If you have been working in the HR sector for a while or have been a recruiter for a long time, you might want to use your expertise and connections to start your own recruitment agency. Like any other business, if you’re going to set up an agency, you need to have a clear idea of every fundamental aspect of a business.
A first step would be to assess your finances to make sure you have the financial means to get the agency up and running. What’s more, you need to think about who your competitors are and what is your niche, so you know where your recruitment agency will position itself. As recruitment agencies act as the middlemen between companies and jobseekers, investing in human capital is highly needed to build an effective recruitment specialist team.
So, if you have decided to start a recruitment agency is the next step in your career, here’s what you need to take into consideration:
Determine your work experience and skills
Before you plan on renting an office space and start the activity of your recruitment agency, it is essential you consider all your work experience to identify your strengths and realise the areas where you might need additional help. For instance, even if you are an expert in the recruitment sector, starting an agency means you also need to have a basic understanding of how a business works so you can plan a strategy and get the ball rolling. You might want to get advice from someone who has solid business acumen to make sure your business plan is viable. So, you could hire a consultant or start the agency with an experienced partner who can focus on the business side. Either way, this will ensure a good running of your recruitment agency, especially if you are not very experienced yet.
Apart from the business side, your experience within the recruitment sector can be beneficial for many reasons. Besides being already highly trained and skilled and having extensive knowledge as a recruiter, you also have many connections in this field. By knowing many people in your profession, you could easily build an effective team of recruiters. Not to mention, if you have been doing this job for a long time, some of your most loyal clients might want to stick with you. The same goes for job seekers. Some candidates might want to change career at some point, or they will recommend you to a friend or relative. So, chances are you won’t start the agency from zero and instead have a small database of clients – companies and candidates alike.
Determine the industry and niche of your focus
For your recruitment agency to be successful, it is highly recommended you make strategic decisions before you launch the business. In terms of the industry and niche focus, it is vital you choose a direction that will bring clients and drive the business further. So, it is essential to focus on an industry that has great potential and high demand. As specific industries can offer more hiring opportunities and matching candidates than others, it is crucial to do a market analysis.
So, for instance, you could focus on the IT industry and other tech-based sectors, given that these areas are in high demand nowadays with so many technological innovations emerging. For this reason, many companies seek to hire specialists in computer programming, web development, software development or data scientists, and many more to digitalise their business practices and stay up to date with the latest technologies. Similarly, many candidates realise this sector offers many job opportunities and are focusing on acquiring relevant skills. Therefore, choosing this as your recruitment agency’s niche could be highly profitable. Essentially, this is your goal from the business perspective. What’s more, if you chose an industry with excellent potential, it will be incredibly rewarding to help job seekers find a great role for a renowned company.
Consider expenses and invest smartly
A highly important aspect when planning to start a recruitment agency is making a list of all the necessary expenses that your business will have. This will help you plan a budget as part of your business plan, so you can get the financial support you might need. There are some ways in which you can save money and not spend too much from the beginning. For instance, there is no point in renting a large office space or hiring too many employees. However, it is crucial to invest in some areas to get the business started and allow room for growth when you can afford to expand it further.
After finding an ideal space to rent and build a small team of recruiters, it is essential to invest in specific tools that facilitate the business’s productivity. For instance, software for the recruitment sector can help an agency keep organised evidence of client invoicing and support effective document management. Besides, as a recruitment agency, it is necessary you create and provide contracts, so it can be beneficial to use tools that allow for a seamless process of producing these vital documents and being able to sign them electronically.
Another essential investment is in your marketing department, especially as you are new on the market and need to reach as many clients and candidates as possible. If you are able to bring a database of clients that you managed to create in time, you can include it in your direct marketing strategy to announce the launch of your recruitment agency. This is a great way to start, and you don’t have to invest a high amount of money in marketing from the beginning.
Do a competitor analysis
An equally important aspect when you plan on starting a recruitment agency, as in any other business, is to evaluate your competition. Doing this will help you identify your competitors’ area of focus and what can be your unique selling point or USP. If you overlook the importance of competitor analysis, you risk opening an agency that doesn’t necessarily bring anything new.
Being new on the market while lacking a competitive advantage can be an unfortunate combination. So, whether you chose a niche in high demand but not many agencies focus on it, or you are incredibly committed to offering the best services with efficient management, you must use any opportunity to create a competitive advantage.