A recent survey showed that 50% of recruitment companies fail within the first 5 years, and past studies have suggested that up to 60-80% fail within the first 12 months.
As lucrative an industry as recruitment is, it’s still a risk to start a new agency. But with the right planning, dedication, and support, it’s very possible to see great success.
If you’re thinking about starting a recruitment agency, or are early on in your journey, we’re here to help.
Here are a few things to keep in mind if you want your business to last.
Why Direction is So Important
Temporary recruitment is not an industry where you can change direction on a whim. Some agencies are able to pivot, but this is a risky move that takes years or even decades.
Once you start building up your database, those temporary workers need to be the best options for your clients. If you start to chase a new type of client, and you don’t have the workers to fill their vacancies, you’ll just be spinning your wheels.
That’s why you need to establish the direction of your agency from day one. Many agencies keep things quite generic, providing workers for logistics, education, healthcare and more. But in those crucial early years, a niche will serve you well.
How to Choose your Recruitment Niche
When you have a niche, your agency becomes much more focused. Not only will you have a database full of workers with specific talents, such as doctors and nurses for the healthcare sector, but you’ll be more appealing to clients who need them.
Put yourself in their shoes, would you rather trust an agency that does a bit of everything, or one that understands your industry almost as well as you do?
The latter is very important. You need to not only understand recruiting, but the industries you want to support. This helps with building client relationships and means you can take a more direct approach to marketing.
There’s no ‘best’ niche to go with, as it can be affected by multiple factors. A lot of new recruitment agencies are started by people who have a lot of recruitment experience and want to strike out on their own. Naturally, they’ll want to play to their strengths.
When to Avoid Expensive Overheads
If you start a new business, you’ll have a budget to spend. This budget might be relatively small, or could be backed up by a loan designed to get you started. Either way, you need to spend it wisely.
One reason that many new agencies fail is because they spend too much in the wrong places. They get sold a fancy CRM that doesn’t suit them, but costs a fortune, while a simpler version could’ve been much better.
Cash flow is crucial for any temporary recruitment agency. If you can’t pay your workers on time because of a late invoice, or because you don’t have any funds in reserve, your reputation will soon be in tatters, and your database will be lacking skilled workers.
To ensure your cash flow stays consistent, without restricting business growth, there’s one service that’s worth investing in.
The Best Support for New Recruitment Agencies
One of the biggest drains on both time and resources is handling the back office yourself. Admin takes time if you want to do it properly, and it’ll take longer if it’s being completed by people who aren’t admin experts.
We understand why in those early years you want to keep your team compact. But if each individual is stretched thin, they aren’t helping you to grow at the rate you need.
That’s where we come in. Unlike other third-party providers, who feel detached from your business, we become an extension of your agency.
Our all-in-one service includes the following:
From ensuring that you always have funds available to pay your workers to more accurate invoices, you get all of this for one single fee.
Here’s how it works:
How our Service helps you Succeed
When you sign up with us, you’ll have two main points of contact. One is your payroll account manager, who as the name suggests, will be in charge of payroll and taking care of your temp workers.
Your dedicated credit controller will be keeping a close eye on the credit limits of your clients, adjusting them when necessary. Their human-focused approach will help to improve the relationship between your agency and your clients, so they stick around for a long time.
But before they get started, you’ll first meet with one of our talented onboarding managers. They’ll guide you through the process if this is your first time using back-office support, answering all your questions and ensuring peace of mind from day one.
A Temporary Recruitment Agency that’s Built to Last
With the right support backing you up, your agency can soar, and won’t become just another statistic.
We work with both new agencies and established ones, giving them the tools they need to expand their business, regardless of niche. A lot of the agencies we work with joined us when they were just getting started, and are now some of the biggest names out there!
So if that is an exclusive club that you’d like to join, we hope to hear from you soon!
