{"id":19146,"date":"2022-03-31T02:22:26","date_gmt":"2022-03-31T01:22:26","guid":{"rendered":"http:\/\/startups.co.uk\/?p=19146"},"modified":"2022-09-06T11:18:01","modified_gmt":"2022-09-06T11:18:01","slug":"how-to-start-a-recruitment-business","status":"publish","type":"post","link":"https:\/\/startups.co.uk\/guides\/how-to-start-a-recruitment-business\/","title":{"rendered":"How to start a recruitment business"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column] <\/p><div class=\"flexi-comp-lw\">\n <div class=\"flexi-comp-lw-text\">\n <p>Startups.co.uk is reader supported &ndash; we may earn a commission from our recommendations, at no extra cost to you and without impacting our editorial impartiality.<\/p>\n <\/div>\n <\/div>\n[\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text title_type=&rdquo;h1&Prime;]Today&rsquo;s recruitment companies are very busy. Post-COVID, the so-called &lsquo;great resignation&rsquo; has taken place, with employees up and down the country searching for better jobs made available thanks to the advent of remote working.\n<p>Companies are now grappling with a cross-sector labour shortage, while immigration issues caused by Brexit have only aggravated the situation. While this is undeniably a hard environment for recruitment companies to deliver in, the medium to long-term prospects for the industry look very different.<\/p>\n<p>As a recession looms, job seekers are likely to lose confidence in switching roles. Soon, the risk of saying goodbye to a stable salary during a cost of living crisis will outweigh the benefits created by finding a new employer.<\/p>\n<p>Given the mixed bag of opportunities available, any recruitment startup needs to stay on top of the market and ensure they are setting up a business that meets the exacting demands of clients. Below, we&rsquo;ll get you fully up-to-date on how to set up recruitment firm. We&rsquo;ll through the type of experience and level of expertise required, to the kind of fees and profits you can look forward to.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column]\n <\/p><div class=\"highlight-box\">\n <div class=\"highlight-box-decor\">\n <svg class=\"brush-stroke-svg brush-stroke-big\" preserveaspectratio=\"none\" viewbox=\"0 0 116 6\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\">\n <g stroke=\"none\" stroke-width=\"1\" fill=\"#00b59b\">\n <path d=\"M94.0845406,5.55784045 C93.4629887,5.58758734 92.7723755,5.58758734 92.2198849,5.64708111 C92.0127009,5.66195455 91.7824965,5.67682799 91.5062512,5.66195455 C89.5955547,5.58758734 87.6618377,5.5727139 85.7511411,5.67682799 C85.5669776,5.69170144 85.2446914,5.67682799 84.9914666,5.67682799 C82.8275451,5.66195455 80.6866442,5.63220767 78.4997023,5.67682799 C76.0825561,5.72144832 73.5963485,5.64708111 71.271284,5.73632176 C69.3605874,5.81068898 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C86.1792662,4.06014784 86.2696559,4.04074932 86.2696559,4.0213508 Z\"><\/path>\n <\/g>\n <\/svg>\n <\/div>\n <div class=\"highlight-box-headline\">\n \n <span class=\"highlight-box-title\">\n Everything you need to create a recruitment agency website <\/span>\n <\/div>\n \n <div class=\"highlight-box-content\">\n <p>There&rsquo;s a lot of planning that needs to go into launching a successful recruitment agency. Thankfully, one area which needn&rsquo;t cause undue stress is creating a website to promote your business. Thanks to <strong><a href=\"https:\/\/startups.co.uk\/go\/Wix-WB-recruitment\" target=\"_blank\" rel=\"noopener\" data-cta-type=\"inline-link\">modern templates like the one below<\/a><\/strong>, you can create one of your own in under an hour.<\/p>\n<p><a href=\"https:\/\/startups.co.uk\/go\/Wix-WB-recruitment\" target=\"_blank\" rel=\"noopener\" data-cta-type=\"inline-link\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-150578 size-full\" src=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2022\/06\/Recruitment-Service-Website-Template.jpg\" alt=\"Recruitment Agency Website Template\" width=\"720\" height=\"463\" srcset=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2022\/06\/Recruitment-Service-Website-Template.jpg 720w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2022\/06\/Recruitment-Service-Website-Template-480x309.jpg 480w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2022\/06\/Recruitment-Service-Website-Template-640x412.jpg 640w\" sizes=\"(max-width: 720px) 100vw, 720px\"><\/a><\/p>\n<p>At Startups.co.uk, we test and rate website builder tools, and we&rsquo;ve identified Wix as one of the best you can choose for creating a business site. Wix even has a selection of&nbsp;<a href=\"https:\/\/startups.co.uk\/go\/Wix-WB-recruitment\" target=\"_blank\" rel=\"noopener\" data-cta-type=\"inline-link\"><strong>custom website templates designed specifically for recruitment agencies<\/strong><\/a>&nbsp;&ndash; you simply drop your own company information, wording and preferred imagery into your chosen template. Better still, it&rsquo;s completely&nbsp;<strong>free to try<\/strong>&nbsp;for yourself.<\/p>\n <\/div>\n <\/div>\n[\/vc_column][\/vc_row][vc_row][vc_column]<div class=\"jumplinks-content\">\n <ul class=\"jumplinks-content-list\">\n <li class=\"jumplinks-content-item\">\n <a class=\"jumplinks-content-link jumplink-anchor\" href=\"#link-create-a-recruitment-business-plan\">Create a recruitment business plan<\/a>\n <\/li>\n <li class=\"jumplinks-content-item\">\n <a class=\"jumplinks-content-link jumplink-anchor\" href=\"#link-recruitment-pricing-structure\">Recruitment pricing structure<\/a>\n <\/li>\n <li class=\"jumplinks-content-item\">\n <a class=\"jumplinks-content-link jumplink-anchor\" href=\"#link-find-your-niche\">Find your niche<\/a>\n <\/li>\n <li class=\"jumplinks-content-item\">\n <a class=\"jumplinks-content-link jumplink-anchor\" href=\"#link-innovate\">Innovate<\/a>\n <\/li>\n <li class=\"jumplinks-content-item\">\n <a class=\"jumplinks-content-link jumplink-anchor\" href=\"#link-recruitment-startup-costs\">Recruitment startup costs<\/a>\n <\/li>\n <li class=\"jumplinks-content-item\">\n <a class=\"jumplinks-content-link jumplink-anchor\" href=\"#link-financing-your-recruitment-business\">Financing your recruitment business<\/a>\n <\/li>\n <li class=\"jumplinks-content-item\">\n <a class=\"jumplinks-content-link jumplink-anchor\" href=\"#link-recruitment-laws-and-regulations\">Recruitment laws and regulations<\/a>\n <\/li>\n <li class=\"jumplinks-content-item\">\n <a class=\"jumplinks-content-link jumplink-anchor\" href=\"#link-final-thoughts\">Final thoughts<\/a>\n <\/li>\n <\/ul>\n<\/div>\n[\/vc_column][\/vc_row][vc_row][vc_column]\n <div class=\"highlight-box\">\n <div class=\"highlight-box-decor\">\n <svg class=\"brush-stroke-svg brush-stroke-big\" preserveaspectratio=\"none\" viewbox=\"0 0 116 6\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\">\n <g stroke=\"none\" stroke-width=\"1\" 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90.4680271,4.01704002 90.3776375,4.01704002 C90.1365986,4.01704002 90.0160791,4.03643854 90.1667284,4.05583706 C90.2269882,4.05583706 90.4077674,4.07523558 90.498157,4.05583706 C90.5885466,4.07523558 90.6186765,4.05583706 90.6789362,4.03643854 Z M86.2696559,4.0213508 C86.0888766,4.0213508 85.9080974,4.0213508 85.7273182,4.0213508 C85.546539,4.0213508 85.4260195,4.04074932 85.4862792,4.04074932 C85.6369286,4.04074932 85.8478377,4.06014784 86.0286169,4.06014784 C86.1792662,4.06014784 86.2696559,4.04074932 86.2696559,4.0213508 Z\"><\/path>\n <\/g>\n <\/svg>\n <\/div>\n <div class=\"highlight-box-headline\">\n \n <span class=\"highlight-box-title\">\n Startups.co.uk can help your business succeed <\/span>\n <\/div>\n \n <div class=\"highlight-box-content\">\n <p>At Startups.co.uk, we&rsquo;re here to help small UK businesses to get started, grow and succeed. We have helpful resources for helping new businesses get off the ground &ndash; you can use the tool below to get started today.<\/p>\n <\/div>\n <\/div>\n<div class=\"flexi-comp-radio-cta\" data-eventcategory=\"reusable-components\" data-component=\"radio-cta\">\n <p class=\"flexi-comp-radio-cta-title\" aria-label=\"What Does Your Business Need Help With?\">\n What Does Your Business Need Help With? <\/p>\n <div class=\"flexi-comp-radio-cta-box\" data-eventaction=\"radio-cta\">\n <button class=\"flexi-comp-radio-cta-item checked\" data-eventlabel=\"Project Planning\" data-url=\"https:\/\/startups.co.uk\/go\/project-management\">\n <span class=\"flexi-comp-radio-cta-icon\"><\/span>\n Project Planning <\/button>\n\n <button class=\"flexi-comp-radio-cta-item\" data-eventlabel=\"Creating a Website\" data-url=\"https:\/\/startups.co.uk\/go\/website\">\n <span class=\"flexi-comp-radio-cta-icon\"><\/span>\n Creating a Website <\/button>\n\n <button class=\"flexi-comp-radio-cta-item\" data-eventlabel=\"Getting a Business Loan\" data-url=\"https:\/\/startups.co.uk\/go\/business-loans\">\n <span class=\"flexi-comp-radio-cta-icon\"><\/span>\n Getting a Business Loan <\/button>\n\n <button class=\"flexi-comp-radio-cta-item\" data-eventlabel=\"Business Bank Account\" data-url=\"https:\/\/startups.co.uk\/go\/business-banking\">\n <span class=\"flexi-comp-radio-cta-icon\"><\/span>\n Business Bank Account <\/button>\n <\/div>\n\n <a href=\"https:\/\/startups.co.uk\/go\/project-management\" class=\"flexi-comp-radio-cta-button\" data-eventlabel=\"https:\/\/startups.co.uk\/go\/project-management\" data-ft-links-attr-enabled=\"1\" data-cta-type=\"cta-button\">\n Get Started <\/a>\n\n<\/div>[\/vc_column][\/vc_row][vc_row][vc_column]<div class=\"jumplink-anchor-section\">\n <div class=\"jumplink-anchor-pointer\" id=\"link-create-a-recruitment-business-plan\"><\/div>\n<\/div>\n[vc_column_text show_in_index=&rdquo;true&rdquo; title_index=&rdquo;Create a recruitment business plan&rdquo; hash_url=&rdquo;&rdquo; title=&rdquo;Create a recruitment business plan&rdquo;]\n<h2>Create a recruitment business plan<\/h2>\n<p>As with any business, don&rsquo;t do anything before you&rsquo;ve created your recruitment business plan. Our easy-to-use <a href=\"https:\/\/startups.co.uk\/strategy\/business-plan-template\/\">template<\/a> will take you through each step of the process, but you essentially need to cover the following points:<\/p>\n<ul>\n<li><strong>About you<\/strong> &ndash; Discuss what makes you a good fit to run a recruitment business, and why you want to run one. Discuss your experience, contacts, qualifications, and personal qualities, and make sure to sell yourself<\/li>\n<li><strong>About your business<\/strong> &ndash; There are a wide range of recruitment types, so you&rsquo;ll need to make clear exactly what your recruitment business aims to do. Which sectors do you want to work in? Do you want to focus on full-time or part-time employees? Is there a particular demographic you feel an affinity with and can target? You&rsquo;ll also need to explain staffing, and crucially, how you plan to finance your business.<\/li>\n<li><strong>Market research<\/strong> &ndash; Here you can go into more detail on your target market and competitors &ndash; how are you going to stand out and attract business? Identify a geographic area that you&rsquo;ll initially focus on &ndash; even if you don&rsquo;t have an office to start with, you&rsquo;ll likely need to meet candidates and clients in person, so choose the location for your business carefully.<\/li>\n<li><strong>Costs and business forecast<\/strong> &ndash; Here, you&rsquo;ll need to outline all the costs your business might incur &ndash; everything from website development to office space and business insurance. 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C110.659258,4.26385096 105.295495,4.23410407 99.9317325,4.2787244 C103.914269,4.33821817 107.988887,4.30847129 112.224648,4.33821817 C110.429053,4.44233227 109.853542,4.45720571 108.334193,4.45720571 C107.252233,4.45720571 106.193292,4.45720571 105.088311,4.47207915 C104.075412,4.4869526 103.039492,4.4869526 102.003572,4.47207915 C101.312959,4.45720571 100.599325,4.44233227 99.6554872,4.51669948 C101.220877,4.54644636 102.533042,4.54644636 103.822187,4.54644636 C104.673943,4.54644636 105.54872,4.51669948 106.239333,4.60594013 C106.60766,4.65056046 107.367335,4.63568702 107.827744,4.60594013 C108.449295,4.56131981 108.909704,4.56131981 109.485215,4.60594013 C109.669379,4.62081358 109.945624,4.62081358 110.198849,4.63568702 C111.741218,4.6654339 111.741218,4.6654339 111.165707,4.82904177 C112.086525,4.85878866 112.477873,4.73980112 113.37567,4.73980112 C114.250447,4.75467456 114.96408,4.769548 115.539591,4.84391521 C115.125223,4.8736621 114.641794,4.8736621 114.227426,4.8736621 C111.027585,4.8736621 107.850764,4.94802931 104.650923,4.91828243 C103.868228,4.90340898 102.510022,4.88853554 102.440961,4.96290275 C102.348879,5.05214341 103.661044,5.00752308 104.328637,5.02239652 C105.387577,5.05214341 106.492558,5.03726997 107.574519,5.03726997 C107.988887,5.03726997 108.495336,5.02239652 108.863663,5.06701685 C108.403255,5.11163718 107.873784,5.09676374 107.390355,5.09676374 C105.479659,5.11163718 103.568962,5.11163718 101.658266,5.14138406 C100.85255,5.15625751 100.392141,5.17113095 100.32308,5.2603716 C100.254019,5.3644857 99.6785076,5.37935914 98.8037309,5.3644857 C97.7908315,5.34961226 96.7779321,5.33473882 95.7650327,5.30499193 C94.6140107,5.29011849 93.53205,5.34961226 92.4731097,5.3644857 C91.5062512,5.37935914 90.5393927,5.30499193 89.2962889,5.30499193 C85.8432229,5.31986537 82.3901568,5.37935914 78.9370907,5.40910603 C78.6838658,5.40910603 78.3385592,5.42397947 78.1774162,5.40910603 C77.0033737,5.31986537 75.9674539,5.34961226 74.770391,5.43885291 C74.1258186,5.48347324 73.1589601,5.4685998 72.3302243,5.48347324 C73.7344711,5.51322013 75.138718,5.52809357 76.5659853,5.51322013 C77.7170073,5.49834668 78.8219885,5.52809357 79.9499901,5.54296701 C81.2391347,5.55784045 82.6203612,5.54296701 83.8864854,5.51322013 C84.8303235,5.49834668 85.6360389,5.49834668 86.4417543,5.52809357 C87.2014289,5.55784045 87.9150625,5.55784045 88.6977575,5.54296701 C90.4933519,5.49834668 92.3580075,5.45372636 94.0845406,5.55784045 L94.0845406,5.55784045 Z M91.8961039,4.96955873 C90.7044001,4.95016021 89.8724559,4.93076168 88.8831169,5.00835577 C89.9174259,5.08594986 90.74937,5.10534838 91.8961039,4.96955873 Z M93.3724675,4.03450419 C92.2877922,3.99570715 91.5044156,3.97630863 90.4197403,4.05390271 C91.5345455,4.09269976 92.3179221,4.09269976 93.3724675,4.03450419 Z M59.2202597,5.01655435 C60.0337662,5.05535139 60.5761039,5.05535139 61.2992208,4.99715582 C60.5761039,4.9777573 60.0638961,4.95835878 59.2202597,5.01655435 Z M97.3194805,4.04095243 C97.0181818,4.00215539 96.6566234,4.00215539 96.3553247,4.00215539 C96.0238961,4.00215539 95.5418182,3.98275687 95.5116883,4.06035096 C96.0841558,4.099148 96.6264935,4.07974948 97.3194805,4.04095243 Z M97.0040743,4.04074932 C96.9438145,4.00195228 96.7027756,4.00195228 96.4014769,4.00195228 C96.130308,4.00195228 95.8290093,4.0213508 95.8290093,4.04074932 C95.7988795,4.07954636 96.130308,4.07954636 96.4014769,4.07954636 C96.6726457,4.07954636 96.9438145,4.07954636 97.0040743,4.04074932 Z M97.843095,5.03977318 C98.1745236,5.03977318 98.5059521,5.02037466 98.4155625,5.00097614 C98.3854327,4.98157762 98.1142638,4.98157762 97.9334846,4.98157762 C97.6623158,4.98157762 97.3610171,4.98157762 97.4212768,5.02037466 C97.4815366,5.02037466 97.7527054,5.02037466 97.843095,5.03977318 Z M10.7864935,4.05859596 C11.7205195,4.05859596 12.3231169,4.07799448 13.3174026,4.01979892 C12.3231169,4.03919744 11.7205195,4.0004004 10.7864935,4.05859596 Z M93.4369469,5.03977318 C93.5273365,5.03977318 93.7081157,5.02037466 93.7081157,5.02037466 C93.7382456,5.00097614 93.5574663,4.98157762 93.3766871,4.98157762 C93.2862975,4.98157762 93.1055183,5.00097614 93.1055183,5.00097614 C93.0452585,5.03977318 93.2260378,5.03977318 93.4369469,5.03977318 Z M64.6758363,6 C64.7963558,6 64.977135,6 65.0072649,6 C65.1579143,5.98060148 64.977135,5.96120296 64.7963558,5.96120296 C64.7059662,5.96120296 64.5854467,5.96120296 64.4950571,5.98060148 C64.5553169,5.98060148 64.6155766,5.98060148 64.6758363,6 Z M90.6789362,4.03643854 C90.5885466,4.03643854 90.4680271,4.01704002 90.3776375,4.01704002 C90.1365986,4.01704002 90.0160791,4.03643854 90.1667284,4.05583706 C90.2269882,4.05583706 90.4077674,4.07523558 90.498157,4.05583706 C90.5885466,4.07523558 90.6186765,4.05583706 90.6789362,4.03643854 Z M86.2696559,4.0213508 C86.0888766,4.0213508 85.9080974,4.0213508 85.7273182,4.0213508 C85.546539,4.0213508 85.4260195,4.04074932 85.4862792,4.04074932 C85.6369286,4.04074932 85.8478377,4.06014784 86.0286169,4.06014784 C86.1792662,4.06014784 86.2696559,4.04074932 86.2696559,4.0213508 Z\"><\/path>\n <\/g>\n <\/svg>\n <\/div>\n <div class=\"highlight-box-headline\">\n \n <span class=\"highlight-box-title\">\n Consider franchising <\/span>\n <\/div>\n \n <div class=\"highlight-box-content\">\n <p>While it may not be quite as satisfying as building your own recruitment business from scratch, opening a recruitment franchise has several key advantages. You&rsquo;ll be able to use an established brand, get expert advice from experienced recruiters, and may also find it easier to get finance than if you were starting a completely new recruitment business.<\/p>\n<p>The total investment varies, but <a href=\"https:\/\/www.travail.co.uk\/travail-franchise\" target=\"_blank\" rel=\"noopener noreferrer\">Travail Employment Group<\/a>, a leading company in this area, suggests a total of &pound;30,000 will be required &ndash; including an initial franchise fee of &pound;12,000.<\/p>\n<p>This might be a particularly suitable role for those with little recruiting experience, due to the much greater level of support offered.<\/p>\n <\/div>\n <\/div>\n[vc_column_text title_type=&rdquo;h3&Prime; title=&rdquo;Need help staying organised?&rdquo;]\n<h3>Need help staying organised?<\/h3>\n<p>Starting a recruitment business will take a number of steps and it&rsquo;s important to keep everything tracked.<\/p>\n<p>Project management tools are a great way to keep everything moving in the right direction &ndash; you can assign tasks, track progress and create projects that everyone can chip into.<\/p>\n<p><a href=\"https:\/\/webforms.startups.co.uk\/project-management-software\">Get expert help finding the right project management software for your business<\/a>.<\/p>\n<h3>Expert insight: John Lennon, THRYVE<\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-149388 aligncenter\" src=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-John-Lennon-THRYVE.jpg\" alt=\"How to start a recruitment company - John Lennon, THRYVE\" width=\"709\" height=\"460\" srcset=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-John-Lennon-THRYVE.jpg 709w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-John-Lennon-THRYVE-480x311.jpg 480w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-John-Lennon-THRYVE-640x415.jpg 640w\" sizes=\"(max-width: 709px) 100vw, 709px\"><\/p>\n<p>John Lennon (no, not that one) built innovative tech recruiter <a href=\"https:\/\/www.thryvetalent.com\/\" target=\"_blank\" rel=\"noopener\">THRYVE<\/a> from scratch to &pound;4mn turnover and told Startups that, when starting out, you should think about all the realities of owning your business rather than just focusing on how you&rsquo;ll go about getting clients and attracting candidates:<\/p>\n<p>&ldquo;If I could go back in time, my first hires would be an operations manager and a marketing manager. When you first set up a recruitment business you are a salesperson, a marketer, an accountant, bookkeeper, administrative expert, tax expert, events coordinator and so much more.<\/p>\n<p>&ldquo;It was only when I started THRYVE that I realised how little I knew about how to run a business. This is why so many recruitment companies fail &ndash; most recruitment business owners are great recruiters, but struggle with the transition to becoming a business owner.<\/p>\n<p>&ldquo;Make sure you educate yourself on basic business principles, understand how to read a profit and loss statement, understand how to forecast, take advice, get mentors and surround yourself with positive people in your space who can help you.<\/p>\n<p>&ldquo;And, most importantly, be really mindful of cash flow and your outgoings.<\/p>\n<p>&ldquo;After all, your revenue figures mean nothing if your profit levels aren&rsquo;t where you need them to be.&rdquo;<\/p>\n<hr>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column]<\/p><div class=\"jumplink-anchor-section\">\n <div class=\"jumplink-anchor-pointer\" id=\"link-recruitment-pricing-structure\"><\/div>\n<\/div>\n[vc_column_text show_in_index=&rdquo;true&rdquo; title_index=&rdquo;Recruitment pricing structure&rdquo; title=&rdquo;Recruitment pricing structure&rdquo;]\n<h2>Recruitment pricing structure<\/h2>\n<p>One of the most important decisions you&rsquo;ll make is how to price your services. This should be a crucial part of your business plan.<\/p>\n<p>The fee you charge will vary depending on whether you are recruiting permanent or temporary staff.<\/p>\n<h3>Permanent employees<\/h3>\n<p>Rates vary, but research by recruitment training company <a href=\"https:\/\/www.socialtalent.com\/blog\/recruitment\/how-much-should-i-be-paying-in-recruitment-fees\" target=\"_blank\" rel=\"noopener noreferrer\">Social Talent<\/a> indicates that you can expect to charge a one-off fee of 15-20% of the role&rsquo;s annual salary for most roles, with this rising to 25% for roles that are particularly difficult to fill. This matches the view of Tim King of IT recruitment specialist <a href=\"https:\/\/www.matchking.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Matchking<\/a>, who charges his clients 20-25% of the employee&rsquo;s annual salary.<\/p>\n<p>This assumes that you operate on a <strong>contingency<\/strong> basis &ndash; in other words, that you&rsquo;re only paid once the job has been filled by a candidate you put forward. In this case, you&rsquo;ll often be competing with other agencies.<\/p>\n<p>The other option is <strong>retained recruitment<\/strong>, where you are exclusively assigned to find candidates for a role. This usually involves a more in-depth process, and is often associated with more senior roles. Consequently, you are able to charge more &ndash; 30% is common, while experienced professionals in specialist niches charge up to 50%.<\/p>\n<p>You&rsquo;ll also be expected to factor a <strong>rebate <\/strong>into your fees, where you return part of the fee if the hired candidate leaves the job after a certain period of time. Again, the period and percentage returned varies between agencies.<\/p>\n<p>This variation in fees reflects the fact that recruitment can involve many different processes, from writing job ads to interviewing candidates, and even conducting reference checks. As a recruiter, how many of these tasks you take on will determine the fee you charge.<\/p>\n<p>When starting out, you may also want to be flexible with your fees in order to build long-term commercial relationships.<\/p>\n<h3>Temporary employees<\/h3>\n<p>Things are a little more complicated when you&rsquo;re hiring temporary employees.<\/p>\n<p>You&rsquo;ll need to factor in the following:<\/p>\n<ul>\n<li>The cost of the worker<\/li>\n<li>Holiday pay<\/li>\n<li>National Insurance<\/li>\n<li>Your desired margin<\/li>\n<\/ul>\n<p>These costs are initially paid by the agency, before being reclaimed from the client.<\/p>\n<p>The rate may also vary depending on whether the position is fixed-term or paid by the day.<\/p>\n<p>The same Social Talent research found that for a fixed six-month post, agencies would charge 12-15% of the equivalent annual salary (<em>not<\/em> the six month period the employee was being hired for).<\/p>\n<p>For a temp position that paid &pound;300 a day, agencies would charge around 15%, so approximately &pound;45 per day in this case.<\/p>\n<p>For both permanent and temporary workers, some agencies are also shifting to a flat fee structure, as this can make them more attractive to clients.<\/p>\n<hr>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column]<\/p><div class=\"jumplink-anchor-section\">\n <div class=\"jumplink-anchor-pointer\" id=\"link-find-your-niche\"><\/div>\n<\/div>\n[vc_column_text show_in_index=&rdquo;true&rdquo; title_index=&rdquo;Find your niche&rdquo; title=&rdquo;Find your niche&rdquo;]<img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-125543 size-full\" src=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/13111212\/AB-Recruit-new.png\" alt=\"AB Recruit\" width=\"640\" height=\"283\" srcset=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/13111212\/AB-Recruit-new.png 640w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/13111212\/AB-Recruit-new-480x212.png 480w\" sizes=\"(max-width: 640px) 100vw, 640px\">\n<h2>Find your niche<\/h2>\n<p>As a newly established recruiting agency, you&rsquo;re unlikely to survive unless you develop a specialist area. Trying to compete in the general recruitment space is incredibly difficult given the established brands and high visibility of the major players.<\/p>\n<p>Many of the most successful smaller scale recruitment agencies have prospered by sticking to a specialist area they know inside out.<\/p>\n<p>Adam Bolton gave great insight into how he started <a href=\"http:\/\/abrecruit.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">ABrecruit<\/a> from scratch on the <a href=\"https:\/\/theundercoverrecruiter.com\/start-recruitment-business-ab\/\" target=\"_blank\" rel=\"noopener noreferrer\">Undercover Recruiter<\/a> blog. What really comes across is how he always knew he wanted to focus on .net development, and how he leveraged his experience in this area. He knew the field, knew the people, and knew how to appeal to both companies and candidates &ndash; a plan that resulted in a thriving company which has now been going for seven years.<\/p>\n<p>A look at the <a href=\"https:\/\/startups.co.uk\/startups-100\/2019\/startups-100-2019\/\" target=\"_blank\" rel=\"noopener noreferrer\">Startups 100<\/a> reveals similar success stories &ndash; <a href=\"https:\/\/www.jhprecruitment-veterinary.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">JHP Recruitment<\/a> has prospered by focusing on veterinary recruitment, <a href=\"https:\/\/debut.careers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Debut<\/a> has made waves with its clever platform for graduate recruitment, and <a href=\"https:\/\/the-dots.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">The Dots<\/a> is providing creative professionals with a new way to be seen and hired.<\/p>\n<p>If you can, follow their lead.<\/p>\n<h3>Expert insight: James Lloyd-Townshend, Frank Recruitment Group<\/h3>\n<p><span style=\"font-weight: 400\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-149441 aligncenter\" src=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-James-Lloyd-Townshend-Frank-Recruitment-Group.jpg\" alt=\"How to start a recruitment company - James Lloyd-Townshend, Frank Recruitment Group\" width=\"709\" height=\"460\" srcset=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-James-Lloyd-Townshend-Frank-Recruitment-Group.jpg 709w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-James-Lloyd-Townshend-Frank-Recruitment-Group-480x311.jpg 480w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-James-Lloyd-Townshend-Frank-Recruitment-Group-640x415.jpg 640w\" sizes=\"(max-width: 709px) 100vw, 709px\"><\/span><\/p>\n<p><span style=\"font-weight: 400\">The chairman and CEO of technology recruitment company <a href=\"https:\/\/www.frankgroup.com\/\" target=\"_blank\" rel=\"noopener\">Frank Recruitment Group<\/a>, James Lloyd-Townshend has over 23 years of experience in the recruitment industry. Speaking to Startups, he said that while it may feel like you&rsquo;re turning down chances to make money, choosing a specialist area and sticking to it is the key to long-term success:<\/span><\/p>\n<p>&ldquo;When starting a recruitment business, you need to understand that not every opportunity is an opportunity.<\/p>\n<p>&ldquo;This is one of the most common pitfalls, especially in this industry. It&rsquo;s easy to think that, for instance, that any sector is a potential area to operate within.<\/p>\n<p>&ldquo;However, that can come at the expense of having the specialist knowledge that can actually be of value to your customers.<\/p>\n<p>&ldquo;So for us, knowing our niche and focusing just on that, allowed us to provide a level of service that a lot of our competitors have struggled to match and has allowed us to stay out in front.&rdquo;[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column]<\/p><div class=\"jumplink-anchor-section\">\n <div class=\"jumplink-anchor-pointer\" id=\"link-innovate\"><\/div>\n<\/div>\n[vc_column_text show_in_index=&rdquo;true&rdquo; title_index=&rdquo;Innovate&rdquo; title=&rdquo;Innovate&rdquo;]<img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-125542\" src=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/13110642\/Tempo.png\" alt=\"Tempo\" width=\"640\" height=\"260\" srcset=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/13110642\/Tempo.png 640w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/13110642\/Tempo-480x195.png 480w\" sizes=\"(max-width: 640px) 100vw, 640px\">\n<h2>Innovate<\/h2>\n<p>Like any other startup, new recruitment businesses can prosper by doing what their larger competitors can&rsquo;t (or won&rsquo;t) do.<\/p>\n<p>Being agile is the key. Adam Bolton of ABrecruit made the decision early on to work from 8am to 9pm on weekdays and all day on Saturday &ndash; a punishing schedule that enabled him to talk to candidates outside work hours, and have relaxed conversations about what they were really looking for. It&rsquo;s a great example of the sort of creative thinking you&rsquo;ll need to employ to make your mark in the early days.<\/p>\n<p>Depending on what sort of candidates you&rsquo;re targeting, you may also need to consider tech-driven solutions. Already, the job search has largely shifted from laptop to mobile, and the likes of <a href=\"https:\/\/www.heytempo.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Tempo<\/a> are trying to reinvent the recruitment process by using AI, video, and rich CVs that include ratings and reviews. All this has the potential to hugely streamline the recruitment process &ndash; Tempo boasts that its fastest hire was made in just 27 minutes.<\/p>\n<p>Further along in the process, the traditional supremacy of the interview is also under threat &ndash; with alternative and complementary solutions including soft skills assessments, job auditions, and even virtual reality.<\/p>\n<p>As a recruitment startup, keeping on top of these trends is key. While you may not have the established reputations and brand awareness of the big boys, you&rsquo;re ideally placed to innovate and operate more efficiently.<\/p>\n<h3>Expert insight &ndash; Malcolm Burenstam Linder, Alva Labs<\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-149397 aligncenter\" src=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-Malcolm-Burenstam-Linder.jpg\" alt=\"How to start a recruitment company - Malcolm Burenstam Linder\" width=\"709\" height=\"460\" srcset=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-Malcolm-Burenstam-Linder.jpg 709w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-Malcolm-Burenstam-Linder-480x311.jpg 480w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-Malcolm-Burenstam-Linder-640x415.jpg 640w\" sizes=\"(max-width: 709px) 100vw, 709px\"><\/p>\n<p>Groundbreaking recruitment startup <a href=\"https:\/\/www.alvalabs.io\/\" target=\"_blank\" rel=\"noopener\">Alva Labs<\/a> is taking aim at one of the central pillars of the common recruitment process &ndash; CVs. Instead it wants to use logic and personality tests to remove human bias from the hiring process and quickly find candidates that match the requirements of the role and the culture of the hiring company. This innovative approach has already earned Alva major clients like Arla and Deloitte, and co-founder and CEO Malcolm Burenstam Linder told Startups that the impetus for the company came from seeing traditional recruitment processes fail over and over again in his previous jobs:<\/p>\n<p>&ldquo;I previously worked for a flourishing private equity company and a rapidly growing ecommerce company, both of which had big problems with staff turnover &ndash; hiring managers were in a constant battle with the revolving door and staff weren&rsquo;t staying because they simply weren&rsquo;t the right people for the job.<\/p>\n<p>&ldquo;At both companies, I couldn&rsquo;t understand how we could be so dependent on data and analytics for almost every decision, but when it came to recruiting new team members, we were relying on gut feeling and personal preference. This is when the extent of the recruitment problem dawned on me.<\/p>\n<p>&ldquo;By failing to talk and think about talent in an objective manner, we let bias creep into the process and demolish our chances of hiring the best people.<\/p>\n<p>&ldquo;And by letting our own experiences drive our definition of what &lsquo;great&rsquo; looks like in a candidate, we directly stunted company growth.<\/p>\n<p>&ldquo;Eventually, I found myself waving goodbye to the stability of private equity to kickstart my own recruitment business, Alva Labs, with a vision of improving the quality, efficiency and inclusivity of the job market worldwide.&rdquo;<\/p>\n<hr>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column]<\/p><div class=\"jumplink-anchor-section\">\n <div class=\"jumplink-anchor-pointer\" id=\"link-recruitment-startup-costs\"><\/div>\n<\/div>\n[vc_column_text show_in_index=&rdquo;true&rdquo; title_index=&rdquo;Recruitment startup costs&rdquo; hash_url=&rdquo;&rdquo; title=&rdquo;Recruitment startup costs&rdquo;]\n<h2>Recruitment startup costs<\/h2>\n<p>There are only two things you <em>definitely<\/em> need to start a recruitment business &ndash; a phone and an internet connection. You can even use your personal mobile at the outset, although a dedicated business handset could cost you as little as &pound;6 a month &ndash; check out our guide to <a href=\"https:\/\/startups.co.uk\/mobiles\/best-business-mobile-phone-plans-contracts\/\" target=\"_blank\" rel=\"noopener noreferrer\">the best business mobile phone plans<\/a> for more info.<\/p>\n<p>However, to really spread your wings and fly, you&rsquo;ll want to invest in the following:<\/p>\n<p><strong>A website<\/strong><\/p>\n<p>If you&rsquo;re a recruitment agency, your website is really, <em>really <\/em>important &ndash; it&rsquo;s the public face of your business, and it&rsquo;s how candidates and companies will judge you.<\/p>\n<p>There are a huge range of options available, as detailed in our guide to <a href=\"https:\/\/startups.co.uk\/websites\/creating\/how-much-does-a-website-cost\/\" target=\"_blank\" rel=\"noopener noreferrer\">small business website costs<\/a>. If you want to take the DIY approach, companies like <a href=\"https:\/\/www.wix.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Wix<\/a> and <a href=\"https:\/\/www.squarespace.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Squarespace<\/a> offer packages for around &pound;10 a month, while a professional web design company should charge you around &pound;1,000.<\/p>\n<p>Make sure your site is set up for mobile &ndash; a recent report from recruitment platform Glassdoor found that <a href=\"https:\/\/www.glassdoor.com\/research\/mobile-job-search\/\" target=\"_blank\" rel=\"noopener noreferrer\">58% of Glassdoor users are looking for jobs on their mobiles<\/a>.<\/p>\n<p><strong>Software<\/strong><\/p>\n<p>You can find software that promises to help you with practically every aspect of your business, but two areas are really worth looking into for recruitment businesses &ndash; CRM software and accounting software.<\/p>\n<ul>\n<li><strong>CRM software<\/strong> &ndash; CRM stands for Customer Relationship Management, but as a recruiter, you should think of it as Candidate Relationship Management. Numerous pieces of bespoke software are available to help you easily keep track of who&rsquo;s applied for which job, and sort candidates according to skills and experience.<\/li>\n<li><strong>Accounting software<\/strong> &ndash; Not many people (apart from accountants) love the financial side of running a business &ndash; running payroll and putting together tax returns can quickly make you question the wisdom of getting set up on your own. However, while you&rsquo;re unlikely to be able to afford an accountant in the early days, investing in accounting software that lets you track expenses and payments could really pay dividends. You can make sure you stay on top of your finances, and don&rsquo;t have any sleepless nights when it comes to filling in your tax return.<\/li>\n<\/ul>\n<p><strong>Office space<\/strong><\/p>\n<p>You might start off in your bedroom, but sooner or later, you&rsquo;ll want to find a proper space where you can meet candidates and run your business. A co-working space is a great first step, getting you out of your living room but saving you the responsibility of single-handedly renting a space. You can find out more in our in-depth guide to the <a href=\"https:\/\/startups.co.uk\/premises\/offices\/how-much-does-coworking-cost\/\" target=\"_blank\" rel=\"noopener noreferrer\">costs of co-working<\/a>, but expect to pay anything between &pound;100 and &pound;600 a month in London depending on location and facilities. Outside the capital, prices fall dramatically &ndash; with a co-working space in Sheffield, for example, costing approximately &pound;200 a month.<\/p>\n<p>As a recruitment business, you shouldn&rsquo;t need much in the way of equipment. The days of fax machines are long gone, and contracts can be electronically signed using services like <a href=\"https:\/\/www.docusign.co.uk\/\" target=\"_blank\" rel=\"noopener noreferrer\">Docusign<\/a>. Make sure you have a good phone and internet connection, as well as a selection of private spaces where you can meet candidates.<\/p>\n<p>Location is also important: you&rsquo;ll want to ensure you&rsquo;re based somewhere that&rsquo;s easy for candidates to get to, and also consider whether there&rsquo;s a part of town which is a particular hub for the industry that you specialise in.<\/p>\n<p><strong>Insurance<\/strong><\/p>\n<p>There&rsquo;s no getting around this one &ndash; as soon as you employ your first member of staff, you&rsquo;ll need <a href=\"https:\/\/startups.co.uk\/insurance\/what-is-employers-liability-insurance\/\" target=\"_blank\" rel=\"noopener noreferrer\">employers&rsquo; liability insurance<\/a> that covers you for claims of up to &pound;5m. It&rsquo;s also a good idea to consider getting public liability insurance, which would cover you if anything happens to a candidate or client on your premises, while any vehicle used by the business must have a motor insurance policy in place.<\/p>\n<p><strong>Staff<\/strong><\/p>\n<p>Recruitment is commonly associated with two things &ndash; high salaries and high turnover.<\/p>\n<p>Let&rsquo;s tackle salaries first. While this is likely to be your biggest ongoing expense, it&rsquo;s a bit of a myth that recruiters are always on high salaries. Nationally, PayScale data indicates that the <a href=\"https:\/\/www.payscale.com\/research\/UK\/Job=Recruiter\/Salary\" target=\"_blank\" rel=\"noopener noreferrer\">average UK salary for a recruiter is &pound;26,443<\/a> &ndash; notably below the <a href=\"https:\/\/www.ons.gov.uk\/employmentandlabourmarket\/peopleinwork\/earningsandworkinghours\/bulletins\/annualsurveyofhoursandearnings\/2021\" target=\"_blank\" rel=\"noopener\">UK average of &pound;31,772 a year<\/a> (or &pound;611 a week).<\/p>\n<p>Of course, this masks significant regional variation, with LinkedIn Salary data indicating that the <a href=\"https:\/\/www.linkedin.com\/salary\/search?countryCode=gb&geoId=102257491&keywords=recruiter\" target=\"_blank\" rel=\"noopener\">average for a recruiter in London is &pound;35,000<\/a> &ndash; compared to &pound;27,500 in Manchester, &pound;29,500 in Sheffield, and &pound;29,500 in Leeds. And you&rsquo;ll likely need to also factor in commission, which averaged &pound;5,000 according to PayScale and &pound;10,000 according to LinkedIn.<\/p>\n<p>In terms of staff turnover\/staff churn, there&rsquo;s no doubt that this is an issue for recruitment businesses, with rates commonly cited that are double or even triple the national average of 15%. The common turnover factors still apply &ndash; make sure you&rsquo;re open to flexible working, and that salaries keep pace with the industry at large &ndash; but dealing with rejection is often cited as the most difficult part of working in recruitment.<\/p>\n<p>It might therefore be a good idea to ensure that a system is in place for employees that are struggling. For a startup, this could be as simple as an empathetic senior member of staff that can offer the benefit of their experience. As you grow, investing in dedicated mental health support could really pay dividends.<\/p>\n<p><strong>Marketing<\/strong><\/p>\n<p>With a recruitment business, awareness is key. You need everyone to know what you do, and how you go about it &ndash; which makes marketing <em>really<\/em> important. Consider targeted digital and social media marketing campaigns, as well posting on online job boards.<\/p>\n<p>While it can be difficult to know how much to spend, make sure you don&rsquo;t commit to a campaign before you know it will deliver a solid ROI. Start small, and then scale up if you see positive results.<\/p>\n<p><strong>Project management software<\/strong><\/p>\n<p>With so many things to juggle, using project management software can make a huge difference to your recruitment business. Easily keep track of everything that needs to be done, and instantly see which tasks are overdue. Some programs can even automate processes completely to significantly improve efficiency.<\/p>\n<hr>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column]<\/p><div class=\"jumplink-anchor-section\">\n <div class=\"jumplink-anchor-pointer\" id=\"link-financing-your-recruitment-business\"><\/div>\n<\/div>\n[vc_column_text show_in_index=&rdquo;true&rdquo; title_index=&rdquo;Financing your recruitment business&rdquo; hash_url=&rdquo;&rdquo; title=&rdquo;Financing your recruitment business&rdquo;]\n<h2>Financing your recruitment business<\/h2>\n<p>Given the myriad costs discussed above, making sure you can finance your recruitment business should be one of your first priorities. Given the delay between outlay and financial return, cash flow is a common issue for recruitment agencies.<\/p>\n<p>Alongside trying to secure investment or a business loan, make sure you consider invoice factoring. This is common in recruitment, and is a great way to manage a temporary shortfall &ndash; find out more in our <a href=\"https:\/\/startups.co.uk\/funding\/invoice-finance\/invoice-factoring-costs\/\" target=\"_blank\" rel=\"noopener noreferrer\">guide to invoice factoring fees<\/a>.<\/p>\n<p>Two finance providers that specialise in the recruitment industry are Sonovate and Quba Solutions.<\/p>\n<p><a href=\"https:\/\/www.sonovate.com\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Sonovate<\/strong><\/a><\/p>\n<p>Sonovate specialises in invoice finance, allowing businesses to borrow against their outstanding invoices in order to free up cash and pay their contractors on time. It has already funded over &pound;500m in invoices to date.<\/p>\n<p><a href=\"https:\/\/www.quba.solutions\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Quba Solutions<\/strong><\/a><\/p>\n<p>Quba Solutions is a contract finance provider that offers finance and back office services to recruitment firms. Its packages allow you to easily generate invoices, chase payments, and ensure that your cash flow remains positive.<\/p>\n<h3>Expert insight: Gary Ashworth<\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-149440 aligncenter\" src=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-Gary-Ashworth.jpg\" alt=\"How to start a recruitment company - Gary Ashworth\" width=\"709\" height=\"460\" srcset=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-Gary-Ashworth.jpg 709w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-Gary-Ashworth-480x311.jpg 480w, https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/How-to-start-a-recruitment-company-Gary-Ashworth-640x415.jpg 640w\" sizes=\"(max-width: 709px) 100vw, 709px\"><\/p>\n<p>Recruitment veteran <a href=\"https:\/\/www.garyashworth.com\/\" target=\"_blank\" rel=\"noopener\">Gary Ashworth<\/a> has over 40 years experience in the industry, founded his first recruitment company when he was just 21, and is currently chairman of three different recruitment companies. Speaking to Startups, he stressed the importance of having a coherent financial plan in place:<\/p>\n<p>&ldquo;If you want to take advantage of running contract or temporary staff as well as charging a fee for making them permanent, then you&rsquo;ll have to have a line of credit in place to cover their wages, since you might not get paid for 30-60 days or longer.<\/p>\n<p>&ldquo;You&rsquo;ll also need a more sophisticated back office to process all of the transactions and that will come at a cost.<\/p>\n<p>&ldquo;It&rsquo;s absolutely crucial you get the numbers right &ndash; <strong>you should be turning 20% of your net fee income into profit<\/strong>.<\/p>\n<p>&ldquo;If you&rsquo;re not doing that, then you&rsquo;re either paying your staff too much or your establishment costs are too high. You don&rsquo;t want to be a busy fool who works hard but barely makes a profit!&rdquo;<\/p>\n<hr>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column]<\/p><div class=\"jumplink-anchor-section\">\n <div class=\"jumplink-anchor-pointer\" id=\"link-recruitment-laws-and-regulations\"><\/div>\n<\/div>\n[vc_column_text show_in_index=&rdquo;true&rdquo; title_index=&rdquo;Recruitment laws and regulations&rdquo; title=&rdquo;Recruitment laws and regulations&rdquo;]\n<h2>Recruitment laws and regulations<\/h2>\n<p>The main piece of legislation that covers the recruitment industry is the <a href=\"http:\/\/www.legislation.gov.uk\/ukpga\/1973\/35\" target=\"_blank\" rel=\"noopener noreferrer\">Employment Agencies Act 1973<\/a>. If you want to set up a recruitment business, you&rsquo;ll need to make sure you know this legislation inside out. The REC has a helpful guide, and this infographic nicely summarises the main points.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-125537\" src=\"https:\/\/images.startups.co.uk\/wp-content\/uploads\/2008\/09\/13104027\/Employment-Legislation.png\" alt=\"Employment Legislation\" width=\"640\" height=\"426\"><\/p>\n<p>Source: <a href=\"https:\/\/www.agencycentral.co.uk\/recruitment-spotlight\/law-for-recruiters\/\" target=\"_blank\" rel=\"noopener noreferrer\">Agency Central<\/a><\/p>\n<p>Alongside members and key figures from the world of recruitment, the REC has also created the REC Code of Professional Practice, which aims to promote consistent standards across the industry. This covers the following 10 areas:<\/p>\n<ul>\n<li>Respect for Laws<\/li>\n<li>Respect for honesty and transparency<\/li>\n<li>Respect for work relationships<\/li>\n<li>Respect for diversity<\/li>\n<li>Respect for safety<\/li>\n<li>Respect for professional knowledge<\/li>\n<li>Respect for certainty of engagement (ensuring that workers are fully informed of the pay and working conditions for the role they are being employed in)<\/li>\n<li>Respect for prompt and accurate payment<\/li>\n<li>Respect for ethical international recruitment<\/li>\n<li>Respect for confidentiality and privacy<\/li>\n<\/ul>\n<hr>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column]<\/p><div class=\"jumplink-anchor-section\">\n <div class=\"jumplink-anchor-pointer\" id=\"link-final-thoughts\"><\/div>\n<\/div>\n[vc_column_text show_in_index=&rdquo;true&rdquo; title_index=&rdquo;Final thoughts&rdquo; title=&rdquo;Final thoughts&rdquo;]\n<h2>Final thoughts<\/h2>\n<p>As is the case with any business, starting a recruitment agency is not for the faint hearted &ndash; but following the steps laid out above should ensure you avoid some common pitfalls.<\/p>\n<p>Starting off with a good business plan is crucial &ndash; one that makes it clear what your business strategy is, has detailed cash flow forecasts, and demonstrates your in-depth knowledge of your target market. If you&rsquo;re starting out with no recruitment experience, then taking on an employment franchise could be a great option &ndash; and regardless of whether you&rsquo;re franchising or going it alone, choosing the right pricing structure is key.<\/p>\n<p>The UK recruitment industry is already a crowded market. Finding your niche is extremely important, as is having an innovative mindset that&rsquo;s open and ready to implement new recruitment solutions.<\/p>\n<p>With initial costs likely to include a website and marketing, and later steps on the ladder entailing expenses like office space and CRM systems, having the right finance in place should be a cornerstone of your business strategy. Finally, make sure you have an in-depth knowledge of the UK&rsquo;s employment agency legislation to ensure you&rsquo;re operating legally.<\/p>\n<p>Good luck![\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column] <\/p><div class=\"flexi-comp-lw\">\n <div class=\"flexi-comp-lw-text\">\n <p>Startups.co.uk is reader-supported. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps Startups.co.uk to provide free reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews.<\/p>\n <\/div>\n <\/div>\n[\/vc_column][\/vc_row]\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text title_type=&rdquo;h1&Prime;]Today&rsquo;s recruitment companies are very busy. Post-COVID, the so-called &lsquo;great resignation&rsquo; has taken place, with employees up and down the country searching for better jobs made available thanks to the advent of remote working. Companies are now grappling with a cross-sector labour shortage, while immigration issues caused by Brexit have only aggravated the situation. [&hellip;]<\/p>\n","protected":false},"author":91464,"featured_media":125517,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2999],"tags":[],"acf":[],"yoast_head":"\n<title>How to start a recruitment business | A guide | Startups.co.uk<\/title>\n<meta name=\"description\" content=\"The recruitment sector is booming. Discover how to get involved, with expert advice on business models, regulation, and your recruitment business plan.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/startups.co.uk\/guides\/how-to-start-a-recruitment-business\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to start a recruitment business | A guide | Startups.co.uk\" \/>\n<meta property=\"og:description\" content=\"The recruitment sector is booming. 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