6 REASONS NON-RECRUITERS SHOULD NOT START A RECRUITMENT AGENCY

Ready to start a recruitment agency?  FAQ’s

At least two to three times a week, TBOS receives a call from someone looking to start their own new recruitment agency. Needless to say, these eager individuals have zero recruitment experience at all.

RECRUITMENT IS NOT AS SIMPLE AS YOU THINK

Over the years we have heard various reasons why individuals would like to start a recruitment agency, some wake up that morning and decide that not only do they want to set up a new business, but to also go into an industry that they have never worked in. Unfortunately, TBOS has to sometimes knock back their dreams with a reality check that we cannot teach the recruitment process as part of our service and recommend that they get some experience in the industry before they consider this drastic career move.

WHY THE SUDDEN CAREER CHANGE?

There are a mixed bunch of people who decide to jump into recruitment. Some are disgruntled contractors who have previously had a bad experience with a recruitment agency, either by overcharging their clients or by underpaying them personally.

Others have a ‘friend’ they know in the recruitment industry who have been successful and noted ‘they make loads of money by sitting on the phone all day’ encouraging them to follow suit. And lastly some will be employees who have helped find staff for their existing employer and believe this qualifies them to be fully fledged recruitment consultant.

CONSIDER THESE SIX REASONS BEFORE STARTING YOUR OWN RECRUITMENT COMPANY

1. RECRUITMENT IS NOT ‘THAT’ EASY

If recruitment was really as easy as non-recruiters believed then no one would be unemployed and recruitment agencies would be the number one employer in the UK. Recruitment is a ‘hit and miss’ profession where making a placement is relying on numerous factors such as clients, candidates and the ability to match them together successfully. Finding new placements, clients and candidates is a daily grind of numerous phone calls, emails and trawling through CVs all with a chance of disappointment and knock backs.

2HIRING INTERNAL STAFF FOR YOUR CURRENT PROFESSION DOES NOT MAKE YOU A RECRUITER

When a non-recruiter finds a new staff member for their current employer simply by placing a job advert, reviewing numerous CV’s and then conducting an interview – does not qualify them as a recruitment consultant. There is a true art to finding and building a relationship with a client and understanding their company culture. You then need to understand the full requirements of their placement before embarking on your search for the perfect candidate for the post. Note that this is just the initial stages of the recruitment process, you will need to be subscribed and listed on all the correct job boards and channels to facilitate your candidate search. Not organising this process could see you spending hours trawling through hundreds of CVs before you eventually put forward a candidate for your client. Then it’s the interview process – if you have done your job correctly your client should be a good fit for the client, if not you will have to start the whole process again which is timely and frustrating. And if by luck you have put forward the correct candidate, you could end up clueless about the billing administration entailed for billing your client.

3. STARTING A NEW BUSINESS IS HARD ENOUGH

Any person who has started their own business will tell you it is not an easy thing to do but to also add the fact that you are providing a service you have no experience in will make this process twice as hard (if not impossible). Even experienced recruiters starting their own agency understand it may be 3-6 months before they will make adequate placements to cover their costs so by having to learn this skill at the same time as running the business will extend this even further.

4. CLIENTS ARE NOT EASILY CONVINCED

As a recruiter you need clients in order to make frequent placements. Having experience in building client relationships takes time and there is a level of trust that needs to be earned in order to assure them you are the perfect person to handle their hiring needs. Although some non-recruiters are able to get an initial client base on board, this may be because it is within a chosen industry they are comfortable in. When it is time to attract clients in other industries it will be harder to persuade them to use your services as they will not believe you are experience enough to facilitate their needs.

TBOS true story: A nurse who had over 20 years of experience as an agency temp decided to set up a recruitment agency. She successfully registered 40 nurses but when she approached potential clients they were not convinced she was an experienced recruiter. This was due to the fact they saw her as a nurse and felt she could not place the nurses compliantly to their needs. This unfortunately led to her closing the business down.

5. BANKS LIKE YOU TO HAVE SOME EXPERIENCE IN THE INDUSTRY

Most banks when setting up a business bank account will ask for the previous history of the directors of the business. This is to mitigate any risk to the bank should there be any lending required. However, if the director has no experience in the industry this could prompt the bank to ask more in-depth questions about the business plan, estimated quarterly targets and the individuals expect return on investment. This can restrict any potential lending the agency may require in future, such as applying for invoice finance for temporary/contract placements.

6. GETTING IT WRONG CAN BE EXTREMELY COSTLY

As all recruiters know, if you do not follow the contract process correctly when making a placement, the client could end up acquiring the candidate for free. This issue is extremely important for non-recruiters as not having the correct contracts in place can make the likelihood of this happening even greater. Ensuring contracts are understood, correct and properly signed by having the experience of making placements previously ensures that the client will pay their invoice and will not be able to take the candidate for nothing.

READY TO START YOUR OWN RECRUITMENT COMPANY?

Over the years TBOS have helped a number of individuals to set up their own recruitment company. However, we ensure they have fully considered the six elements above before embarking on this journey. It’s incredibly important for us as a back-office solutions company to provide our clients with the knowledge to facilitate their recruitment career. With this being said, our most successful clients have grown their business because they have developed their skills and knowledge by training as a recruiter first-hand.

If you feel you are ready to take the next step of starting your own recruitment agency, please feel free to contact us directly on 03455046333 alternatively you can email [email protected]

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