There’s more to a recruitment agency than a few phone calls and LinkedIn searches. It’s a complex business that requires effort, manpower, continuous input, and a clear business plan. It remains one of the better projects one could launch, as recruitment agencies are highly driven entities with a focus on satisfying clients.
There are niches within the industry itself that allow an agency to choose its own path, the roles they cater to, and the clients they work with. In order to properly set up a recruitment agency, there are a few steps to take ahead of phoning up candidates and companies in open recruitment.
1 – Explore your niche options
Though it might be a bit difficult to visualize, the recruitment agency world can be split into different niches, mainly separated by markets and locations. This allows recruiters to specialize in a particular set of roles, a specific industry, or an area of their choice.
This niche approach benefits all parties involved. Companies are able to hire professionals who know their needs firsthand, who are able to identify qualified talent and successfully bring it onboard. Candidates are given a better opportunity, an improved and more direct channel of conversation that would otherwise be overlooked in a non-niche approach.
Your recruitment agency could cater strictly to Tech and IT roles, or perhaps you know more about the retail world and what it demands from a candidate. The point remains that you should choose the niche you find most compelling, the industry that you know, understand and excel in. Choose your market wisely, as this will translate to success down the line. Success in any talent market is driven purely by how well you and your team understand the roles themselves, and their value to each and every type of organization.
2- Conduct competitor research
Once you know which market you want to tackle, it’s time to assess the players dominating the field. Assessing your competitors will give you a “square one” to start from. It will give you a good idea of the prerequisites for success in that niche and/or location.
Furthermore, it will inspire you to better define the recruitment agency that you want to build. This includes branding, team building, marketing strategy, and even global reach. Studying your competitors and where they stand is about understanding the limits of what you’re trying to build, of how far everyone else has gotten and where they failed.
By understanding your competitors’ successes and failures, you’ll be able to strategize accordingly and dodge most of the pitfalls that brought them down. It will help you shape your offer and your marketing to extend your reach beyond their own. Remember the simple SWOT (strengths, weaknesses, opportunities, threats) and 4 Ps (product, place, price, promotion.) This is the information you want to have while you’re still at the planning board.
3- Determine your finances
This step is the most dreaded of starting a recruitment agency or any company for that fact, but of course, setting up your finances begins with your most immediate expenses. You’re about to become a company, and that calls for office equipment, all the tech toys your team wants, the software that you will undoubtedly need, insurance, healthcare, and whatever legal costs will be incurred.
Securing funding or at least being aware of the vague amount that your finances will eventually require is a good place to start. A smart approach would be to carefully begin budgeting for the agency’s different needs, and seek the help of financial advisors if necessary.
4- Explore laws and regulations
There are laws and regulations that you should be aware of before opening your business’ doors.
First, your priority should be to research any applicable laws and regulations on a national level. It’s good to understand the local landscape and requirements, this will allow you to breeze through the initial setup unscathed. Furthermore, some countries may have specific rules and laws that other countries do not. Being aware of these differences will help you avoid trouble down the line.
Beyond that, it would be good to explore the laws and regulations that address recruitment agencies on a global level. For example, understanding and adhering to the GDPR and PDPA data privacy regulations is an expectation that all hiring firms need to meet.
5- Establish your marketing strategy
Your marketing begins with your recruitment agency’s identity. Creating your brand is extremely important, as the choice you make here will set the world’s initial perception of who you are. Start with your logo, your colors, and the brand’s intricate details. Once that’s done, it’s time to put together your marketing strategy.
The initial touches for your marketing strategy don’t have to be set in stone. In fact, this step allows you to experiment with different tools (graphic design, content management, website building) and channels, figure out which platforms yield the best results, and slowly begin to identify/build a network for your client base.
Alongside the marketing strategy, you can begin to outline your internal processes and match each function with the right tool. The most basic of these are better outlined early on.
6- Set up business goals
Success for any agency depends greatly on its business goals.
Sure, building a database of candidates and reaching out to clients play a big role, but the talent market is ever-shifting, and depending solely on these two elements can lead to disaster. A successful recruitment agency has set business goals, a well thought out strategy, and a comprehensive but flexible business model.
Experiment with short and long-term goals, set milestones for your desired growth and give your employees a challenge to meet. This can be in the form of individual KPIs and company-wide growth.
7- Tech tools
If you want to get ahead in an industry like recruitment, you need to acknowledge that you can’t do it on your own, and certainly without the multitude of tech tools that can just as well catapult you ahead of the competition.
Remember that recruitment is busy work, and that data analysis plays a significant part in it. If you want to manage a team of recruiters and sign multiple clients at once, then it’s highly recommended to adopt applicant tracking systems and recruiting software to make the work easier.
The ATS market is different these days, and you want a solution that allows you to do more, recruit faster, manage data better, and explore new depths. You want a comprehensive SaaS that allows you to aggregate all of your hiring channels into one platform, one that incorporates social media such as LinkedIn into your strategy, and that recommends candidates through powerful AI engines.
8- Invest in people
Invest in people. This is worded specifically in this manner because you’re not investing in manpower, you’re not investing in seat warmers, you’re investing in people, and recruiters need a specific set of skills, a mastery of human interaction that allows them to relate to the candidate.
Of course, it’s vital to recruit individuals you believe have the experience and drive to excel, but beyond that, it’s important to view your workforce as more than just a workforce. This will lay the groundwork for your company’s culture and begin to shape the relationship between management and employees.
Give the more junior applicants a chance, strive to train and develop your workforce by identifying their strengths and weaknesses, and tailoring the training to each.
9- Analyze the pandemic’s effects
It’s important to understand how the pandemic has affected the talent markets and the different niches. It’s an unexpected crisis, and the shift in the industry seemed to sway heavily in the digital and tech world’s favor.
Understanding these changes can help you better choose which talent market you would like to tackle. The availability of talent and the demand for it, are strong business factors that can change your strategy.
These are the basics you have to deal with first. Once you’ve established the points above, it’s time to start your very own recruitment agency. Click here to explore our 14-day free trial.