Start A Recruitment Agency

Why should youR Agency Exist?

There are no doubt many reasons why you are either looking to start a recruitment agency or already have an agency but a fundamental reason will be the answer to the question “why should your business exist at all?”

Before you rush headlong into starting a Recruitment Agency, stop and ask yourself why your agency should exist?

The answer to this question may well have some subjective meanings to you as the owner but it is probably more relevant to think why it will be important to your customers that your business exists. In doing this, and taking in the fact that there are thousands upon thousands of recruitment businesses already, you should think about the “products” & “services” you offer and why they are going to be of value to your customers.

Broadly speaking in Recruitment there are two main types of business – being Permanent Recruitment and Temporary Staff Placement. Yes there are a lot of different names for these but in some simple terms;

Permanent Recruitment is a fee for service and usually a non-recurring revenue – i.e. the fact that you just placed 5 accountants this month does not mean you are going to place 5 accountants next month.

Temporary Staff Placement is usually where you directly employ a person and on hire them to your client – making a margin on the difference between what you charge the client and what it costs to employ the person. Usually this is more likely to be recurring revenue – ie yes placements come and go but if you had 100 temps out last month you are likely to have 100 temps out this month.

Though these are the broad service categories in the recruitment industry it is worth thinking how you could offer something similar but different. For example, if you looked at the reasons why a client may wish to engage a recruitment agency for permanent recruitment – is there an opportunity to break this service down into component parts and offer them as options? Could you charge based on a fixed fee per annum – irrespective of the specific jobs you recruit for?

Similar for Temporary/Contract Staffing – do you know why a a client wants to use this service? How do you differentiate from your competitors – eg Are you able to demonstrate why Temps from your business are better than Temps from a competitor or will your only differentiation be your charge rate?

As you scratch the surface it is apparent that there are all sorts of ways that you can be different/better than your competitors that are much more than trading on price – working out, and sticking to, the reason for your business’ existence is something that should always be top of mind for you and your team.