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When a recruiter decides to start their own recruitment agency it is important that they evaluate their own skills as a future recruitment director.  Even the most profitable recruiters may not have the required traits to be a successful director as although they can certainly recruit, they may not be able to manage company funds, staff or have the ability to grow a company.  Some non-recruitment roles may also have these traits and want to start their own agency, however in our experience without any previous history of being a recruiter, it can mean that the directors spend a large portion of their time learning how to be a recruiter rather than growing their business.

Below are a number of traits that a new recruitment agency director should have in order to build a successful agency:-

Recruiters Who Have Experience of The Full Recruitment Process

Recruitment Directors need to ensure that they have worked in a 360-recruitment environment, having been successful in finding clients and candidates and making numerous placements. Recruiters who only have experience of sourcing candidates will struggle to find new clients and this will make it hard in the early stages of the agency.

Recruiters Who Are Billing Three Times Their Ideal Income

Whilst recruiters usually begrudge their existing agency for taking two-thirds of the profit generated, this is a good indicator of how much you need to bill in order to have a successful agency. Often an agency will only be able to distribute around a third of the agency profit to the directors as the remainder is taken in paying for overheads, paying the taxman and keeping some funds in the bank account for security.  Once there are staff within the business who are generating profit, this reliance on the director will reduce.

Recruiters Who Have Built Up Their Own Clients and Sales Income From Scratch

When starting your own agency, you need to be able to onboard your own clients and candidates, and not rely exclusively on the business relationships from your previous agency. This is due to restrictive covenants within your staff contract or within the client and candidate contracts from your previous agency.  If you have already built up a successful recruitment desk previously then doing this for yourself should be a replication of this original process.

Recruiters Who Have Experience of Managing Staff

Whilst managing staff is not a deal breaking trait, it is advisable to have some experience even if it is just having your own resourcer. In order to grow your recruitment agency, you need to understand how to work with and manage your own staff members so that your own agency is not reliant on your billing alone.  Managing staff can take a large amount of investment in time and company funds to get right but the long-term rewards will be worthwhile.

Recruiters Who Understand Contracts and Compliance for Their Industry

When starting your own agency, the contracts and compliance on any new placements will have to be completed by you which means you need to have a full understanding of what is required. Some recruiters will have come from an agency environment where the company had their own internal compliance or administration department, so this kind of knowledge can be hard to find but is necessary as you will often not have this resource in the early days of your agency due to the cost restraints.

TBOS has many years’ experience of helping the next generation of recruitment agency directors to start their own recruitment agency journey.  TBOS provides help and advice to these new recruitment directors to give them the best possible start by ensuring that all they need to worry about is recruiting and allow TBOS to manage their back office and accounting processes.  We help with setting up new companies by offering formation services, bank account and invoice finance set up services, HMRC registrations and introductions to reputable suppliers.  TBOS also provides contract preparation and legal help to agencies who require it to ensure that new placements are arranged correctly and compliantly.

For more information on how TBOS can help you start your own recruitment agency, please contact our office.