The Very First Steps You Should Take When Starting a Recruitment Agency
In the United Kingdom, recruitment is an expanding sector – due partly to a thriving labour market. CRM firm Bullhorn reported that over two-thirds of recruitment agency owners expect an increase in revenues during 2021. However, the number of people who work in the recruitment industry exceeds 100,000, so start-up recruitment agencies face fierce competition. Here are the key steps you should take to increase your chances of success when starting a new recruitment agency:
First Step – Choose Your Specialism
Most recruitment agencies fall into one of four categories, as follows:
1) Multi-Purpose Agencies
These non-specialist agencies are the most prevalent and only search for staff when their clients need particular roles filling. Typically, they match candidates to permanent roles only, ranging from senior to entry-level positions. After candidates are hired, the agency is paid part of their salary or a set fee.
2) Headhunter Agencies
These agencies focus on sourcing senior executives for permanent positions, normally in white-collar companies. Often, they are paid part of a candidate’s salary on an ongoing basis, and/or work for a retainer fee. This recruitment specialism is highly lucrative, although it does take longer to place candidates. Agencies of this nature tend to hire experienced consultants, which increases employment costs for start-up businesses.
3) Manpower Agencies
Manpower agencies specialise in filling temporary roles. Frequently, these are from specific sectors, like construction, logistics, agriculture, or call centres. These agencies screen, interview and train all their temps, who are effectively employees of the agency, then charge customers a fee to ‘hire’ these workers for variable-length assignments.
4) Specialist Agencies
These agencies operate in selected industries, such as IT, hospitality, or teaching, and acquire the knowledge overtime to place accomplished candidates in suitable permanent or temporary roles. High-level applicants usually work with specialist agencies, due to their reputation as industry experts.
Second Step – Evaluate The Competition
An important part of starting a recruitment agency business is assessing your competitors. Use the 'Four Ps' (place, product, price and promotion) and SWOT (strength, weakness, opportunity and threat) analysis, to determine your USP and how you can enhance your strategy.
Third Step – Know Your Numbers
When starting a recruitment agency, UK entrepreneurs often don't factor in expenses like digital tools, office equipment, insurance and staff, etc. You can reduce these costs significantly by hiring a company like TBOS, which provides full back-office solutions for permanent and contract start-up agencies. TBOS offers flexible funding for contract agencies, with no long-term obligations or set-up charges. Furthermore, you are only billed for their services after you make placements, so you start saving money from the outset.
Fourth Step – Legal Awareness
All recruitment agency founders should learn about the laws governing their industry, to protect their candidates and their company from legal problems that could arise. Data protection law and immigration law are two essential areas that recruiters should familiarise themselves with, to ensure they handle candidate applications correctly.
Fifth Step – Establish Company Objectives
Long-term and short-term goal setting is a good way of motivating consultants to grow your business in accordance with your company objectives. For instance, you could try to increase the area you serve over the next six months by providing incentives for clients gained in particular boroughs or post-code areas.
Before starting up a recruitment agency, UK entrepreneurs need to plan carefully. To discover how TBOS can help, please contact us today.
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