Starting a Recruitment Agency

[LondonMatt23]

Hi,

I was hoping I could get some help/advice. I am in the process of setting up a recruitment agency/consultancy. The problem is I have no experience in the sector. I have a list on contacts/clients who having worked with over the past 8-10 years are more than willing to give me the business or at least a better than average chance of placing candidates due to the good working relationship which exists. I have given myself the next few weeks to get things set up whilst working full time, working all evenings and weekends. Starting trading Jan 2018. From my initial research I need some advice guidance on the following:
- Legal Agreements
- Contracts/Accounts
- Insurance
- Marketing
- Database

I know this probably seems like pretty much everything recruitment related but having spent numerous days/nights researching I was hoping someone could send me in the right direction to get the required information on this. Any help would be greatly welcomed.

Thanks

 

[ethical PR]

REC.

 

[MartinCivil]

Without wishing to be too critical, why on earth would you want to set up a business in a field that you have absolutely no experience?

Your previous client list may be willing to give you an opportunity, but if you don't know what you are doing you will quickly begin to fall down with the service that you are providing them. As soon as you start to make their lives difficult they will look else where.

 

[Mr D]

Would you not be better setting up in a sector of which you have experience?

If you must go into recruitment, find some decent companies and copy what they are doing. And hire experienced staff.

 

[LondonMatt23]

I had an idea the No experience issue would be an issue. I am 100% aware that lack my of knowledge of the particular discipline will be my biggest stumbling block, but also know that having built of a good knowledge base in my chosen field and having been involved with the interviewing of candidates and dealing with recruitment consultants I have an understanding of what a good consultant should provide. Maybe naively but I am confident that I can provide this service with some external help, I was just looking for resources or maybe an individual/organisation who could be give me some guidance. My strategy is to keep working as I am in the role & sector I am in presently until I have got a full understanding of every element and then begin the process of changing.

 

[Mr D]

Look for a trade body of recruitment organisations. Look for trade magazines. Look for trade publications.
No idea if any of those exist, they do in other sectors.

 

[Scott@KarmaContent]

I'll be absolutely honest with you, recruitment is a tough enough business to crack when you have a wealth of experience, it's a nightmare if you don't have any. That said, a few make it work.

As mentioned before, REC should be your first port of call, they have a course that deals with all the legal obligations etc that you'll need. https://www.rec.uk.com/business-support/how-to-start-a-recruitment-business/start-up-course

 

[Simon Mills]

In relation to the insurance side, you generally have to show evidence of experience of the industry for a minimum of 2 years, but other considerations we would look at is what type of contracts you are dealing with either temp or perm and largest contract size and what industries and if any are within hazard locations. Minimum cover needed is Professional indemnity and Public Liability Insurance. Recently did one for a new start up with turnover of circa 50k for around £500.00.

Hope this helps.

 

[LondonMatt23]

Re the Insurance, I'm not sure will it help but I have been consulting for the past 3 years so would have the company accounts for these where I have consulted into companies etc. I will have a look on the REC website and see what they offer in terms of courses/information.

 

[Kev2017]

I don't want to scare you just share an experience. A school friend of mine setup a similar agency, he had experience and clients and recruits, perfect combination. One day a rival firm came and undercut him and he was out of business. It is cut throat. I really feel for (lets call him John), he had a good business and to see his rise was great to see his downfall was one of the worst things I have experienced.

Please please go and work in recruitment first to gain at least some experience. "John" is now selling kitchens for a large supermarket based DIY shop. His skills are great, good communicator, good marketer and seller. He is doing well for himself.

 

[Luke bell]

I'll shed some light on this.

I'd class myself as proof that this can work, but that depends on the amount of work you are willing to put into the business. I started my recruitment company with a friend around 1.5 years ago, although there are some lows, there are a lot of highs when you land big deals or gain good working relationships with good clients.

We had little experience in recruitment and made many mistakes that we learnt a lot from. We now have our structure in place and everything runs smoothly(ish) and we have gained over 100 clients, of which 85% of them use us time and time again.

My advice here would be to differentiate yourself from everybody else, make sure your sales process is spot on and over delivery on everything. Recruitment is a very frustrating, cut-throat industry with a lot of competition, just don't be like the cowboys.

 

[LondonMatt23]

I'll shed some light on this.

I'd class myself as proof that this can work, but that depends on the amount of work you are willing to put into the business. I started my recruitment company with a friend around 1.5 years ago, although there are some lows, there are a lot of highs when you land big deals or gain good working relationships with good clients.

We had little experience in recruitment and made many mistakes that we learnt a lot from. We now have our structure in place and everything runs smoothly(ish) and we have gained over 100 clients, of which 85% of them use us time and time again.

My advice here would be to differentiate yourself from everybody else, make sure your sales process is spot on and over delivery on everything. Recruitment is a very frustrating, cut-throat industry with a lot of competition, just don't be like the cowboys.

Good to hear that there are people whohave made this work. Do you mind me asking how you gained the knowledge needed to get it up and running ?

 

[Luke bell]

Research, research, research. Don't focus too much on competitors, but study them and learn the process the best you can, you will them come up with your own way of doing things to suit the needs of clients. Most recruitment agencies work on percentage fees, and when I first started out, I literally called my competitors and posed as an employer to find out what their fees are. But the main thing I learned was to be as flexible as possible and adapt to any situation to meet the clients needs. There is also a lot of information on the internet, ask Google the question and somebody will have an answer.

You do need "thick skin" to be a recruitment consultant, so be prepared for all the rubbish times like clients never getting back to you, candidates not turning up to interviews, refunds for people leaving jobs etc etc. People are unpredictable. And if you have a business plan, use it to gain funding, then bin it, because in this game it's all about testing and finding what works.

On the plus side, your clients will become close to you if you deliver for them and will always throw money your way, building relationships and contacts is important in any business, but can be the lifeblood of a recruitment business. Work hard but work smart.