Starting up a recruitment agency can be great, but the aim of most businesses is to grow. So how do you go about doing this? Read on to find out.
So, you’ve started up a recruitment agency. You have all the software you need, you’ve been placing candidates in a few roles, and you might even have taken on staff. There’s just one problem: your business doesn’t seem to be growing as quickly as you’d like it to, if at all.
This is not an uncommon issue among startups, but its one you should be able to remedy. You need to bear in mind that growth means achieving one or – ideally – more of the following three things:
- Increasing your number of new and returning clients
- Increasing the value of your average transaction
- Improving the efficiency of your processes
If you can manage all three of these, your business should start growing quickly. If you feel like you’ve already done this but still aren’t seeing growth, then you need to have a look at your finances and try to identify any costs that are preventing you from achieving your potential. In the meantime, here is our guide to each step.
Increasing new and returning clients
One of the key methods of increasing your revenue and growing your business is to attract more clients. This can be a difficult strategy for startups, as it can mean investing money in marketing, which is not always affordable. However, there are other tactics that can work that don’t involve spending significant amounts.
A potentially beneficial option is to focus on referrals. If your clients feel like you have done a particularly good job – more on that later – then they will be more likely to refer other businesses to you. You can increase the rate at which this happens by offering incentives for referrals, possibly in the form of free or discounted services.
Of course, getting your current clients to come back to you is also a very viable strategy, and the best way to achieve this is to provide a great service. Bullhorn has found that 86 per cent of recruiters agree on the best strategy for this: regular communication with hiring managers. This was found to be the optimum tactic for improving client engagement, making them more likely to come back for more.
Increasing the value of your transactions
You probably charge clients a fee based on a percentage of the salary of a successful hire. Increasing this revenue means higher profits and more opportunities for growth. However, raising your fees can lose your business. Instead, you need to focus on other ways of increasing this value.
As your fee is based on what a successful candidate earns, it stands to reason that you will make more by recruiting for higher-paying jobs. Specialising in a particularly well-paid sector can, therefore, be a great way of increasing your revenue.
In the UK, some of the best-paid jobs are in the medical sector. Reed found that the average salaries for GPs and consultant psychiatrists were over £100,000 per year, while sonographers make an average of £95,000 per year. Certain tech jobs are very well-paying as well, with cloud architects averaging yearly salaries of £98,000 and data modellers averaging £94,000. Try and focus on the most profitable sectors IT and Construction, a study by IHS Markit on the Purchasing Managers index, revealed a positive growth figure of 52.2% for the Construction industry. to recruit contractors in this sector you need to have 100% Gross status otherwise 20% of your invoice value will be held back and resolved quarterly. Services like Boomerang Funding™ mean you can compete with all the main recruiters and supply contractors the same day, if necessary, using HMRC fully compliant 100% Gross status.
More efficient processes
The longer it takes you to find the right candidate for a job, the fewer candidates you can place per month, and the smaller your revenue will be. Of course, rushing the process will leave you making poor hires and losing return business, so how can you speed up your work? The key is efficiency.
A Robert Half study found that, on average, it takes 27.59 days to hire someone. Of this time, 5.19 days were taken up checking references, 4.77 days were spent screening CVs, and 4.75 days were used up with interviewing candidates. So how can you trim the fat from these processes?
One option is to set clear metrics for clients. So for example, you may decide to screen people for experience, say you need someone with a minimum of 5 years of industry experience. Just like that, you can eliminate a significant chunk of CVs. You can even utilise computer programs to scan documents for these keywords, automating significant chunks of the process and saving you a lot of time and jobboards like Indeed offer this as part of the application process.
Diversify your offering
Another way to grow your agency is to look at the type of placements your making. Perm is a great way to start an agency but contract recruitment can help you grow more quickly, in fact we talk about this in another blog How to Be Your Own Boss – Starting Your Own Recruitment Agency
Found this interesting? Why not take a look at our other recruitment blogs.