Every January is the same for recruiters as they are bombarded on social media with messages of “New Year, New Start” in the hope that another agency can entice a disgruntled recruiter to join them. It may be that the time at home relaxing has given the recruiter a chance to reflect on the previous year’s billing achievements and ponder over where the remainder of the profit they generated went. They then come back to the office feeling deflated that they have to go through the whole rigmarole again for another year to line the directors pockets.
Recruiters will have 3 choices: 1) put up with it for another year, 2) go to another agency (but risk having the same feeling in 3-6 months’ time) or 3) do something about it and start their own recruitment business. Most will consider all 3 options and settle for options 1 and 2. For the recruiters who consider option 3, starting their own agency, it has never been a better time to do it.
- The UK and International Recruitment Market is still growing
With the Confederation of British Industry (CBI) suggesting 41% of companies expecting their workforces to grow in 2017 and the UK employment rate remaining high, these can only be good indicators that the need for recruitment agencies is vital. Brexit may also open up opportunities with other international markets that have previously been untapped by UK recruiters.
- Clients are willing to work with smaller agencies rather than larger agencies
During 2016, a large number of the SME and new start up agencies managed by TBOS were making placements with large size companies and in some cases, getting onto PSL arrangements normally reserved for larger agencies. Clients feel that smaller, niche agencies can provide a personal service with better quality candidates through building relationships with recruiters.
- Funding for recruitment agencies is easily available and cheaper due to low interest rates
Invoice finance companies love to provide funding for contract recruitment agencies as every invoice has a timesheet attached, and is therefore almost guaranteed to be paid. With the reduction in the Bank of England Base Rate dropping in 2016 to 0.25%, the cost of borrowing these funds is even cheaper at present. Invoice finance companies are also willing to provide competitive funding to new start up agencies, as long as they have potential contract business and can provide 12 months of projections.
- A new start agency can be set up within 24 hours and begin trading in 7-10 days
Setting up a new agency is very quick and simple. A company can be registered at Companies House within 12-24 hours, HMRC registrations can be done online once the company is formed and business bank accounts can be set up with 48 hours (although we would allow 7 days). Once the company is formed, you need to sort out insurance, contracts and secure your domain name and telephone number – you are then ready to start recruiting straight away.
TBOS has a wealth of experience in helping recruiters take their first steps into starting their own recruitment agency. Our team has helped set up over 100 new permanent and contract recruitment agencies over the past 8 years by providing support, advice and formation services to new business owners. TBOS has then helped provide comprehensive back office and accounting services to ensure that the new agencies have the best start. This means the recruiter can concentrate on making those all-important placements, while TBOS looks after all of the administration and back office functions on a daily basis.