Starting a recruitment agency
Your guide to starting a recruitment agency
If you are considering starting your own agency, this article will guide you through the key factors to consider before taking the plunge.
If you are considering starting your own agency, this article will guide you through the key factors to consider before taking the plunge.
If you are currently employed in the recruitment field, it's crucial to check for any contractual obligations that might prevent you from working with your existing employer's clients. Check your employment contract to know what you can and can't do.
When starting a recruitment business, identify your motivations: be your own boss, have flexible hours, provide great service, or fill a market gap. It requires an entrepreneurial mindset, dedication, and often... your evenings and weekends.
It's important to build on your strengths. Deciding on a specific niche within an industry can give your recruitment agency a competitive advantage over larger, more generalised agencies. 99% of start-up agencies have a niche-market focus, often on the back of years of specialist recruitment experience the founder brings with them.
Define your market.
Starting a recruitment agency doesn't necessarily require substantial upfront costs, and it's possible to operate from home initially. However, it's important to have enough capital to sustain your business during the initial lean months.
Consider and plan both your personal and business finances to give you the runway that you'll need.
Recruitment companies typically charge a percentage of the job salary or a regular retainer for larger clients. The fee structure is based on the level and type of the job, whether permanent or contract. It's essential to carefully consider your charges by factoring in other costs.
The recruitment industry is heavily regulated, and it's important to stay updated with the latest legislation and adhere to employment guidelines. The Employment Agency Standards Inspectorate protects the rights of agency workers and ensures fair treatment by agencies and businesses. Familiarise yourself with the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (as amended). Register with the Information Commissioner's Office to comply with data protection requirements.
Before launching your recruitment business, create a comprehensive business plan and ensure you have enough working capital to sustain the first six months of trading. Focus your time on seeking clients and candidates rather than getting distracted by non-essential tasks like website design or bookkeeping. Consider hiring specialist help for accounting, IT, and office administration. Ensure you register your business correctly with HMRC and Companies House, and consider working with an accountant to handle tax compliance and annual accounts.
