The temptation to look abroad for the continued expansion of your recruitment business is very understandable. Many a recruitment firm has established entities overseas in recent years. But it is also vital to acknowledge that not all of these efforts have been successful, and precisely why that has been the case, if you are to pursue your own agency’s international expansion.
There is no doubt that value can be added to your business if you expand overseas for the right reasons, and in the right way. However, there are also good reasons why you may opt not to take your recruitment firm’s activities to other territories.
What are the possibilities for expanding your agency overseas?
You may be motivated to give your recruitment agency a presence in other countries in the form of separate assets that can be sold independently later. Alternatively, you may integrate overseas arms of your business into a larger entity, not wishing to build them for independent disposals.
If you do make all of the right steps with the international expansion of your agency, there’s no question of the wealth of potential benefits.
Plenty of US acquirers, for instance, are interested in following their clients to other countries around the world, which may be in Europe. You may therefore achieve a higher valuation for your recruitment business if it is a UK firm that is active across the continent, instead of being solely represented in Britain.
However, with the UK being widely regarded as the world’s most mature and saturated recruitment market, you may also wish to expand your recruitment agency to other markets due to the higher margins they may enable you to obtain. Naturally, this all depends on the specifics of the market to which you wish to expand, including the level of competition.
Don’t forget that it may also be easier to attract and retain staff for your recruitment agency if you can give them the opportunity of international postings to develop their career. The better the staff you can lure, the better the performance your whole agency may deliver, and the greater the value your agency may be able to reach.
Is international expansion the right path for your agency?
Getting involved in overseas markets isn’t always the best strategy for a recruitment firm. You may simply lack the know-how to expand internationally with a good chance of success, or there may not be enough management time to take on such an endeavour. Insufficient capital to invest can also be a major barrier to any big overseas plans.
Furthermore, even if you do go ahead with expanding internationally, you should carefully research a range of factors in devising an approach for doing so, including other agencies’ experiences. It’s a good idea to establish a strong client base in the UK first before opening an overseas office, combining locals with trusted existing employees of yours at any new premises.
One thing that you are advised not to do, is to simply wade into a new market because of other agencies’ past successes there. You may get your timing wrong due to that market having already quickly become saturated and competitive, so you may have already missed your opportunity to capitalise on the crest of the wave of a growing market.
All in all, establishing branches of your recruitment agency overseas can definitely be a way of adding value. However, you should first carefully balance the likely risks and rewards and contemplate whether it really is a worthwhile path, or you would be better off concentrating on the continued development of your domestic business.
It couldn’t be more straightforward to talk to us about our full range of back office management services that can greatly take the strain off your business when you are expanding to other territories. Simply call or send an email to the TBOS office now.