Skip to main content
Recrutiment & Employment Confederation

How to start a recruitment agency in a post COVID-19 world

Business advice

Greeshma Suresh avatar

Written by Greeshma Suresh Marketing manager

We aren’t there yet, but the horizon isn’t far away, and when we get there, you want to be in your best position to grab the opportunities that come your way.

It's no secret that COVID-19 left some voids in our industry, but it also opened opportunities to businesses in sectors such as health & social care and blue collar.

Recruiters have a crucial role now in supporting the responding industries and will have an equally critical role in helping to rebuild the economy when the coronavirus crisis is over.

Do you see where we are going with this? Set yourself up for success now by ensuring you have the right resources and knowledge. If starting your own recruitment business is on your agenda, it's time to get started now.

REC is now offering a 25% on all Start-up courses which will be delivered online.

If you're new to the world of work, inexperienced in the labour market or making a transition from one sector to the recruitment space, let us give you a brief glimpse of the ten things you need to put in place to get started:

1. Find your niche

Ask yourself these questions, what’s my unique value proposition? How can I stand out from the *31,140 recruitment enterprises operating across the UK?

Consider the following factors when you design your unique service:

  • Job seniority and functions (executives, managers, office professionals, etc.)
  • Types of placement (permanent, temporary, fixed-term contract, etc.)
  • Sector or industry (where is the most demand for skills now?)
  • Location and region (local staff demand and supply etc.

Use the REC's jobs market data and research to help you decide which direction to travel.

2. Plan and set realistic goals

Develop a clear plan that is simple and realistic. Set SMART goals but be prepared to be agile and adapt to market changes. As part of our Start-up course, you will learn how to develop a clear and realistic business plan, shaped from tried and tested methods.

3. Develop a sustainable business model

Are you going to set up a traditional high street model or low-cost online start-up?

Whatever model you chose, you need to have a clear and transparent pricing structure that considers your business running costs. The two most common structures are flat rate fee and commission fee, which is based on a percentage of the candidate's salary.

4. Source funds to get started

Cash flow was the biggest challenge business owners reported during this COVID-19 crisis. While some businesses are at an advantage due to the steady demand for labour, many others didn't have that luxury. Furloughing did offer some relief but before it took effect, we saw many businesses make redundancies as a cost-cutting measure.

When sourcing funds for your new recruitment business, think long-term.

Any loans or investment needs to be legally documented and all parties made aware of risks. It may help to use invoice discounting from one of the main banks to help with your cash flow, especially if you are recruiting temps, contractors or interim hires.

Financial advice from a qualified financial professional would also be a wise step. As part of our Start-up course, you will learn about financial matters and receive a free guide to financial outsourcing.

5. Develop a future-fit marketing plan

When remote working became the new norm, people turned to full-time reliance on technology - this means more time spent on social media, defaulting to online collaboration tools to communicate with teams, more google searches, constantly on the lookout for latest updates and guidance from authorities. Content dominated the digital world and people were consuming them at an accelerated rate.

Your marketing strategy needs to be research-led, agile, and future-fit to ensure your thought-leadership isn't lost in a busy and noisy marketplace. The six key areas of marketing you need to have in your strategy are:

  • Public relations
  • Advertising
  • Digital marketing
  • Direct marketing
  • Sales promotion
  • Face-to-face selling

6. Your office - physical or virtual?

The COVID-19 crisis introduced us to the notion of remote working, and we saw businesses across the world shape new ways of working to sustain productivity and business performance. If anything, COVID-19 taught us that a physical office isn't always a necessity to carry on trading.

Having said that, some may prefer a separate working space to keep them motivated. If you have a team working for you, having a physical office is highly recommended to have client or candidate meetings. Consider costs, ease of access to your clients and your brand in mind when choosing your office location.

7. What technology do you need?

Having the right tech and tools is no longer a nice-to-have for new businesses. The market has moved on from basic technology to purpose-built tools that offer the best user experience, analytics and fosters efficiency. A new business must have the following in place to set your own footprint in the crowded market space:

  • A user-friendly website
  • A Candidate Relationship Management (CRM) system
  • Payroll services
  • Front and back office support software
  • Cybersecurity solutions
  • Social media presence

8. Insuring your business

Even a regulated business can find itself faced with the worry and potential expense of a tribunal case, tax enquiry or legal dispute. There are many providers who cater to recruitment start-ups, and we recommend doing a thorough research when finding your partner. Here's a guide on insuring your recruitment business the right way.

9. Recruitment legislation

If you’re under the false impression that recruitment isn’t a regulated industry, you need to check your sources. 

We distilled the key things you need to know about UK recruitment industry regulation into this factsheet, to help explain the various legislations, and to show how these regulations are enforced.

To add to this, in April 2020, a new legislation, the Good Work Plan, came into effect, with its fair share of compliance requirements for recruitment business owners. 

But not to worry, one of the days of our Start-up course is dedicated solely on  guiding you through the legal aspects of recruitment.

10.  Demonstrate your commitment to professional standards

As the largest professional body for the UK recruitment industry, representing more than 3,300 recruitment businesses and 10,500 recruitment professionals, the REC sets the standard and champions good recruitment.

Passing the REC Compliance Test will demonstrate your adherence to REC's Code of Professional Practice, and will give you the mark of quality which tells your clients that you strive to deliver the right people every time, and have an unmatched level of professionalism.

*Recruitment industry trends 2018/2019

Start-up your own recruitment agency

Our two-day Start-up course provides everything you need to set up a viable recruitment business. You’ll learn how to prepare business plans, define your terms of business and build finance, sales, and marketing platforms. Due to COVID-19, we are offering a 25% discount on course fees. Sign up to our next training course here.