How to Start a Recruitment Agency

This page is designed for anyone thinking about how to start a recruiting agency. It is not a comprehensive "How to" guide, but it does contain guidance, ideas and food for thought for new players.

Your accountant is one of your most important advisors. Good accountants are generally best found by referral. Finding an accountant with experience in recruitment is a nice to have, but more importantly, find an accountant you like and trust. Poor advice, or lack of advice, can be one of the fastest ways to bring your business undone, so take your time selecting the right firm.

Selecting a name can be very time consuming. The most important thing is finding a name where the domain name is available. Avoid less obvious high level TLDs like .io, .jobs, .net etc as they are less intuitive to find. You really want to get the name in the most common domain extension for the country in which you work – eg .com for the USA, for Australia, for UK for New Zealand and so on.

JobAdder started life as a recruitment agency in 2001 so we have a unique understanding of what it takes to build and run an agency. We are also very fortunate to have a lot of startup agencies joining us each month so we get to learn and grow with them. What you need to start a recruiting agency:

Cloud based software solutions will minimise your setup costs and hardware requirements, allowing you to get to work more quickly.

Cloud based software solutions will minimise your setup costs and hardware requirements, allowing you to get to work more quickly.

Accounting and invoicing
HR (When you need it)
Recruitment Software

The great news is that you don’t need to spend a fortune on a website. The days of $10,000 and $20,000 websites for small businesses are long gone. As a startup you only need to spend a few hundred dollars to get a great website up and running. Take your time and shop around, ask your friends or colleagues as there is a very good chance that someone in your network will know someone who can put together a beautiful site.

Check out sites like WordPressTemplate MonsterWixSitebuilder and many more.

No, no, no stop it! You don’t need any of these things when starting out (and in our opinion, ever). Going paperless and wireless is easier than you might think. Connect with people via LinkedIn or Google, read resumes online and make notes before your interviews (reading resumes in interviews is lazy), and scan documents via your mobile phone. Use the money you save and take your partner out to dinner. (Lord knows you will need the credit points in the months ahead!).

A few extra expert tips about starting out

Personal relationships are everything in recruitment. Spend time getting to know your clients personally. Take them to lunch, invite them to golf, call them and say hi each week, share information with them whenever you can. This may sound obvious, but the art of relationship building is slowly disappearing in many sectors of recruitment.

There is a reason recruiters are called ‘consultants’. The best recruiters develop huge amounts of industry expertise and they share that knowledge openly with their clients. Company owners and hiring managers need experts they can call on to discuss the latest salary rates, availability of resources and so on. Be that person your clients turn to, and do it for free – the benefits will follow.

Despite the promises of LinkedIn, connecting with people online is not really what networking is all about. Conduct meetings in coffee shops, go and visit your clients, attend industry events, and get out and talk to people face to face as much as you can. Recruitment is all about networking however for many people now it has become little more than administration and data entry. Forget the office and get out and meet as many people as you possibly can.

Most recruiters only need to make a small number of placements a month to be a successful, so why not pick your top candidates and spend more time with them? This might sound crazy today but when I was recruiting I used to meet candidates an hour before their interview and buy them a coffee, run over the interview in detail and answer any last minute questions they had. I then walked them to their interview and physically introduced them to my client.
It was a small thing to do but my success rates went through the roof. Even when the candidates did not get the job, the client feedback was always more positive because the candidates were more prepared. This may not work for everyone, but think about what you can do to make the recruitment process more personal.

When starting out it is important not to get too fixated with your terms. This doesn’t necessarily mean you should discount, but you should be creative and experiment with different arrangements to find what works best for you and your clients. Talk to clients about fixed fee arrangements, retainers, exclusivity and so on. You’ll be surprised at the deals you can do if you are providing a higher level of personal service than your competitors.

Fee disputes can be dramatically minimised (if not eradicated) by working only with clients you have, or can build, relationships with. The majority of fee disputes in recruitment involve transactions with weak personal relationships between client and consultant. If a company holds you at arm’s length and you can’t get a relationship going then the chances of a successful recruiting relationship are slim especially when starting a staffing company.