Is it time you started your own recruitment agency?

Dreaming of starting your own recruitment agency? Then you’re not alone.

With ambitious recruiters focused on building relationships, hungry for success and driven by their ‘ABCs’ (always be closing), it comes as no surprise that many have thoughts of taking that ambition up a gear, by launching and building a recruitment business of their own. The benefits of doing so can be broad, with the ability to gain greater autonomy, higher potential earnings and increased flexibility, all being very appealing.

But making the move from employee to business owner is tough and running an agency won’t be for everyone. Starting any new venture takes a lot of time, energy and hard work - and carries with it a whole host of extra responsibilities, including legal and financial obligations. There’s also the fact that around a fifth of startups don’t survive past their first year, which can make the decision to step away from an existing role even more daunting.

However, high risk can mean high reward!

If the timing is right and you’re in a strong position to move forward, with a healthy network of contacts, great industry knowledge and a market niche in mind that you want to pursue, then you could be setting yourself up for success.

With so much to think about before taking the plunge, here we take a closer look at:

  Why recruiters may be tempted to go it alone

 Is now the right time to take the plunge?

 Starting a business versus working inhouse

 How to quit professionally

Why recruiters may be tempted to go it alone

There are many reasons why a recruiter may be considering starting their own venture. We asked the agency founders we work with, here at 3R, what influenced their decision. Here are a few of the most common factors:

Recruiters operate in a highly competitive and fast-paced environment where meeting targets and Key Performance Indicators (KPIs) is essential. Relentless pressure to fill positions within tight deadlines can take its toll on mental health and wellbeing, leading some recruiters to consider their options.

Many recruiters follow commission-based models and while this offers the potential for substantial earnings, it also means there is a ceiling to what can be earned. Starting an agency means recruiters can have more financial freedom and explore opportunities without their earning potential being capped.

Autonomy over processes and decision-making is crucial for job satisfaction. When recruiters feel micromanaged or restricted, their creativity and problem-solving abilities can suffer. Leaving employment to establish an agency of their own, allows them to shape their processes and strategies independently.

Working within a toxic environment, where poor leadership and a negative culture are prevalent, is not good for anyone. Recruiters who face constant negativity, lack support and face unethical practices, may quickly be driven to look for alternatives.

Ambitious recruiters want to see a clear road ahead. If their current role lacks opportunities for skills development, promotion or progression, they may be tempted to explore other avenues.

Building lasting relationships with both clients and candidates is fulfilling and recruiters may wish to retain greater control over these client interactions. Working for themselves allows them to nurture relationships without constraints. And the effort they put in, is what they get back out.

Work-life balance matters and for recruiters who are parents or who have other personal commitments, starting their own agency can mean they benefit from greater flexibility and a work schedule that better aligns with their lifestyle.

Spotting an opportunity or niche in the market is another big draw and can act as a ‘lightbulb moment’ for entrepreneurial recruiters, encouraging them to go for it and take the plunge with their own venture.

Is now the right time to start your own recruitment business?

Whatever your reason may be for wanting to go it alone, timing can be everything when it comes to starting a new business. To have the best shot at success, it’s important to do your research and be fully prepared. Here are some key factors that might influence your timings.

Have you built a strong network? Having a good understanding of the industry and a strong network and contacts books will be key for helping to build and grow your agency.

Are you passionate about making it work? Starting a new business will take all your time and energy, so you need to be 100% committed to making it work if you’re going to be betting on yourself and pursuing your dream.

Do you have the skills and knowledge you need? Think where there may be gaps in your knowledge and look to plug them or consider where you might get the expert support you will need.

Are the market conditions favourable right now? Understanding current market conditions will help you make the leap at the most potentially beneficial time.

Are you financially prepared? It’s financially disruptive to cease employment, stop receiving a monthly wage and start your own business. Ensure you have a large enough financial cushion to get started and also to sustain you while the business grows and begins generating profits.

Here’s an illustration of the financial pattern of starting up – and how long it could take to reach and surpass your current salary. (Fig1).

Another consideration that may impact the income your business makes over time is the type of service you provide. Whilst placing contractors may be slower to get going it first, it can reap higher rewards over time. (Fig 2).

Is starting a business the right choice?

Remember, starting a business isn’t the only option open to you.

If you’re unhappy in your current role and seeking a change, then you may instead choose to pivot into in-house talent acquisition. While this may not tick all the boxes, or provide the same freedoms that come with being your own boss, every career path has pros and cons.

Starting a business

How to quit professionally

If you’ve carefully considered all of the above, done your research, written a business plan and thought about the expert partners you might need to call on, then the final step is breaking the news to your current employer.

Be strategic in how you move forward. By ensuring you leave your current job professionally, you will help maintain positive relationships and keep doors open for future opportunities.

Always stay honest and transparent and adhere to your contract and covenants period.

Make sure you follow the correct procedure for who you need to inform and how. It is likely you will have to put your resignation in writing and undergo an exit interview. Prepare yourself for the possibility too of being given a counter offer too and think how you will respond in that situation!

In summary

Starting your own recruitment agency requires robust research and planning, and a solid foundation to launch from. With the right approach and support though, you could soon be building a successful agency that meets both your professional and personal aspirations.

Like what you see? You’ll find loads more helpful resources and expert guides on our website here.