We at TBOS are called multiple times every week by someone who wants to start up their own recruitment agency with no experience working in an existing agency or as a recruitment consultant.
We’ve heard a lot of different reasons over the years for this decision from various people, but we often find after a few quick questions that they don’t yet know enough.
As our service offerings don’t include teaching the whole recruitment process to beginners, we’ve almost always had to recommend that they begin by building up experience working with someone else if they truly wish to be a recruiter.
It’s very common for these people to have been contractors who distrust their current agency, feeling that it’s overcharging its clients while underpaying its contractors. Others might know a “friend” in recruitment making “big money just sitting on the phone all day,” which always inspires competition.
In almost all cases, these people aren’t ready to face up to one, two, or even all six of the following reasons not to start an agency with no experience.
Recruitment is Not as Easy as it Looks
If it was as easy to make “big money” as these callers believe in recruitment, there’d be no unemployment and recruitment agencies would be the biggest employment sector in the UK.
Making placements involves balancing clients and contractors’ needs and having the knack for matching contractor to client successfully. Even then, you need to find new placements, new clients and new candidates on a daily basis, calling some, emailing others and constantly trawling CVs.
Hiring Staff Internally Isn’t the Same as Recruiting
Non-recruiters sometimes believe that placing the job advert, sifting through the CVs sent in, then carrying out interviews on your shortlist is all a recruiter needs to do, missing that they had the client handed to them before they looked for the rest.
Building client relationships, developing an understanding of how each client handles placements, building CV lists, and managing the interview process is already more than an internal recruiter does – but the biggest part of an agency’s job, negotiating payment details with both sides, isn’t even on that list. It’s a whole extra skill to master before your agency is stable.
Starting Any New Business Is Tough
Talk to any new business owner; it’s a challenge even if you know the industry you’re working in inside out. When we speak with experienced recruiters looking to start an agency, they know ahead of time that it could be three to six months before they reach a break-even point with enough placements to cover costs; having to learn and develop contacts as you go makes for a much longer process, and one that’s easily long enough to cause trouble.
How Do You Convince the Client?
At minimum you need a client and a contractor to make a placement, and clients looking for a reliable contractor have to put their trust in the reputation of the agency or the individual recruiter. When you have no reputation in the industry and may have no starting client relationship, it’s hard to convince them that you’re the best person to handle their placements. Reputations in other industries can even work against you; you can be seen as ‘a salesman’, not a recruiter.
Your Bank Will Look for Industry Experience
It’s rare to find a bank which will set up a business bank account without checking the directors’ previous history; they’re keen to avoid risk to the bank in case lending is involved (and contract placements almost always require invoice finance like that offered by TBOS Freedom.)
A lack of experience could cut you off from the services your agency most desperately needs.
Are You Ready for The Cost of Getting it Wrong?
Ask any recruiter; if you make a mistake making your placement it’s possible for the client to get their candidate without paying you – and if you don’t have experience in the industry, there’s a much greater risk of that.
Knowing your contracts, getting them right and getting them signed correctly is a key step in getting paid for your hard work.
Over the years, we’ve helped a number of non-recruiters to set up an agency and watched as they struggle to adapt to the industry alongside struggling with the creation of their business. We’re always pleased when one makes it despite this twin handicap and we give all our prospective clients the same time, help and advice – after all, if there’s a foolproof way to identify successful agencies before they start, nobody’s found it yet.
If you want to know more about how we can help you visit our site, look through our blog, or call us on 0845 8811 112.
