WHO SHOULD & SHOULDN'T START A RECRUITMENT AGENCY


It’s evident from the 9,000 new start up recruitment agencies this year, that many people inside and outside of the recruitment sector are keen to crack the industry.

Here at TBOS we speak to many unique individuals every day, each with their own reasons for choosing this particular path. Some are seasoned recruiters, others are non-recruiters with a flare for finding staff for their current company and some persons have zero experience but have complete confidence they have what it takes succeed in the business.

Whatever the reasons for starting a new agency there are some disastrous mistakes being made by these ever-passionate entrepreneurs. TBOS discusses the likely ones to succeed in the business and the unfortunate ones who may not.


The ones who are most likely to succeed...


RECRUITERS WHO HAVE STARTED THEIR OWN SUCCESSFUL DATABASE

When starting your own agency, you need to ensure you start from scratch when gathering a client and candidate database. Nabbing clients or candidates from the recruitment company you previously worked for could end you in trouble especially if you are tied into restrictive covenants. Those who create a successful database from their own efforts are more likely to succeed in the business.

TEAM LEADERS WHO HAVE PREVIOUSLY MANAGED A TEAM OF RECRUITERS

One of the hardest parts of growing a recruitment agency can often be managing and motivating staff members to recruit and hit company targets. Those who have previous experience of running a successful team of recruiters will find it easier to grow a new company and develop its recruitment consultants to maximise placements and in turn its profits.

SUCCESSFUL RECRUITMENT MANAGERS WHO HAVE NO SHAREHOLDING

Often one of the most frustrating parts of working for somebody else is the fact that you are doing most of the work but your employer is the one who is reaping the benefits of all the hard graft. It’s unlikely that the employer will give shares to their business mainly because there are expensive tax implications. In this case senior consultants take it upon themselves to start a new agency. These types of agency managers are likely to succeed as they are passionate about building their own business, profits made by them are now lining their own pockets only strengthening their ambition to succeed.


Unfortunately for every person who is likely to succeed, there are some that are likely to fail entirely…


EMPLOYEES WHO HAVE FOUND PEOPLE JOBS AT THEIR WORKPLACE

Someone who either works in a HR department or helps their current company place a job advert and then interviews new candidates, can sometimes believe this is how recruiters work. These types of non-recruiters fail to realise there is much more involved in being a successful recruiter and in turn running a successful recruitment business. Placing adverts and interviewing candidates are simply parts of the recruitment process not the entirety of building clients & candidate databases, back-office operations, invoice finance, compliance issues and more.

CONTRACTORS AND TEMPS WHO HAVE WORKED THROUGH AGENCIES FOR YEARS

Many times contractors and temps believe they are getting a rough ride from recruitment agencies, mostly because they believe the agency are exploiting the hours they work and generating extremely high profits. These people fail to realise the cost of back office finance, the overall cost of recruitment administration and legal costs for compliance issues. These types of non-recruiters believe they can do a better job as they have experienced the ‘placement process’, sadly this is not the case. Without the industry knowledge or full compliance they need, they end up failing early on, with a hefty tax bill if they are not careful.

MEDICAL PROFESSIONALS

Medical professionals are by far the most frequent enquirers of the TBOS start-up service. They believe recruiters are not providing the NHS with quality staff and feel the recruiters do not understand what the NHS requires. From this they take it upon themselves to fix these issues themselves. With this being said, medical professionals are trained to be care givers and are not sales people. They do not hold the ‘recruitment bite’ to fulfil a placement or understand the numbers required to build a successful agency. The medical professionals we have encountered who run their own agency will often work to minimal profit margins to win deals without understanding the cost of the finance to fund contract and temporary placements. Sadly, this will often lead to the company going bust or they suffer long periods of not making any profit.

PEOPLE WHO HAVE NOT WORKED IN A RECRUITMENT AGENCY

The scariest type of person who want to start their own agency are those who have never worked the recruitment industry before.  This is a double-edged sword as not only are they looking to start a new business but they have chosen an industry they have zero experience in.  Many have heard ‘it’s an easy way to make money’, ‘placements are easy to find’ and ‘they have a mate who fell into recruitment and is very successful’, however the reality is not the same as they should of followed our 6 reasons non-recruiters should not start a recruitment agency


ARE YOU A SEASONED RECRUITER, READY TO TAKE THE NEXT STEP? TBOS CAN HELP…

TBOS have helped set up many start-ups over the years by giving help and advice to top billing recruitment consultants and managers.  If you think you are ready to take the next step, give us a call today on 0345 504 6333, alternatively you can email us enquiries@tbos.co.uk


Thinking of starting a new recruitment agency?

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Stewart Roberts

Written by Stewart Roberts

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