Recruitment agency as a business

Business ideas by directions

One of the types of business that are successfully developing even in a crisis period is the creation of a recruitment agency. As a result of the crisis, as in a period of prosperity, there are significant personnel changes in companies, a search is made for new personnel who are better suited to new tasks. On the other hand, a lot of people who have lost their jobs as a result of layoffs are starting to look for new opportunities to earn a living. All this allows you to make the work of a recruitment agency very popular, and bring additional income to its owners.
The attractiveness of organizing such a business also lies in the fact that it is not too expensive to create.
Strictly speaking, for the work of a recruitment agency, it is enough to have a small but comfortable room, a standard set of office equipment and communications.
For the work of a recruitment agency, we need our own qualified personnel who will be engaged in the selection and training of applicants, work with corporate clients.
It must be said right away that the qualifications of specialists play a huge role in the success of this business area. The recruiter must pretty much be a good psychologist, have testing experience, be able to communicate with company representatives and understand the level of requirements placed on candidates.
It is almost impossible for inexperienced people who have not worked with staff before to perform such work.
It is absolutely not enough to look through dozens and hundreds of vacancies, hundreds and thousands of resumes in order to accurately select a candidate that meets the needs of the customer. After all, often the representatives of the employer are not able to accurately formulate the requirements, therefore, the work of determining the selection criteria has to be carried out by specialists of the recruitment agency.
I must say that often a recruitment agency is confused with a recruiting agency, or with an employment agency.
Recruitment is usually carried out at the request of employers by a recruiting agency. His work consists in close contact with employers’ companies, obtaining vacancies from them, viewing his own database of resumes, or attracting potential employees through advertisements, and conducting a preliminary selection according to the necessary parameters.

The employment agency, on the contrary, having a database of applicants, selects jobs for them among the vacancies that it receives from employers, or looks for vacancies among advertisements placed in the media.
Despite the similarity of working procedures, the work of a recruiting agency and an employment agency is radically different from each other, although, of course, the payment for the work done is about the same.
The recruitment agency receives a remuneration of approximately 10% of the annual salary of employed workers. Usually, as a remuneration, one monthly salary is assigned. As a rule, companies with vacancies try to find employees without intermediary, trying to save money on recruiting agency fees. In the same way, job seekers try to avoid paying remuneration to an employment agency. Therefore, when performing work on concluding contracts, a recruitment agency needs to provide for legal opportunities for risk insurance. It should be noted that during periods of crisis, the services of an employment agency are in great demand, and during periods of development and prosperity, the services of recruiting agencies are more in demand, which are looking for personnel for a company in conditions of personnel shortage.

In terms of economics, the initial cost of setting up a staffing agency can be as little as one to two hundred thousand dollars. This money will be required to carry out repairs, register an enterprise, and purchase a minimum set of office and computer equipment.

It is much more difficult to manage current costs, since there is always a certain period of promotion, during which it is necessary to maintain staff, pay for rent of premises and utilities, and the income received is not able to cover the entire volume of expenses. Therefore, when organizing a recruitment agency, it is necessary to provide for a certain financial safety cushion in the business plan, which will allow you to survive in the period of formation.

The profitability of a recruitment agency, as a rule, lies in the range of 10 to 15%.

Promoted recruitment agencies in large cities are able to earn hundreds of thousands of dollars a month. However, such efficiency is possible only in the case of competent business conduct, the availability of a detailed business plan.

Our site provides an opportunity to order a business plan and prepare economic calculations for creating a recruitment agency.