It doesn’t matter the kind of business you’re planning to begin with. For every single business plan that you jot down, you should pull yourself together to prepare yourself for every demanding situation. Every entrepreneur must do primary research when it comes to starting a recruitment agency. Recruitment agencies don’t simply narrow down applicants and speak to them for their clients. They also aim to offer better career choices, interview training, and one-on-one candidate feedback sessions too.
This win-win spirit is what motivates a recruiter to do their work each day. Before investing in an Applicant Tracking System (ATS), video recruiting software (now that remote work is the new norm), or a CRM (Candidate/Client Management Software) for that matter, you need to pinpoint specific business development strategies that your agency must follow.
If you’re beginning out as a recruiter who wants to try the entrepreneurial space or you want to start a recruitment agency or if you’re simply an entrepreneur with no prior knowledge about how recruitment agencies work, we’ve got you covered in this article.
Decoding A Recruitment Agency
Recruitment agencies attend to a client or a company’s particular employment needs. Employers want qualified candidates to fill their open positions; however, seldom do they have the time to head and discover these people themselves. Here comes the role of a recruitment business. They use recruitment agencies to do that for them.
In the UK alone, the trend of using a recruitment agency for primary employment needs has been on the rise for ages, and in all, the entire staffing and recruitment business accounts for a market size of 120 billion dollars in the US alone!
It’s said that candidates discover a minimum of one of their first three jobs in their related industry via a recruitment agency.
The Cost & Funding Required To Start A Recruitment Agency
Human Resource Cost
In the beginning, there’s only going to be one or two people, either it will be you alone or a partner at least, and the primary aim is to keep the staffing costs to a minimum. Will you need an office space this early? Probably not. With remote working on the rise since the Covid-19 pandemic, there’s no need to invest in this or unnecessarily hire people when you and your partner alone can get the job done quickly. Start A Recruitment Agency may create a little hurdle for you, if you do have not a little experience in the recruitment business, to avoid such an issue hire someone who can help you in this regard.
Tech Resources Cost
Then another question is what device will you want to get started on? Nothing that you probably don’t already possess; your cell phone will allow you to make and take the calls you wish. Your computer or laptop will allow you to do quite a lot of everything else and construct your website, which is the most critical part. Creating your website need not be complex or costly. There is an abundance of alternatives present to help you build one without any considerable expense. In the initial stages, you can develop your website, and with beginner-friendly sites such as WordPress, Ghost, and Squarespace, half of your work is already done.
You may additionally need to invest in a printer, scanner, or Microsoft software program in case you don’t already have them. Your business plan should also allocate a part of your finances for extras like— getting business cards and brand logos designed.
Marketing Expenses & Partnerships
Here’s the most crucial part of any recruitment business. You’ll want to get your job vacancies listed on job sites. Do a thorough study on which listings and where you would like to promote them. Apart from creating a substantial social media presence, you would also have to focus on creating a top recruitment brand. Standing in 2021, connecting with Gen Z is of utmost importance. A stable presence on social media asks not much. It would be best to run meaningful ads, and keep connecting, engaging, and interacting with your audience.
First, sign up for a free trial of a suitable Applicant Tracking System and CRM Software that shall assist you in managing your candidates in one place, saving you loads of time, providing candidate feedback, scheduling interviews, hotlisting your favorite ones, and so on. Only after you’re satisfied using a free trial or are convinced of your needs after a demo, invest in an ATS with in-built CRM software in it.
Back Office Setup
Your back office is a critical aspect of running your recruitment business. Embracing a digitally run and remote operation will make your business less complicated. And it will also help business operations run smoother.
With the above stable costing plan, you already know what you want and what you don’t. Budgeting is highly crucial for setting up a business. Therefore it’s significant to revise your business plan intricately.
6 Steps To Starting Your Own Recruitment Agency
Decide the Business Model of Your Recruitment Agency
To begin with, you want to decide which sort of recruitment agency you are. You might be an IT-centered company or a retail business-orientated staffing firm. Just look at the community you’ve got and the understanding you excel at and pick out a marketplace to offer your service. Also, remember which applicants you have the most compelling connections with. Are they sparkling graduates, or are they, seniors? Asking yourself these questions will assist you with more significant roles that your business might need.
Network Growth is a Success Key
Despite the guarantees of LinkedIn, connecting with humans online isn’t always in reality what networking is all about. Conduct conferences in coffee shops, go to your clients, attend business conferences, and webinars and get out and speak to individuals face to face. The recruitment strategy is all about networking. But there is a load of emerging entrepreneurs, it appears as little more than management and data entry. Forget the workplace and get out and meet as many humans as you probably can. This is the secret to landing great clients.
Compliance with Legal Issues
Most businesses rely on legal professionals and recommend lawyers to take care of any legal affairs. Yet, as the Founder of your company, you need to spend time doing research on applicable legal guidelines and rules to set up your recruitment business. Make sure you know about GDPR (General Data Protection Regulation), which is a series of laws mounted through the European Parliament and Council of the European Union in April 2016. Officially initiated on 25 May 2018, GDPR changed the Data Protection Directive as the main regulation on records safety withinside the European Economic Area (EEA) and European Union. GDPR is essential when it comes to setting up your recruitment agency.
Decide Geo Location / Global Agency
There are many different forms of recruiting organizations and resource allocation in this regard. Some are simply regional, say in a single country or a cluster of states, and the rest are worldwide. The physical space of your recruiting workplace probably could be in one specific location. However, you can place candidates with your clients all over the world.
Human Resource Management for the Agency
Hiring employees, apart from professional and qualified recruiters, is an optional step. There are many different forms of employees that you could bring on board. They include the following:
i) Administration workforce
iii) Marketing Workforce
iv) Other junior recruiters
Different recruitment entrepreneurs choose discrete avenues with their staff, relying upon their business version and the area of interest wherein they work. Some owners are “solo operators” and handle their own resource allocation. This is why you’ll find them essentially do the whole thing by themselves. Start small as a one-man or a one-woman operation. After which develop your business to a level where you can manage to recruit a complete workforce.
Time Zone Management in Case of Globalization
Settling into a new work routine is crucial when you’re in the process of setting up a business. After all, no matter if you work at a countrywide desk, you would still need to consider different time zones. And in case you work at an international desk, then be prepared to make and take calls in the wee hours at night. Well, that’s approximately just half of the issues you might face or resolve.
In Final Words
No business is an easy one as it takes a lot of constant resource allocation. It involves a lot of hard work and patience in planning every aspect of your strategy. Especially if it interests you to inspect candidates and make sure that your decision favors your clients. Along with networking with individuals at par or better than you, it also involves gaining practical knowledge about the marketplace and the characteristics you want to find in potential job applicants. The most fundamental aspect of starting a new business in the name of a recruitment agency is to be patient and maintain a list of business goals. Set the target in the next few months to come.
How To Starting Your Own Recruitment Agency
Decide the Business Model of Your Recruitment Agency
Network Growth is a Success Key in Recruitment Business
Consider Legal Issues
Decide Location Boundaries
Human Resource Arrangement and Management
Time Zone Management in Case Of Global Agency
Invest in Technology
How much does a recruitment agency make?
The cost of a recruitment agency to an employer will really depend on the role being filled. Standard agency costs tend to range between 10% and 15% of a candidate’s first salary and it depends on the region, but this can go as high as 100% for hard-to-fill positions and where the monthly salary is applicable.
Is it hard to start a recruitment agency?
Starting a recruitment agency from scratch is challenging especially if you have no experience. Most successful recruitment agencies are started either by recruitment professionals or someone with lots of experience in the industrial hiring process along with good contacts.
Based out of Bloomington, Indiana, Eli Franklin completed her MBA from Kelley School of Business and has since then worked as a content specialist and marketing executive for Recruit CRM. She is regularly creating specialized content for recruiters and helping Recruit CRM develop a strong marketing game.
If you agree or disagree with the above-mentioned steps please let us know your thoughts in the comment below