Last year brought plenty of AI hype, but actual adoption in talent acquisition remained tentative. Some organizations ran pilots, most watched from the sidelines, and expectations stayed cautiously low. The technology advanced rapidly, yet widespread implementation lagged far behind the headlines.
Now, heading into 2026, there’s a genuine opportunity to move beyond experimentation. But extracting real value won’t come from simply buying the tools. It requires building entirely new capabilities around continuous workforce transformation and reskilling. The organizations that crack this will pull ahead. Those waiting for AI to deliver results on its own will be left wondering what went wrong. So what actually needs to change for companies to see a return on their AI investments?
My guest this week is Jonathan Kestenbaum, Managing Director at AMS. In our conversation, he shares his 2026 predictions for AI and outlines the transformation TA needs to make.
In the interview, we discuss:
• The complexities of AI implementation
• Is workforce planning the missing link in AI transformation?
• Blockchain and identity
• Hiring manager experience as the new KPI
• The need for more context and the end of the resume
• Innovation is outpacing regulation
• Increasing velocity in internal mobility
• How will the technology develop over the next few years?
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00:00
Matt Alder
Last year was a year of AI experimentation for some employers, while others watch tentatively from the sidelines. Will 2026 be the year when organizations start extracting genuine value from AI, and what will they need to do to make that happen? Keep listening to find out.
00:22
Matt Alder
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01:27
Matt Alder
Hi there, welcome to episode 758 A Recruiting Future with me, Matt Alder. Last year brought plenty of AI hype, but actual adoption in talent acquisition remained tentative. Some organizations ran pilots, most watched from the sidelines and expectations stayed cautiously low. The technology advanced rapidly, yet widespread implementation lagged far behind the headlines. Now heading into 2026, there is a genuine opportunity to move beyond experimentation. But extracting real value isn’t going to come from buying better tools. It actually requires building entirely new capabilities around continuous workforce transformation and reskilling. The organizations that crack this are going to be the ones that pull ahead. Those waiting for AI to deliver results on its own will be left wondering what went wrong. So what actually needs to change for companies to see a return on their AI investments?
02:31
Matt Alder
My guest this week is Jon Kestenbaum, managing director at AMS. In our conversation he shares his 2026 predictions for AI and outlines the transformation TA will need to make.
02:44
Matt Alder
Hi Jonathan and welcome back to the podcast.
02:47
Jonathan Kestenbaum
Hello. Thanks for having me. Excited to be here.
02:49
Matt Alder
Always a pleasure to have you on the show.
02:51
Matt Alder
For people who may not have heard you before, please could you introduce yourself and tell us what you do?
02:56
Jonathan Kestenbaum
I am Jon Kestenbaum, have spent my career in the work tech space. I’m currently MD at ams. I spend my time evaluating the talent acquisition technology market, staying ahead of the trends in the space and helping both AMS and our clients understand how to leverage these tools to gain efficiencies.
03:16
Matt Alder
Fantastic. And I don’t think I know Anyone else in the sector who spends quite as much time looking at technology and technology trends as you do. So which is why I thought it would be great to kind of have you come back on the show and talk about what you’re seeing and what might be happening in the next 12 months. So let’s start with 2025. What’s gone on this year? What were you expecting? What surprised you about what’s happened?
03:37
Jonathan Kestenbaum
So every year I set out trends. So 2025 I talked about, for example, the rise of large action models and the thought was that they would drive cost savings and potentially even personalization. And I would say on that particular trend you definitely saw the rise of AI agents, but I think you were on track. And I say on track, but show me the money. I don’t think that it drove cost savings yet. Part of the reason why it hasn’t driven cost savings yet and we can unpack it further because it kind of dives into some of the neutrons, is I think that companies don’t realize how complex it is to actually implement an AI tool and how to extract efficiencies from it. And there’s a lot of workforce change that has to happen. So we’re just not there yet.
04:21
Jonathan Kestenbaum
But I do believe 2026 and we’ll talk about it, there might be some interesting opportunities. Another was the second Trend really for 2035 was the evolution of programmatic advertising. Essentially this idea that you could use LLMs to assess candidates right when they apply and then programmatically optimized for quality, which was a trigger you couldn’t do before. And I would argue I’ve seen this in action and bingo, like, you know, right on spot. Von launched their CPA plus model which, you know, allows them to move beyond traditional ppc. And so that’s definitely something that, you know, was spot on. Spoke about the shift from software as a service to outcome based pricing. This one, you know, I think was directionally correct. We need to give it a bit more time.
05:06
Jonathan Kestenbaum
The software as a service model, you know, is at risk because we’re moving into this fast, casual era of technology where it’s kind of much easier to build technology than it ever was before. And as a result, like if you’re just a workflow engine and you don’t have any AI, it’s going to be very difficult to maintain a meaningful moat. And then this idea that if you embed AI, you’re going to start to go after services, revenues and switch to outcome based pricing. You, you’re Starting to see it. It’s how buyers want to buy, but we’re not fully there yet.
05:38
Matt Alder
No. Awesome. Yeah, you were sort of pretty spot.
05:41
Matt Alder
On with some of them, but as.
05:42
Matt Alder
You say, still the early stages and, you know, things still emerging. Was there anything that happened that you weren’t expecting?
05:49
Jonathan Kestenbaum
Not really. I mean, I think the market broadly was. Was challenging. And, you know, that always causes, you know, companies to reevaluate how they spend capital on technology. But I don’t think anything really shocked me. Sorry. I do. There is something that shocked me, now that I think about it. The rise of Merkor, like that came out of nowhere and I think is super interesting. Merkor has a few pieces to what makes a successful staffing firm. So they’ve identified a new area, a new job, essentially, which is like data tagging in AI. And anytime I’ve seen staffing companies scale, they focus on a niche area in high demand where there’s a skill shortage.
06:34
Jonathan Kestenbaum
And so, like, you know, historically it might have been F sharp developers for blockchain or technologists or nurses, you know, and essentially they get skill in that category and then they start to focus on, you know, diversifying the business, not just from that job type, but other businesses, because you generally start with like one client, one niche skill set, and then you scale beyond that. And so these guys came out of nowhere identifying this skill, this new job type that’s, you know, as a result of AI and, you know, I think have built, you know, a very impressive business, at the very least, raised a very impressive amount of capital.
07:08
Jonathan Kestenbaum
I think the challenge I have with it personally, and I think they’re raising money as a tech company and they’re really a services business enabled by technology, you know, and as a result, I think it’s going to be challenging for them to catch up to that valuation, especially as the rest of the market identifies with ways to place similar people. But I was not expecting that.
07:27
Matt Alder
And just to give people some context of the scale of this.
07:29
Matt Alder
What was their valuation? Was it a billion dollars?
07:32
Jonathan Kestenbaum
Their valuation, I think, is like $10 billion.
07:34
Matt Alder
$10 billion. There we are. Yeah, so. And as you say, it appeared from absolutely nowhere. Okay, cool. So let’s talk about 2026, because you’ve just made another set of predictions kind of back at the start of December. Let’s talk through them. So the first one was workforce planning is the missing link in a. Tell us about that.
07:56
Jonathan Kestenbaum
Yeah, so I started to kind of hit on this as to why companies have not been able to direct cost Savings from AI. What you’re going to see over the next six months is a whole bunch of headlines about how companies spent X amount of money and saw, you know, no meaningful cost savings as a result. And what I’ve identified, you know, broadly, is in the past, if you wanted to buy a CRM or an ATS or any technology tool for that matter, you’d have to select the right tool, you’d have to optimize, do some, you know, change management around the tool, and then you’d essentially go live and it would be business as usual. And you’d hope that a certain percentage of your people would use the tool and you’d get some kind of efficiency from it.
08:39
Jonathan Kestenbaum
Today, when you buy AI, you have to do that, but you also have to change the workforce that exists around the technology on an ongoing basis, because AI is eating at the tasks that the humans do, and you have to constantly evolve the people around it. And this muscle of transforming on an ongoing basis, transforming as usual. And so companies haven’t built that muscle yet, which is why they’re not extracting the cost savings yet. And additionally, I don’t think the technology exists to facilitate this at scale. And so I believe that we need new workforce planning technology that, you know, this is an opportunity for folks who are building technology to focus on. Nearly every organization is going to need a tool that helps them reskill and move folks around their organization. And ultimately this is how you’re going to extract value from AI.
09:28
Matt Alder
And I can see this being a massive topic as we kind of go through the year because it just seems very crude at the moment. Companies are just sort of cutting heads. They’re not really looking at, as you say, the tasks that AI is taking, how it’s shaping things, the people they actually need, how things need to transform. It just seems to be something that companies, as you say, haven’t got their head round yet. So I can see this being a really big.
09:49
Jonathan Kestenbaum
Because what’s happening now is the individuals that are using technologies, they’re getting some efficiencies, but they’re not passing that onto the company.
09:55
Matt Alder
Yeah, that’s true. Yeah. That’s another sort of key issue, isn’t it? Okay, so the next one, Blockchain’s breakout year, which when I read I was really here. Here we go again. Explain, explain why.
10:08
Jonathan Kestenbaum
Listen, for the last three years I’ve been talking about blockchain, but not in the context of cryptocurrency, really in the context of identity. I Think that is the ultimate solution of blockchain and where it’s going to make the most meaningful impact. If I look around the heads of talent and chros that I speak to, 100% of them have an issue around identity. They all are worried about candidate fraud, they’re all worried about nefarious actors getting into their organizations. As a result, they’re all looking for technology to solve problem. So, you know, in the trend, I say third time’s the charm, right?
10:45
Jonathan Kestenbaum
Ideally we start to see some really interesting solutions to solve, you know, these convincing deep fakes, you know, to allow us to understand who’s cheating on their application process and who is not, to track IP addresses, et cetera, and really identify that this person who actually took, you know, participate in each step of the process is the person that came to work and they’re the person you want to hire.
11:09
Matt Alder
Absolutely, I agree with you actually. And I’ve been saying similar things about blockchain for a while and I guess kind of we hope it’s a bit like QR codes. They kind of appeared, people thought they had no use and then suddenly QR codes are everywhere again. So I think that definitely makes a lot of sense as a use case. Next one measuring hiring manager experience is the new KPI.
11:30
Jonathan Kestenbaum
I live in this world of I don’t live in a scarcity mindset, I live in an abundant mindset. I believe broadly that AI is going to create more opportunity, not take away. I do think that there’ll be some short term pain, but ultimately I think that there’s going to be more opportunity. And I would just kind of ground that in this idea that the scarcity mindset is, oh, now there’s AI, it’s going to replace us. But that kind of means that we’ve been doing recruitment perfectly up till now. And actually I don’t believe we have. I believe we’ve been operating at like 30% capacity and actually like 70% of people are in the wrong jobs. And imagine what we’re going to be able to do if we have more capacity.
12:11
Jonathan Kestenbaum
And as a result, I believe there’s going to be more things that we’re going to be able to do to impact, you know, getting the right people in the right jobs. You know, so if maybe now I don’t have to spend a certain percentage of my time scheduling interviews and going back and forth as an email processor and I could spend more time building relationships with hiring managers and understanding more meaningfully, you know, what they’re looking for and getting to know your organization better so that I could sell the organization to the candidate quicker. You know, ultimately I think we’re going to start to measure new things. Is it going to be hiring manager experience? You know, I don’t know. There’s going to be definitely new metrics.
12:48
Jonathan Kestenbaum
Hiring manager experience, to me is the closest thing in the funnel that we’re not really measuring today because we’re too garrison and too worried about, you know, what it actually is going to be. To me, you know, I think it’s going to be an important one.
13:02
Matt Alder
In our conversation back in March, one of the things that you said was the changes in recruiting aren’t just about automation, it’s about the whole process needs a complete redesign, which is obviously what you’re echoing here. Have you seen any evidence of that happening yet?
13:17
Jonathan Kestenbaum
Definitely. The roles in the process, you know, folks are starting to rethink what is the role of a source or moving forward, you know, what is the role of an admin moving forward? You know, people are definitely starting to think that. But then I’ve also heard some really provocative ideas. Like the other day I heard somebody pitch me and actually shared it on LinkedIn. This idea that, you know, the resume was built as a tool for recruiters who are busy and have limited time to sort through people’s information quickly. But actually LLMs can sort through unlimited information even quicker than a recruiter could sort to a resume. Why should we limit your application process to a resume? What if we just let you submit whatever you want?
14:01
Jonathan Kestenbaum
Like, I’m not suggesting that ultimately at some point in the process, your information doesn’t turn into some kind of bulleted resume style document that summarizes everything, but maybe the more context it gets, the more meaningful it can match you against opportunities. Like maybe we should just let candidates give us all kinds of stuff.
14:21
Matt Alder
No, that’s an. It’s an. That’s an interesting idea. It makes perfect sense. And I think that illustrates sometimes how difficult it is for people to rethink the recruiting process because it’s questioning the very assumptions that kind of hang it together that have been there so long. People don’t even really remember what they are. So, yeah, no, it’s a really, it’s a really interesting one and hopefully something that we’ll see lots of in the coming. In the coming year, I suppose, kind of, you know, related to that, the next one of your sort of trends that you’ve identified Was AI Ethics. Innovation is outpacing regulation.
14:54
Jonathan Kestenbaum
Look, we have a new political party in power in the U.S. america has broadly decided it would rather win the AI race than police it. And America is essentially loosening the guardrails around AI. I think that what ultimately is happening is companies that operate on a global basis are obviously taking a more thoughtful approach to how they look at AI and regulate against it. And I think that broadly will be a differentiator because despite the fact that the US Is focusing on innovation, you still can’t violate federal civil rights laws. In the US and broadly, a lot of AI legislation was focused on just making sure that you comply with federal civil rights laws.
15:36
Jonathan Kestenbaum
So there’s still a whole bunch of work that organizations have to use and do to make sure that you’re not, you know, there’s no bias in the process and you’re not unintentionally violating laws. But, but I do believe, you know, it’s less of the focus than it was the year before.
15:57
Matt Alder
Yeah, that’s an interesting, as an interesting point. And I think the, you know, the point there that we’ve, what we’ve always been saying about, you know, the existing laws do apply to. Do apply to AI in terms of, you know, relevant legislation and stuff.
16:09
Jonathan Kestenbaum
Yeah. One thing that I think is really interesting though is people about, you know, around AI ethics, like, the bias issue, as the issue, like, does this technology create bias in the process? Like, and what they’re missing is that’s only 10% of the problem. And then frankly, it’s like a math equation to be able to solve the 90% of the problem is how you use these tools in the process. And it’s like if I was to go use a social sourcing tool and create a short list of candidates that I map based on like a diverse, you know, filter, and then I rely on that information to make a hire. I violated federal civil rights laws. That’s not the technology screwing up. That’s the way I use the technology in the process.
16:52
Jonathan Kestenbaum
And so the problem is that just like it’s hard to extract value out of AI so that you can get cost savings or at least reposition the new capability you have in those people to do more meaningful things in the process. Like, the same thing exists here where you have this challenge that’s really hard to solve because you have to now, on an ongoing basis, train the folks that are touching the recruitment process in how to use these tools that are evolving and make sure that they’re using them compliantly. And no real company today has built meaningful training to solve that problem. And so they’re just a gap.
17:31
Matt Alder
Yeah, no, I do completely agree. Your final one, hiring is about to double, not disappear. And I think you’ve sort of touched on this one already. But tell us what you mean by that.
17:41
Jonathan Kestenbaum
Yeah, well, again, I, I do believe in, like I said, this abundant mindset. But I think even if you look at the world in a way where you say, okay, companies are scared. They don’t know the impact of AI, Their first intuition is going to be to lay people off so they can extract value, even though that’s not necessarily the best thing to do. And actually repositioning people to solve more meaningful problems is better. The assumption would be, in my opinion, okay, let’s look at companies as if they’re not going to hire any new people next year.
18:12
Jonathan Kestenbaum
Well, if that’s the case, and we know in order for them to extract value from AI, they need to readjust the skills that sit around these technologies, then you have to imagine a world where maybe your skills used to be valuable for four years, but they’re now only valuable for two years. And as a result that they’re now only valuable for two years, the amount of mobility is going to change significantly. And so, you know, as I think what you’re going to see is you’re going to see twice as much movement and recruitment is going to be the one responsible for filling those gaps, finding the people at the right skills that sit around, you know, the new technology. And so ultimately velocity is going to increase, which will create more need for recruiters.
18:57
Matt Alder
Yeah, that again, makes perfect sense. And a final question to you about the technology, AI technology itself. How can we expect that to develop in the sort of coming months and over the next, you know, over the next year?
19:13
Jonathan Kestenbaum
I think what you see today is the worst it’s going to be. It keeps getting better and better. I think you’re going to continue to see that. The reality, though, is companies have not even started to extract value from the capability that exists today. So, you know, despite the fact that we might see some, and I have seen some unbelievable voice agents, I think ultimately, you know, it’s going to take a while before we start to leverage some of the newest capability.
19:44
Matt Alder
Yeah, absolutely. Jon, thank you very much for talking to me.
19:48
Matt Alder
My thanks to Jon. You can follow this podcast on Apple Podcasts on Spotify or wherever you listen to your podcasts. You can search all the past episodes at recruitingfuture.com on that site. You can also subscribe to our weekly newsletter, Recruiting Future Feast, and get the inside track on everything that’s coming up on the show. Thanks very much for listening. I’ll be back next time and I hope you’ll join me.
