Starting a recruitment agency

Hi folks, considering starting a recruitment agency focussing on Information Technology.

I have been in the industry for 20+ years and looking to exit corporate world.

I have also been very frustrated at the lack of customer service from candidate side (ie- no return phone calls/emails).

Understand it's not easy however barriers of entry are low and one could begin fairly small before scaling.

Interested to hear others thoughts here ?

 

Few things to consider, this is the opposite of “exiting the corporate world”... you’ll be servicing corporates as clients, you’ll need to attend/sponsor/organise corporate networking events and all the people you’re dealing with work in corporates!

Barriers of entry are low if you’re only doing permanent recruitment, if you’re also going to payroll temps you’ll need a fair chunk of cash to be able to keep a float.

Candidates will be paid weekly/fortnightly and you’ll be paid by your clients monthly (if you’re lucky.

Are you coming from a recruitment background or IT?

If you’re not from a recruitment background I’d suggest working for someone else first, the amount of people that join the industry and drop out in the first year is very high - basically because they don’t like the day to day work.

The other point you mention about candidates not getting called back (if you’ve been a candidate) is everyone (in theory) should want to provide great customer service to job seekers but the clients (companies hiring) are the only ones paying for the service. So in an industry that’s a high volume numbers game the clients must be given priority.

Hopefully this helps, happy to provide any further info if you need.

 

Thanks Ben_j.

I have no recruitment experience ... only IT.

No excuses for not returning calls. A simple 1 line generic email which rarely happens is all you need.

Primary goal is not having to work for a paycheck each month. I am seeking to build something for myself / family that can scale or grow depending on what you are willing to put in.

I notice a lot of junior people in the industry doing the admin side ... perhaps hiring someone who can help me get up to speed may work.

Cash flow not an issue in early stages ...

 

Low barriers to entry, low startup cost, very little risk at all really. Good business model & potentially highly profitable.

The main thing is that you're going to need to have a very strong existing network of both employers and candidates in your industry - there are heaps of recruiters so being able to secure the work is going to be the challenge.

A technical IT background will help, but you're going to need strong selling skills. That'll be what you'll spend most of your time on, selling yourself to clients or selling roles to candidates.

 

Where are you going to source clients from?
This will involve cold calling. Working thru various ASX listed and private companies (no idea yet on best strategy) but phone / followed up with face to face meetings when someone shows interest.

How will you engage with candidates?
Am thinking about building a large talent pool base via primarily LinkedIn. Everyone seems to be there.

What will be your USP?
IT recruitment by experienced IT people NOT sales people with no IT qualifications. I am yet to find any agency offering this.

Appreciate any further input / thoughts / ideas ...

 

Having worked in (real estate) agency, the systems are your expensive part of your setup. How are you going to operate? Being on Domain.com.au/Realestate.com.au is a huge monthly expense, don't think that access to the jobs portals come any cheaper. Good CRM systems will also cost $$. Website - this is your marketing tool, not your recruitment tool.

The days of operating with a phone, teledex and notebook are long gone.

As others have suggested, cut your teeth with an IT recruiter, see how they work and whether you can crack it when getting paid commission only.

 

The key to this business is selling. You can be the best recruiter in the world but if you cant sign up employers you wont get anywhere. If you dont like selling then you may be in the wrong business

 

Having spoken to recruiters and growing to understand what they do, its not an easy job. You are essentially herding cats all day and building relationships with many people in hopes that everything lines up.

Not an easy gig

 

no offecnce, but no experince in recruitment, no experience in selling, no business experience, looking to exit corporate world

shows that you dont understand the business, risks, how the industry works,

sure, you might be good at it, but being good is not a guarantee of success either

never ceases to amaze me the number of people that consider this becase, they are bored, want more money, and work less hours
the reality couldnt be further from the truth

 

One option is to go work for a leading recruitment agency that specialises in your IT field. They will pay you, train you and it may open big doors to major players and then you may then develop the skills to go start your own in a stronger position. They often look for people with industry knowledge cause you can talk the same language and issues with the client. I have a relative in merchant banking recruitment who started that way.

Many firms pay on performance or a % share basis.

 

Recruitment agency s are ruining the Australian workforce in many ways. Cant stand them.

There should be laws against them being not able to operate.

 

I have been in the recruitment industry for 12 years but from the side of IT and systems development.
I also have a bunch of friends in recruitment with some that have gone on to be extremely successful.

The key to starting a business in this area is contacts. If you are saying that you have no recruitment experience with no contacts then sorry to be blunt but what on earth are you offering both clients and candidates??
I get that you understand IT but TBH our best IT Recuiters actually know very little about IT! Haha
The amount of time they come ask my team about a system...
It’s a selling and BD business, not s technical business.

As for the no contact that’s just normal.
On any given IT Role we might have 500 applications come in. It’s simply not feasible to contact all these people. We have systems in place to ensure they are all notified of being unsuccessful but the way in which this is done depends on how far they have progressed.
If your thinking you can change this and that every application gets a call then I’m sorry to say your business model is doomed from the start.
It’s not a 1 minutes phone call. It’s a 10 minute phone call because candidates will want answers, ask questions, ask about other roles. At best you might get away with 5 minutes per candidate.

Now let’s say your doing a help desk non specialist role and have 500 applications. That is 41 hours of phone calls for 1 JOB!!!
That’s not even completing the rest of the process to actually place the candidate.

 

Thank you all for the great feedback !

Key takeaways -

1. Yes - having your own business is not easy. I get this !
2. I have a number of contacts and realise it will take time to build even more contacts. Surely all agencies did not start with all contacts !
3. It's a selling , BDM and numbers game.

If it was easy everyone would do it !