Over the past 10+ years, I have received an astonishing number of enquiries from non-recruiters who wanted to start their own recruitment agency. These include nurses, doctors, warehouse workers, site managers and IT consultants. Whilst some of these enquiries may have the skills to run their own recruitment agency and be successful, it was often very apparent from the first conversation that there is a large misunderstanding of how a recruitment agency works and their misguided plans on how they would grow their business. Here are 6 reasons non-recruiters should NOT start their own recruitment agency.
RECRUITMENT IS NOT AS EASY AS IT APPEARS
There is a huge misconception that recruitment is easy and can be done by anyone. The belief that you pick up the phone to a client, pick a placement and then on the next call, you can find the perfect candidate to meet the client’s needs is a fantasy. Recruitment is a profession that needs training and time to perfect over some time to be a successful recruiter and not something you can just do starting tomorrow.
FINDING SOMEONE A JOB DOES NOT QUALIFY YOU AS A RECRUITER
Sometimes when you have a job, you may be asked if you know anyone who fits the bill for a new position within the company and you may have a friend or previous colleague who may be perfect. Unfortunately, this does not qualify someone as a recruiter and is only a mild and limited taster of the recruitment process followed by an experienced recruiter. There is more to recruitment than just finding someone a job.
STARTING A NEW COMPANY IS HARD ENOUGH
Every year, over 8,000 new recruitment agencies are formed at Companies House, with a large portion failing in their first year. Many of these new agencies will be run by experienced recruiters, yet they still fail. If the person starting a new recruitment agency must also learn the recruitment process and is untested in this industry, there is an even higher chance that the business will fail.
BANKS AND INVOICE FINANCE COMPANIES WILL WANT PREVIOUS EXPERIENCE
If a new recruitment agency wants to start making contract or temporary placements and requires some finance to pay the candidate before the client makes payment, the funder will often ask for a CV or LinkedIn profile to confirm their previous experience as a recruiter. If this is missing, it may hinder the agency’s chances of securing the required finance or there could be additional charges or security required to protect the funds being borrowed.
CLIENTS WILL WANT INDUSTRY EXPERTS…RECRUITMENT INDUSTRY EXPERTS
Although a doctor who wants to start their own recruitment agency will have inside knowledge on the workings and requirements of the medical industry, they won’t have the required knowledge on ensuring that the placements made are made compliantly. Therefore, clients will often complete their own due diligence on a recruitment agency including the recruitment working history of the company owners.
IF YOU GET IT WRONG, IT CAN BE A COSTLY VENTURE
Setting up a new recruitment agency does have numerous costs associated with it and making that first placement can take some time to come in. Established recruiters will often have clients and relationships they can call on to hopefully make that first placement as soon as possible. However, without previous experience it may be that the first placement may take longer to hit the books and cause financial pressure on the company. If the agency does not make a placement at all then the business may end up having to close with a loss against the directors.
MAYACHI Ltd has many years of experience helping and advising experienced recruitment consultants on how to start their first recruitment business. We can provide advice on what is required to start a recruitment agency, make introductions to the industry suppliers and arrange finance if they are making contract/temporary placements. However, it is important to note that MAYACHI does not teach the recruitment process and in those circumstances, we will advise the non-recruiter to work within a recruitment agency environment for 6-9 months first before deciding if they actually want to start their first agency.
