Start A Recruitment Agency

What's your market?

Your market segment:

There are many ways to segment a market. You can be generalist or specialist, you can have an industry vertical (Insurance: Receptionist to CEO) or a specialization horizontal (“Accountants”).People often have strong opinions about what is the “right way”. The one and only “right way” is to consider as many factors that affect your market in terms of supply and demand, both internal and external, as you can and then make an informed judgement call.

Choose your target market

Surely you can’t be a generalist on your own?

This is often the case, why would a recruiter have credibility in Health & Engineering & Finance? If you have a limited geographic market – a country town for example – then you are probably going to develop a business around the constraints of the local talent pool and the needs of local businesses. There’s no point being a specialist Accounting recruiter when there are only 4 accounting firms in town.

Is a Vertical is the way to go?

Vertical is great if you have a track record in the whole vertical. This means that once you have got a client on board you can sell to all the levels of the business, so in effect the selling activity can ease off and you are more likely to be billing quicker.

‍There are a couple of downsides.

1. You can be overly typecast to your biggest client which may make their competitors reluctant to do business with you.

2. You can get tied to a client (you’re only one girl | guy!) and if another firm comes in over the top you loose your biggest revenue base in one day. OUCH!

3. You are open to death by 1000 cuts (ok 3 or 4 really) from horizontal based businesses. If you have the Insurance client sewn up (Call centre, Accounting, Sales) and a horizontal niche business takes away “Accounting” it can create a void – a capability deficit perception that cuts your “grass roots” revenue base from your “cream”.


‍Does Horizontal mean credibility?

‍True but it also means that you have to sell to more people to create an effective brand. Whilst the vertical might get 5 jobs with one client and it takes them 5 visits to land that client; as a horizontal you have to 25 visits to make 5 placements in 5 clients.

The upside is that you can generally charge a premium for your work and have some insulation from individual client’s hiring cycles.

Its going to be easier to develop your candidate brand as you have more adverts & messages in the same spaces. This could mean that working on a “candidate floating” / “reverse marketing” business development approach will generate revenue quicker.

The obvious pitfalls are that vertical players can pitch for the entire business as a “package” and offer price incentives and perhaps have a delivery capability at every level (including yours). The other downside is sullying candidate perception by misinforming them about job opportunities. The last thing you want in a niche is for candidates to get a perception that you are not advertising real jobs. If you are seeking “registrations of interest” then make sure the candidate is aware of it up front.