5 ‘Must Not Dos’ When Running A New Recruitment Agency

It’s frustrating to be told of what to do in the running of your recruitment company, after the moment when you should have done it. The fact is that we can’t always be expected to know a certain action will result in disaster. However, there are certain mistakes that recruitment agency owners have frequently made in the past, and of which you should be aware.

With that in mind, here are five things we would urge you not to do when you are operating a recruitment firm.

Straying outside the law

It can be so easy to find yourself inadvertently breaking the law as the owner of a recruitment agency. After all, getting to grips with the finer points of HMRC regulations, IR35, National Insurance contributions, auto-enrolment and the national minimum wage was probably someone else’s responsibility in your last agency. Now, it is your duty to understand them.

Nor is being ignorant of or failing to understand your legal obligations acceptable if you do come under investigation by the taxman.

Overburdening yourself

With statistics indicating that two-thirds of male business owners suffer from stress in any one year – and their female counterparts not being far behind – it’s important to recognise just how overwhelming the task of running your own recruitment agency can be.

Being your own boss is far from the easy option, which is why anything you can do to lighten your load – without putting your business at risk – should be considered. Our own Complete and Freedom plans allow you to outsource many back-office functions so that you can focus on your firm’s core operations.

Failing to keep an eye on the finances

The importance of the right funding for start-up recruitment agencies cannot be doubted, which is why – here at TBOS – we do so much to look after the contracts, invoicing, payments and funding situations of our own client agencies.

It’s easy to feel that if your agency is continually winning new business and sending new invoices to clients, it must be in decent financial shape. However, there must be actual money in the till for this to be the case. You need to ensure, in particular, that your clients are paying their invoices in a timely fashion so that your agency doesn’t come under unnecessary financial strain.

Simply doing what every other agency does

Given the tens of thousands of recruitment firms that are already active in the UK, you can expect stiff competition for your own start-up company. This, in turn, heightens the importance of your agency standing out from the competition.

Even if you presume your agency to differ little from its obvious rivals, it probably only requires a little scrutiny to realise that your company actually is distinctive in some way. Nonetheless, it’s a good reason to be selective about the industries and geographical areas that your firm serves.

Depending on a small number of ‘big’ clients

Yes, securing a deal with an especially well-known client soon after commencing your journey as a recruitment agency owner could be a great morale boost and lead to your new company regularly outgunning your previous agency in pitches. However, it could also go badly wrong.

If the growth and stability of your agency become overly attached to a small number of agreements with big clients, you could be at risk if any of these clients cease to work with you. That’s why it’s not worth becoming too obsessed with winning such accounts. Instead, look to ensure a steady stream of smaller, ad hoc deals that will also serve as a more consistent and predictable source of funding.


For functions ranging from company formation, timesheet management and credit control to all of the other arrangements needed to ensure a good flow of funding for start-up recruitment agencies, TBOS is a valued partner of many leading recruitment firms today. Get in touch with our office today about how we could support your own company’s aims.


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