Growing a recruitment agency often starts with a director hiring recruitment consultants and maybe looking after an element of the back office themselves with an external accountant. As the business starts to expand and the burden on the back office and accounts functions increases, the director will need to decide on how these aspects should be handled going forward. The two options will be to either hiring back-office staff to look after all or parts of the back office and accounting functions or to outsource all of it to an external provider.
If the director is considering hiring internal back-office staff is the best options, they should first answer the questions below: –
WOULD IT BE BETTER TO OUTSOURCE INSTEAD OF HIRING BACK-OFFICE STAFF?
The first port of call for any decision on taking on internal back-office and accounting staff should be to consider whether the role can be achieved by an outsourced provider. The recruitment sector is lucky to have a myriad of outsourcing companies able to fulfil a variety of back-office roles, including compliance, pay-and-bill functions, credit control, bookkeeping, accounting and company secretarial work which means that outsourcing is certainly worth considering when reviewing internal staff.
WILL I BE ABLE TO MANAGE THIS PROCESS INTERNALLY?
Most recruitment directors come from a sales background and will often be able to manage and direct other recruitment consultants that they take on within their business. However, back office and accounting staff have very different personalities to recruitment consultants which needs to be taken into consideration. Also, many of the tasks completed by back office and accounting staff will not be something the director has managed previously so could be done incorrectly or inefficiently at a greater cost to the business.
WHAT WILL BE THE COST TO THE BUSINESS?
Whereas a recruitment consultant who comes into an agency will be generating profit for the business, a back office or accounts person will be classed as a non-biller. These staff members will be paid a high salary (with annual pay rises), take up more office space and require additional software to complete their job alongside ongoing training.
WHAT ELSE WILL I NEED TO CONSIDER IF I HIRE BACK-OFFICE STAFF?
If a portion or all the back office and accounting functions are taken internally then there needs to be a consideration of “what happens if” regarding holiday, sickness, injury, long term absence or leaving the business. Often the role of an internal back-office administrator will be intrinsic to the business operations so if this team member is absent then a back up plan needs to be in place, or this could stop certain functions from occurring. This is another reason to consider outsourcing as this should provide continuity of service for the agency.
MAYACHI Ltd has many years’ experiences of working within the back-office and accounting side of recruitment, ranging from running an umbrella company, a pay-and-bill service and a fully outsourced back office and accountancy firm to working internally within a large recruitment agency. MAYACHI understands both sides of the argument to hiring internal staff vs outsourcing all or some functions and works with recruitment agency directors to understand what option would be best for them.
