Recruitment business owners are getting pitched new tools every single day.
New AI platforms. Automation software. Outreach sequences. Note-takers. Most of it gets bought based on fear of missing out, not because there’s a real problem that needs solving.
My guest today is Nitin Sharma. He’s the founder of Rectools IO, an independent directory of recruitment technology, and the host of Rectalk, the most followed recruitment podcast on YouTube with over 100,000 subscribers. He talks to more rec tech companies than almost anyone in the industry. And he has no financial interest in any of them.
Before all of that, Nitin built a recruitment agency with 15 people and close to £5 million in revenue. Then it failed. That experience, combined with the bird’s-eye view he now has across the entire rec tech landscape, makes him uniquely placed to help you cut through the noise.
In this episode, he shares why most recruitment businesses are buying tech in completely the wrong order, how to work out what you actually need, and the one question to ask before spending a penny on anything new.
Episode Outline and Highlights
- [2:19] Building to close to £5M revenue and the collapse in December 2023
- [6:17] No shareholders agreement, no board meetings, no data analysis — the real reasons it failed
- [9:01] How giving away financial control led to legal battles and fraud cases
- [15:56] Why your business finances almost always mirror your personal finances
- [25:47] How Rectools and Rectalk grew from a side project into the industry’s biggest YouTube channel
- [31:13] What recruitment business owners should actually be doing on LinkedIn right now
- [46:47] Why legacy rec tech is under serious threat
- [48:10] The transactional recruitment work that will be automated first
- [49:06] GPTs in a wrapper — how to spot them before you buy
- [50:53] The one question to ask before buying any new tool
- [53:38] How to audit what you already have before spending anything new
- [59:48] Why a CRM with strong back office functionality is the one non-negotiable
What Failure Taught Him
Nitin built his agency the way a lot of founders do.
Head down. No outside input. No board meetings. No real data on where revenue was coming from.
The conflict with his business partner started as a difference in ambition. Nitin wanted a lifestyle business. His partner wanted growth. But the real issue was something neither of them looked at directly.
“Peel that back a little bit further. What I didn’t realise is his financial circumstances were such that he really wanted and needed to earn a lot more money than we were earning.”
Nitin handed over financial control. Legal battles followed. The business went into insolvency in December 2023.
What he took from that goes wider than his own story. Most business owners run their finances the way they run their personal life.
“If you’ve got a business owner that is constantly happy to take investment or taking loans to get through, paying bills on credit cards, that’s how they live their personal life and that’s why their business life is like that.”
It’s worth asking that question about yourself. And about anyone you go into business with.
The Right Way to Choose Recruitment Tech
Nitin talks to more rec tech companies than almost anyone in the industry. What he sees consistently is agencies buying in the wrong order.
The trigger is almost always FOMO. A competitor is using something. A salesperson runs a good demo. Money gets spent before anyone has asked what problem it’s supposed to solve.
His starting point is always the same question.
What problem are you actually trying to resolve?
Not what is everyone else using. Not what does the salesperson say you need. What specific thing is not working in your business right now?
Before buying anything, he recommends three conversations.
Talk to your staff. Ask them where the friction is in their day. You might hear something like: we hate manually typing up our notes after every call. That points to a note-taker. But before you go and buy one, call your CRM provider first. Ask if they already have one built in. Ask if they can recommend one that integrates cleanly. That one conversation saves a lot of wasted money.
Talk to your clients. Ask what they wish you did more of.
Talk to your candidates. Ask what frustrates them about working with recruitment companies.
“The answer to those questions will reveal what technology you actually need.”
Then look at what you already have and are not using. Nitin has spoken to business owners on Recruiter Flow who had no idea a note-taker was already included. Paying for a full system and using it as a basic database.
“You’re sat on the most incredible bit of kit and using it for the smallest thing.”
Same with Microsoft. Most businesses already have Bookings included in their licence and are still paying separately for a scheduling tool. Nobody selling you something new is going to point that out.
What AI Will Replace and What It Won’t
There is a specific problem in the rec tech market right now.
A wave of GPT-wrapper products is being sold to agencies at real cost. They are not proprietary. They are not deep solutions. And as AI becomes straightforward enough for any business owner to build their own tools, most of them will not survive.
“I’m seeing a lot of people trying to make a quick buck with our industry’s reluctance to move with the times. People are trying to effectively sell you a GPT in a wrapper and sell you that as a solution. Don’t buy into this.”
On AI replacing recruiters, Nitin is clear. It won’t replace recruiters. It will replace transactional work. If your value to a client is posting a vacancy, sifting CVs on first pass and managing the offer, that work is being automated now.
What it won’t touch is the human side. Understanding what a candidate actually wants. Building real client relationships. The judgement behind a placement.
On the tools every recruitment business genuinely needs, Nitin keeps it simple. A CRM with strong back office functionality is the one non-negotiable. Everything else depends on what type of business you are and what problems you have confirmed actually exist.
“You absolutely need a CRM. Everything else really depends on what you are as a business.”
Start there. Have the three conversations. Check what you already own. Then ask whether anything new solves a problem better than what you have already.
That is the whole framework.
