10 Steps For Starting a Recruitment Agency


Whether you’re new to recruitment or looking to go on your own, starting a company is never an easy task. Luckily recruitment has lots of great services and tools to make life easier and let you focus on what you do best: recruiting!



STEP 1 - Determine what type of recruitment you want to provide

 As a start-up you want to choose a niche. Choose whether you want to focus on a particular industry: (IT Professionals, Lawyers, Builders) or perhaps focus a particular type of recruitment: permanent, temporary or perhaps executive search? Pick something that you and have an interest in and that you add value to. Whether that is your industry knowledge or perhaps your list of contacts. 


TIP: According to Recruitment Buzz  the industries tipped for highest recruitment growth in 2017 are:

1. IT and Technology
2. Engineering
3. Construction
4. Oil Gas and Energy
5. Accounting & Finance 





Business is a competition. You need to be able to find a reason why someone will choose your agency over the competition. Assess the competition, look for their weak spots and work out what you can do better than them.  You need to differentiate on one of the 4 Ps. Product, Price, Place or Promotion.







If you haven’t done recruitment before it’s not for the feint hearted. Long-hours and high energy usually lead to a roller coaster of emotions. However the rewards can be massive!

If you don’t have much recruitment experience the either:

  1. Gain experience by working at another agency first
  2. Find a business partner with lots of recruiting experience 




STEP 4 - Evaluate the recruitment agency start-up costs

Unlike many other start-ups the initial costs for starting a recruitment agency doesn’t have to be that expensive. Many people start working from home or a small space in a shared office such as Regus. Other costs to think about are: staff, corporate insurance, laptop, marketing, recruitment software, and other business expenses. Work out if you’ve got the funds. If not there are plenty of options for funding with companies such as TBOS specialising is funding for recruitment agencies. 




STEP 5 - Do some reading. Rules and regulations to be specific

Whilst some people just rely on lawyers, any savvy business owner would also be aware of the laws themselves. On the exciting list of ‘must reads’ are: Employment Agencies Act 1973,  Employment Business Regulation 2003 &  GDPR.  Other legislation may vary depending on your sector, there’s a nice overview at GOV.UK .





STEP 6 - make it official

It’s time to put pen to paper and start registering your company.

  • Choose a name and set up a limited company. You can spend hours online using Companies House – Name Availability Checker
  • Choose a website domain, it’s arguably more important that the company name! Again, use tools to see what’s available, GoDaddy Domain Search
    Buying the .COM extension is a must have, but you can also buy a few extra extensions for usually very little money. CO, .ORG, .UK and even .LONDON are now available.
  • Open a business bank account. All the main banks have business banking, many with different perks including free travel insurance and free fees for the first year.
  • Take out insurance. As a minimum you will need Public Liability Insurance (protection against compensation claims), Professional Indemnity Insurance (protection for your services or advice) and Employers’ Liability Insurance (keep your employees safe).
  • Get VAT registered (assuming your turnover is going to be more than £85,000)
  • Find an Accountant to keep the books above board.

TIP: Many recruitment agencies have very similar names. Try to steer away from the norm and avoid buzz words such as ‘Talent’, ‘Search’ or ‘Recruit’. Choose something catchy or meaningful. Your name doesn’t have to describe what you do; think Amazon, Deloitte, Waitrose


Home Office

STEP 7 - choose your location

Depending on the type of recruitment you will offer location can be important. If you want to be a high-street recruiter you will need to be somewhere that candidates can easily get to. If you are going into a niche or focusing on executive search you can realistically work from anywhere. With advances in technology this is becoming more and more accepted with many employers now even adopting video calls for interviews. If you can’t afford a fancy office in a prime location don’t worry – just invest in the technology so you can provide a professional service from anywhere. 



Notice Board

STEP 8 - create a marketing plan

  • Make a list of potential clients (either by location or industry). These might be people you already know or details you’ve obtained from an internet search. Do your homework before making contact with people: first impressions count.
  • Find candidates. A recruitment agency is nothing without candidates. Use tools such as Voyager’s iResearch to find candidates from multiple platforms in one click.
  • Produce your marketing materials. Create a logo & design your website. Creating a website is no longer just for techies. Tools such as Wix make it really simple, just choose one of the templates and drag in images and text to make the website your own.
  • Decide on your pricing structure. Are you going to charge a commission percentage or perhaps go for a flat rate fee? Be prepared to be competitive on price when you start up (remember it’s one of the Ps). 

TIP: Typical commission rates range between 10% - 30% (depending on the demand for the role). Flat fees can start as low as £600 +VAT but this is usually just for a shortlist of suitable candidates via online job board searches.


Recruitment Software

STEP 9 - Invest in the right recruitment tools

Must-have tools from day one include:

  • Recruitment Software / Recruitment CRM – many software packages specialise in only one recruitment type (perm, contract or temp) whereas Voyager Infinity provides an adaptable solution allowing you to diversify into other areas as you grow. Top 6 questions to ask any recruitment software supplier are:
    • Is it cloud based?
    • Can I access it from my mobile?
    • Does it integrate with job boards?
    • Does it automatically synchronise my emails?
    • Are there reports & dashboards so I can quickly see how my business is doing?
    • Will it automate my tasks and act as my own personal assistant?
  • Job Posting Sites – unless you are focusing on one industry where there is one main job board (such as CW Jobs for IT), most people go for a job board aggregator such as Logic Melon or Broadbean 
  • Back-Office Systems – you can either do it yourself with tools such as Sage 50 or QuickBooks. Alternatively you can out-source the head-ache of back-office and use a Bureau such as Mazars or TBOS

 TIP: Trying to save money by not investing in the right technology is a false economy! You’re more likely to make mistakes, damage relationships with clients & have a data breach resulting in hefty fines.  Technology truly is an investment to help your company grow, it’s not just a cost.

Once you’ve been trading for a few months and have started bringing in some placements you could look to expand your tool set with:

  • Online Timesheets – Add a USP and make timesheet management easy for candidate & clients with TimesheetPortal 
  • Cloud Telephone System – Provide a professional business presence even when you are on the go with Online telephony systems such as CloudCall 
  • Email Marketing System – Send targeted mailshots using systems such as MailChimp with advanced with professional designs, click analytics and mobile compatibility it will help your business grow.




Hire experienced recruiters to win new business and make placements, then more junior staff to learn the ropes and conduct the administrative tasks. As you look to grow the company build in teams of 4:




Recruitment Teams

When you get to 10 staff you may want to think about specialist roles such as marketing and finance. Until then you will have to split these activities between yourself and other staff.

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