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How to Start A Recruiting Business And Work From Home

Updated on March 15, 2016

How To Start A Recruiting Firm

Starting a business is a great lifetime achievement. The process of starting a business of any kind are much similar. Reruiting firms make money by finding suitable candidates for companies or projects. This could be the most profitable business anyone can ever do.

Imagine charging up to 25% for candiate who earns $150,000/PA as your agency fee. $37,500 on a deal that could be closed in 72hrs is not bad at all for any business and recruitng is one of those businesses that could make you this-only if you do it right. Though the sector has been well under regulated for years giving many rookies opportunity to delve in with various self styled system why some even give rediculous discounts just to make a living.

Many a times, clients are saddled with operational tasks and making time to look through accumulated CV’s and then line up interviews often make them think of outsourcing these tasks hence the reason why recruiting companies are still in business till even now. Will this ever change in the nearest future, I don’t think so but it may well be modified just as any other business.

Here are steps to be taken in order to start a recruiting business.

  1. Define Your Market

In recruitment business, you have to determine from the scratch what niche and what kind of recruitment services you will be covering as this will determine the type of candidate and clients you will be speaking to. You could choose to offer recruitment service on contingency basis which is finding a suitable candidate for your client before you are paid or offer retainership which is getting paid a percentage upfront before proceeding on a candidate search. On the other hand, you could decide offer both contingency and retainership.

2. Draft A Great Terms of Business

Many recruiting firms’ terms of business are so similar. A wise tactic will be to draft a fantastic terms of business that will offer your client great benefits without exposing your business as well. If everyone gives 3month rebate period you could decide to offer 6months. Many firms do not like to offer cash as rebate but often choose to offer free replacement in a case candidate leaves during the rebate period. To make it juicy to your clients; you could offer cash refund using a sliding scale based on how many month the candidate has spent. You will have to know what is common in the industry you operate or in your competition in order to know what part to be creative with in your terms.

3 Set Up A Back Office

If you are going to be offering temporary recruitment or contract, you will need a strong back office in order to meet up with client requests. You will need to have a bank that is capable of paying your temporary staff salaries while you await your invoices to be paid by clients. You will also need to either set it up internally or outsource your payroll operation which includes tax, insurance and all other statutory deductions to ensure compliance in business. However, it is often advisable for starters not to go straight into temporary placements but start with permanent placements where you only find the candidates for the clients and the client absorbs the candidate into their employee count and payroll system. You get paid one-off for your service. Temporary placements guarantees a long term business though as the candidate will be on your payroll for as long as his services are still in demand by the client and you make money off the candidate every month. You can start temporary placements with the clients you currently offer permanent placements once you are fully ready for temporary recruitment business.

4. Build A Database of Strong Candidates

Just like how key ‘content’ is in blogging, candidates are also key in recruitment. You will have to spend most of your start-up time acquiring strong candidates for the niche or market you plan to cover. It is pointless to start doing cold calling to clients and after getting a job order with 48hrs deadline and you are not able to come up with suitable shortlist. You will have to get it right the very first time. Create an overwhelming candidate database before speaking to client on supporting their recruitment search. This will give your consultants confidence when they speak to clients and if they have been speaking to these candidates while acquiring them, the conversation would have drastically increased their knowledge in the market they cover and might probably give an insight as to which clients they need to be speaking to.

5. Choose Your Team

Being a start-up, you might want to start with a few consultants. Many new firms even start the company with only the owner but I advise a minimum of two is ideal. Some clients or candidate might just not like the tone of a person and might prefer to speak with or deal with someone else within your company. You need to create the impression that your company is big even though it’s a room show business. If you are married, it may be a better option to have your wife as a business partner in this adventure.

6. Build Your Client Database

Having done all necessary things and I assume by now you have spoken to many candidates which might have given you classic information to leverage on when you speak to your potential clients. You would have gotten many of your clients from your candidates if you asked them the right questions. Now is the time to pick up the phone and do some real cold calling. Recruitment is a numbers’ game. Out of every 50 calls you make, only 3 or none might convert to actual placements. The bottom line is to continue and be persistent in speaking to clients, sending great mailshots, seeking referrals just to get businesses coming. This is an ongoing process. Pay more attention to your existing clients when in business and never stop acquiring new clients for your business.

7. Build Your Online Presence

Businesses are no longer done the old way. Do not hide behind the phone and emails and expect to see great results. Clients are looking for people who can add value to their operation. You need to constantly engage with your market professionals online by providing great articles on development in the market you cover. Don’t just have a linkedin or google plus page simply because everyone is having them. Create and constantly engage with your market. Parade your brand online like a subject matter expert.

8. Unleash Your Sales

Business is sales. Every successful business has a strong sales team. People talk about Mack Zuckerberg as a top inventor in social media but no one talks about him as a top sales person. It was the sales ‘A’ game in him that made him brainwash the world to forget their Myspace, Faceparty, Hi5, etc and turned to Facebook even when Facebook was still at its early stage. Many of the features on Facebook today weren’t available when he won the market space years back. If you harness the power of sales, people will buy into the future of your company and believe everything you have to say.

9. Make Your First Placement

The hardest thing in recruitment is making the first placement but when it does happen, it’s becomes a roller coaster. There is so much to learn before making your first placement. When it happens you then begin to see how things work from a wider perspective. Once you are able to fill a client position, you already have the client’s loyalty so make sure you sustain the new status by always living up to the client’s expectation. However, not all positions can be filled as placements sometimes can be controlled by so many factors. Know when to take a bow. One of the reasons might just be the client offering too low for a competitive position.

10. Dominate Your Market

When your clientbase is increasing and top candidates are flooding your phone lines in search of vacancies, do not be too confident that you are the best and clients can never look elsewhere. No matter the incentives or services you offer, there is always another Mark Zuckerberg in every market. Be on the watch and grow your market by constantly speaking to new and old candidates. Offer greater services to existing clients and look further for new clients. That is the way to starting a lucrative recruiting business.


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