5 things every new recruitment agency should know

Starting a new recruitment agency can be both an exciting chapter and challenging venture.

Whether you're an industry veteran branching out on your own or a new entrepreneur jumping into the world of recruitment, there are a few areas specifically that can set your agency on the path to success.

In this blog post, we will explore five things every new recruitment agency should know.

Be realistic when setting your prices
However, your goal shouldn't just be about undercutting competitors. Undercutting competitors by offering lower prices can be a risky strategy that may lead to a race to the bottom, ultimately devaluing your services and killing your profit margins. Conduct thorough market research to understand the pricing landscape and identify your unique selling point. This allows you to price your offerings in a way that highlights their benefits, ensuring you attract customers who appreciate quality and value, rather than seeking the lowest price.

Budgeting and cash control
Managing your finances and ensuring adequate cash flow is vital. Losing track of what money is going out and what’s coming in can leave you with gaps in your cash flow and if you want to retain your bank of dedicated candidates, you need to efficiently manage your funds to ensure wages are paid on time and any issues, promptly dealt with.

All outgoings should be recorded via a budget, including:

• Tax liabilities
• Business overheads i.e. Building/office rent, bills
• General business expenses i.e. supplies, marketing, equipment, office phones
• 3rd party tools i.e. back office or payroll software/service

As all temporary recruitment agencies will know, cash flow is a critical thing to get right. It’s important to think about having to pay your temporary workforce before you have even received any invoice payments from your clients. For many, factoring is often an option, especially for start-up agencies on a budget.

Discover what is stopping you from starting your own recruitment business

Top notch contracts
To avoid conflicts, make sure your contracts clearly outline your services, responsibilities, fees, and payment terms. Avoid using generic internet samples as a template for your contracts, as these templates may not fully address your particular needs, legal requirements, or the specific details of your agreement, potentially leading to misunderstandings or legal vulnerabilities down the line.

Using the right systems
One common challenge you can face is handling a rapidly increasing number of clients. Utilising cloud-based recruitment software solutions, such as our platform, can assist in effectively managing a temporary recruitment agency. The right software helps streamline administrative tasks like managing bookings, timesheets, invoicing, and compliance. Compliance management is crucial due to frequent changes in regulations concerning temporary workforces. By adopting such a solution you can save time and resources that would otherwise be spent on maintaining booking systems and admin.

Your little black book!
Arguably the most important thing needed to start up a temporary recruitment agency is a list of contacts. Having both client and candidate contacts is going to be crucial in your first twelve months but also something you need to invest in if you want your business to grow. Having a recruitment software system which can easily manage and store contacts will be a must as rifling through reams of paper-based documents could cost you money, as well as time.

We can support you from the off at Flo, with software and all the services needed to help you launch your own recruitment business. Contact us on 01827 438065 or send us a message here.