Five roundtable sessions. Sixty-plus executives. One clear picture: the IT and engineering staffing market is navigating a critical inflection point — where margin discipline, AI integration, and channel economics are separating firms that are built for what’s next from those still catching up. Here’s what leaders across the industry are saying right now.
Top 5 Takeaways
The following insights represent the strongest, most consistently-reported signals across all five executive roundtable discussions.
Profitability Is Recovering — But Growth Is Fragile and Uneven
Q1 2026 was broadly positive, while some firms showed top line improvement, the predominant theme was improving margins driven by expense discipline. However, leaders reported softening in April, and early Q2 KPIs like new job orders are signaling caution. Firms winning right now are focused on bottom-line efficiency. This signals a market in recovery mode, not expansion mode, and leaders should plan for continued unevenness in Q2.
AI Adoption Is Real, But Integration — Not Access — Is the Actual Differentiator
Most firms have some AI in their stack, but the gap between point solutions and integrated workflows is widening the performance spread. Leaders who have mapped their full recruiting process and embedded AI at each stage (sourcing, screening, outreach, scheduling) are seeing 30–35% reductions in recruiter time per hire and 3x productivity multipliers from virtual recruiting tools. Firms still deploying AI as isolated plug-ins are not seeing meaningful results. The message across roundtables was clear: workflow design matters more than tool selection.
Candidate Quality and Fraud Are Becoming Operational and Client-Facing Risks
Across multiple roundtables, leaders reported that only ~40% of sourced candidates pass technical verification and fraud screening — creating massive inefficiency for recruiters and eroding client confidence. The risks associated with candidate mispresentation is rising, particularly in offshore-sourced pipelines. AI coaching during interviews is also distorting candidate assessment. Firms that develop and communicate a credible, multi-layer candidate verification approach will have a real differentiator in client conversations.
MSP/VMS Economics Are Deteriorating — And Firms Are Starting to Walk
New “platform tax” API fees from major VMS providers — stacking on top of existing MSP fees — are making many mid-tier VMS accounts economically unviable. Multiple firms reported exiting or declining to expand MSP relationships. Combined fees now approach 3%+ of bill rate, plus annual API access costs of $7,000–$8,000 per provider. This is reshaping channel strategy in real time. Firms that build direct client relationships and proprietary tools will be better positioned as MSP dependency becomes a margin liability.
Dissatisfaction with Legacy Technology Has Hit a Tipping Point
Dissatisfaction is crystallizing around three issues: outdated technology architecture, that has weak native AI integration, and rising costs. Many leaders are exploring AI-first alternatives.
