How to Start a Recruitment Agency [Ultimate Guide]

If you are in the recruitment business, we are sure that you have thought about starting a recruitment agency at some point. Being your own boss is great but starting and running your own business is not easy. 

A recruitment agency is a complex business that requires a lot of effort, manpower, clear goals, and a business plan to lead you to that goal. Recruitment agencies are great because they are highly driven and focused on client satisfaction.

Running a recruitment agency will allow you to choose your own path, goals, and clients. To properly start a recruitment agency, you need to take a few necessary steps before you start phoning up candidates. In this post, we will show exactly how to start a recruitment agency.

Know what you are getting into

Running your own recruitment agency is not the same as your typical 9-5. Because many of your candidates are already employed, you should expect to be working in the evenings if you want to make it. 

That is why it is crucial to start using a recruitment platform to help you out. Make sure that the platform can be used on the go unless you want to spend your evenings in the office.

As you start your own recruitment business, you need to familiarize yourself with many laws governing the recruitment industry. The legislations differ between countries and sometimes even industries, which means that you need to set aside considerable time to do your research and learn the ins and outs of your local employment legislation.

The step-by-step guide on how to start a recruitment agency


Now that you have familiarized yourself with the most important things before starting a recruitment agency, you are now ready to start learning how to start a recruitment agency. 

Step 1: Determine your niche.

The first thing you need to do when you seriously consider starting a recruitment agency is determining which type of recruitment agency you want to be. You could be a tech/focused agency or you could focus on staffing other kinds of companies, such as retailers.

You can also examine your current network and see where your strengths are, and choose a market to provide your recruitment services. Another thing you should consider when picking your niche is to consider which type of candidates you have the most substantial connection with.

Do you feel more connected to recent graduates or those in the business for some time now?

These answers to these questions will help you better position your business.

Step 2: Assess your competitors.

The second step in how to start a recruitment agency process is to assess the current market and see what other staffing agencies you are competing with. 

You can do a few simple analysis such as SWOT (strengths, weaknesses, opportunities, threats) and 4Ps (product, place, price, promotion) to see how you stack up against your competitors and what you need to do to improve your game.

Step 3: Plan out your finances.

Contrary to popular belief, starting a recruitment agency does not require as much money as some other business ventures. However, that does not mean that you should not set aside some cash. You should still consider costs for your rent, office equipment, staff, digital tools, etc.

It’s crucial to include budget allocations for contract recruiters and temp recruiters, ensuring financial readiness for varied hiring needs.

You should create a spreadsheet with your projected budget to see how much everything will cost you. You should also consider getting proper financial advice.

Helpful resources:

The cost of hiring employees

How to reduce recruitment costs

Understand the costs of staffing agency


Step 4: Build a marketing strategy.

marketing strategy

Every company needs marketing to be successful, there is no doubt about it. The same applies to your recruitment business, which is why you need to think early about how you want to market your business. To do that, you need to create a brand that will meet your agency’s style. First impressions are vital, which is why you need to ensure that yours is good. 

Once you have set up the look, you need to start crafting a marketing strategy. How do you plan to reach prospective consumers and turn them into customers of the recruitment services you plan on providing. 

A marketing strategy should contain the company’s value proposition, brand messaging, target customer demographics, and other high-level elements. 

Your marketing strategy should cover big-picture messaging.

Step 5: Set up your business goals. 

business goals

In addition to your marketing strategy, you also need to set your business goals. A successful recruitment agency should count on clear business goals, in addition to their experience and their candidates. We suggest that you set up a business model that is both flexible and comprehensive. 

This includes setting up both short term and long term goals that will help lead you and your employees towards your goals. 

For example, you can aim to increase the number of your stable clients by 20% in the next three months. That would be a short term goal. A long term goal would be to expand the areas you serve in the next six months.

Step 6: Invest in your people.

invest in people

If you want your recruitment business to succeed, you need to hire good recruiters and invest in them. However, you should also hire junior recruiters that show potential. Spot each of your recruiter’s strengths and weaknesses and do what you can to help them thrive, as that will also be valuable for your business.

Step 7: Invest in your technology.

augmented reality

These days, starting a recruitment agency also requires you to be familiar with technology, as, like almost any other industry, recruitment agencies are enormously affected by technology. 

Adopting a human resource information system (HRIS), utilizing applicant tracking systems (ATS), and implementing virtual assessment centers are indispensable for modernizing our recruitment practices.

Exploring people aggregators and employing data-driven recruitment tools are strategic moves to streamline our processes and enhance our operational efficiency.

For you, that means that you need to invest in the right tools as that will help you save both time and money. One of the most popular tools for recruiters is Recruiteze. Recruiteze is a recruitment agency software that can help automate your entire hiring process. 

Recruiteze is integrated with top recruitment portals, it has a centralized database, a dashboard that is designed to highlight your results, and much more. With Recruiteze, you can easily find the perfect candidates for your clients. 

Here are some articles which will help you choose the right recruitment agency software:

  1. What to look for in a recruitment agency software?
  2. Online vs On-Premise recruitment agency software
  3. What is an applicant tracking system?

Expert tips about how to start a recruitment agency


Now that you know how to start a recruitment agency, here is what experts recommend that you do.

Give your time and expertise openly


The best recruiters out there are the best because they are constantly developing industry expertise and they share their knowledge openly and freely with their clients. Any hiring manager and company owner need experts they can call to help them with the latest salary rates or the availability of resources. 

If you want your recruitment business to succeed, be that person for your clients. Have them turn on to you and the benefits will for sure follow.

Relationships are essential in recruitment


In any business, providing your client with excellent service is what keeps them afloat. The same applies to recruitment. To provide your clients with excellent requirement service, you need to get to know them and their needs and wishes personally. 

Take them to lunch, call them, share important info with them whenever you can. This may sound obvious to some of you, but building relationships is slowly becoming obsolete in many parts of recruitment.

Spend time with your top candidates


Many recruiters only need to provide a small number of placements each month to be successful but to ensure that this happens, you should spend more time with each of your candidates. It may sound crazy, but meeting candidates before their interview, going through the interview in detail, and answering any last-minute questions they may have could just help make your success rates go through the roof. 

Even if the candidate does not get the job, they will most likely be the most prepared client, which will for sure land you positive client feedback. Making the recruitment process will not hurt anyone.

Network as much as you can


While connecting with people online sounds like a no-brainer, it is not what networking is really about. If you want to be successful at networking (and as a recruiter, you kind of have to), meet and connect with people in the real world. 

Attend industry events, visit your clients, have meetings in coffee shops, talk to people as much as you can. Recruitment is much more about connecting with people than data entry and admin work.

Avoid working with companies you don’t know


To avoid as many fee disputes as possible, you should only work with a company you currently have relationships with or the ones you can build one. 

The majority of stress in recruitments comes from fee disputes that usually happen due to weak personal relationships between the client and the recruiter. 

If you can’t get a relationship going with a recruiter, the chances of a successful recruiting relationship are almost non-existent, especially when starting a recruitment agency.



So there you have it, all the ins and outs of how to start a recruitment agency. Once you have read our expert tips and followed all the steps we have laid out, it is time to start your own recruitment agency. 

To find out how Recruiteze can help support you and your recruitment agency, be sure to sign up for a free trial.

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