How to start your own recruitment company

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If you’re a recruiter looking for your next challenge, starting your own recruitment agency may be the logical next step. Find out what’s involved as you launch and grow your start-up.

You’ve spotted a gap in the market; you know your recruitment niche inside out and you’re pretty sure you understand your competitors too. What next?

If you’re thinking of starting your own recruitment business, you’ll already realise there’s lots to do. Here’s some advice on the nuts and bolts of things on your new business checklist.

Write a business plan to start your own recruitment agency

Putting in the time to write a solid business plan for your new recruitment agency is crucial at the start of your journey.

It’ll make you thoroughly think through all the elements involved in making your startup thrive. This is vital especially if you’re looking for finance or investment.

Here are the bare bones of what it should contain:

  • A brief introduction and executive summary of the plan
  • Your vision and business idea, including your unique selling proposition (USP)
  • Your personal experience and qualities that make you likely to succeed
  • Analysis of your competitors and proof that your company can exploit a niche in the market
  • Your pricing structure, whether you’re recruiting for temporary or permanent candidates
  • Your sales and marketing plan
  • Your operations plan, including where you’ll work, IT and management information systems you’ll use
  • Your financial forecasts, including cash flow and profit and loss forecast

You can find out more on how to write a business plan, here.

Decide on your business structure

Your new recruitment company can be registered as one of these:

  • A sole trader
  • A limited company
  • An ordinary partnership

Each has pros and cons. Find out more information on the differences between each one, here. Once you’ve decided? It’s time to register your business with HMRC via

Get the right business insurance

Get peace of mind and legal protection if something goes wrong with business insurance. On your list should be:

  • Professional indemnity insurance to protect you against claims of negligence, breach of confidentiality, dishonesty, libel and slander
  • Employers’ liability cover if you employ another person
  • Public liability insurance in the event of an accident or injury because of your business

Comply with recruitment legislation

Every recruitment agency must comply with The Conduct of Employment Agencies and Employment Businesses Regulations 2003. You may also need to apply for a business license. Find out on the License Finder Tool.

It’s good to know about the Recruitment and Employment Confederation (REC) Code of Professional Practice. This is a guide to follow to ensure your agency is ethical and works to the highest standards.

Complying with General Data Protection Regulation (GDPR) framework is vital, too.  As a recruitment agency you’ll be holding sensitive data: people’s personal data and information on clients.

Decide on accounting systems

Payroll is a core function of recruitment businesses. This is especially true for agencies that deal with temporary roles. From payroll management to processing timesheets, payslips to P45s, there are plenty of software options with various functionalities to help you get started.

Hone your marketing strategy

Without a solid digital marketing strategy, you won’t be able to find clients or candidates - or get your jobs in front of those candidates.

Recruitment businesses rely on online job boards, plus social media marketing and pay-per-click (PPC) ads on Google. A responsive and interactive website is also non-negotiable, as is regularly updated relevant content for search engine optimisation (SEO).

Get an applicant tracking system

An important tool for recruiters is an applicant tracking system, or ATS. This software manages the process of recruitment from start to finish, tracking candidates from job ad to job offer.

It contains the online candidate databases you create (or inherit). Plus, it’s a way to collect and organise information based on job hunters’ experience and skills. There are different functionalities for ATS, including automating job postings across platforms and easy interview scheduling.

Decide on premises for your recruitment company

Will you need an office space? As many recruitment start-ups are exclusively digital-only, they can be started from home.

But your businesses may need to rent premises as it grows. If you carry out in-person interviews, you’ll need to think where they will take place.

Find out about the finance options to start your own recruitment agency

Cash flow is a significant factor in many new recruitment startups failing. From business loans to small business grants, franchising to joint ventures, there are different options for financing your business. With a joint venture you get financial backing, support and mentoring to help you succeed.

At the HR GO Recruitment Group we help recruitment start-ups and existing companies grow in this way. Joint ventures mean you still own equity in their company. You also get other benefits including expert back office support to take care of many of the tasks we’ve covered in this piece.

This frees you up to do what you do best, which is to find the best employees for your clients and establish a recruitment business set to thrive.

Learn more about joint ventures with the HR GO Group

At the HR GO Recruitment Group we’re helping recruitment businesses enjoy prosperous long-term futures. Find out how our recruitment industry experience can help you with a joint venture with the HR GO Group.

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