychological element and people skills—the psychology behind the CV and the interview process—are the bits that will be most important. That's where a good recruiter becomes great, and a transactional recruiter has to go and retrain.

If I'm recruiting truck drivers, I don't need someone on the phone reminding them to submit their timesheets. If there's an issue with payroll, it's usually because of a breakdown in the process somewhere. It's usually a human or process error, which AI can help avoid. My drivers can be answered by an AI agent that can converse with them, take all the emotion out of the conversation, get the facts, and put that into the right person to fix the issue. That's a great use of AI in that transactional recruitment world. Change has always taken a long time to hit the recruitment industry, usually because there are a lot of "fossils" that are in prominent positions of leadership and decision-making, and they prevent that change. I think that the tide is turning. There will be fundamental shifts in how a recruitment business is seen and operated. The good ones will last.

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Francis Larson (Ascen)

Do you think the firms that are going to do well in the next five years are going to be new firms that are "AI-first," or do you think existing firms are going to be able to adapt fast enough?

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Nitin Sharma

That's a really good question. I think the lessons learned and the scars picked up along the way have a big value. I don't think that somebody who has been an IT Project Manager their entire life can come in and say, "I'm going to open a recruitment business now, and I'm just going to use AI," because they lack the experience of the day-to-day grind and the ways to win a client over. If a recruitment business is open enough to accept the fact that they have a problem and are willing to go on the journey of change, I think they are the ones that will be at the forefront of this.

Once the blueprint is written, new entrants into the market will absolutely have their place. But I think the larger, historic players should be incredibly worried. There comes a point when your business is almost too big to pivot quickly. I think what will happen is people in these places will go, "This is sinking; let's get the lifeboats ready. I'll take these five people with me, we know the other side of recruitment, let's go and set up our own micro-entity and really ramp up using tech rather than headcount."

It's sad to say, but there's going to be mass displacement of people. The truth of the matter is that a lot of these big agencies aren't running consultancies; they're running sales farms. It's the rule of the 20% carrying the rest. I don't think big businesses are going to act quickly enough. There is still too much arrogance; they don't see it as a threat. But it's moving so fast. They saw the removal of the fax machine, the introduction of the mobile phone, and the internet. They've been through this enough times to think this is just yet another thing, and they will adapt. We'll see.

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Francis Larson (Ascen)

Final question: if you are talking to recruitment agencies, what are the key things they should think about when they are evaluating new technology? What is the key wisdom you would impart to them?

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Nitin Sharma

Put outcome first. Really be aware of what your business processes are and how you do business. Don't adapt your workflow or the way you operate: what makes you uniquely you to fit this new tech stack you think you need.

The last thing is that we are a people business. We will always be a people business. You need to make sure that the tech stack you're reviewing is something your team will actually use. There is no point in signing a three-year agreement with a SaaS company when half your team just isn't going to use it. That might be a fundamental issue somewhere else, or it might be that the people on the ground really know what they're talking about, and a really good salesperson has sold you the dream. Take that step back and have that level of evaluation: Do I need it? Are my guys going to use it? And am I going to change how I run my business?

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