6 REASONS NON-RECRUITERS SHOULD NOT START A RECRUITMENT AGENCY

At least two to three times a week, TBOS receives a call from someone looking to start their own new recruitment agency but they have no experience being a recruitment consultant or working in a recruitment agency. Over the years we have been given various reasons for why they woke up that morning and decided that not only do they want to set up a new business, but 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.

Most non-recruiters are discouraged contractors believing their agency is giving bad service and overcharging the clients and underpaying them. Others have a “friend” they know in the industry who make “loads of money for sitting on the phone all day” and they want to do the same. Some will be employees who have helped find staff for their existing employer and believe this qualifies them to be fully fledged recruitment consultants.

Below are some reasons why we believe non-recruiters should not start a recruitment agency themselves:-

  1. RECRUITMENT IS NOT AS EASY AS IT LOOKSIf 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.
  2. HIRING A FEW INTERNAL STAFF DOES NOT MAKE YOU A RECRUITERWhen a non-recruiter finds a new staff member for their employer by placing a job advert, reviewing CVs and conducting an interview to decide on which employee to hire is not the same process as being a recruitment consultant. Finding and building a relationship with a client, understanding the placement and candidate required, before finding a number of suitable CVs to put forward, manage the interview process and negotiate the remuneration between both parties is a true skill and art and something that cannot be learnt overnight.
  3. STARTING A NEW BUSINESS IS HARD ENOUGHAny 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 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. In our experience even the most talented recruiters do not necessarily make the best business owners.
  4. CLIENTS ARE NOT EASILY CONVINCEDAs a recruiter you need clients in order to make a placement and having experience of building relationships with clients and getting them to understand that you are the best person to fill their placements needs. Even if as a non-recruiter there are relationships with clients this is not necessarily in the recruitment field and they will take much more convincing that the recruitment will be successful. TBOS has had a situation where a nurse who had over 20 years of experience as an agency temp, wanted to set up a recruitment agency and managed to get 40 registered, compliant nurses on-board but the clients were not convinced she was a recruiter as they only saw her as a nurse so she had to close down her new business.
  5. BANKS LIKE YOU TO HAVE SOME EXPERIENCE IN THE INDUSTRYMost banks when setting up a business bank account will ask for the previous history of the directors of the business to mitigate any risk to the bank should there be any lending required. If the director however has no experience in the business they are starting then this may make the bank nervous and require some additional information within the business plan on how they will achieve the sales they are expecting. This can restrict any potential lending and would make it harder should the agency decide to make temporary/contract placements that require invoice finance.
  6. GETTING IT WRONG CAN BE EXTREMELY COSTLYAs all recruiters know, if you do not follow the process correctly when making a placement then the client can have the candidate for free so when you’re a non-recruiter this chance can be 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.

TBOS has helped a number of non-recruiters over the years set up their own agency and we have seen them struggle and adapt into being a recruiter as well as starting and running their own business. The most successful agencies we have helped to set up have been the ones run by experienced recruiters, who have a large knowledge base and client relationships in their industry with a thirst for growing their own business. However we are never sure of an agency’s potential when we pick up the phone for the first time so we give all our prospective clients the same time, help and advice we can to give everyone the same opportunity.

For more information on how TBOS can help and advise you on how to start your own recruitment agency then please give our office a call.

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