How To Start A Recruitment Agency: A Comprehensive Guide

Excel In A Recruitment Role

A recruitment agency is a company that helps businesses find and hire suitable employees for their open positions. Not only do they help businesses, but they can also help potential employees find positions that perfectly align with their skills, qualifications, and experience.

Starting a recruitment agency is important because there is always a high demand for talent and a need for effective talent acquisition solutions. This demand will continue to increase as the economy continues to grow and change.

By starting a recruitment agency, you will fill in a much-needed demand and provide valuable services to not only businesses but also potential employees. You will be able to help both parties stay ahead of the curve and navigate the ever-changing job market.

Know What Type Of Recruitment Agency You Want To Be

Candidates through Recruitment Techniques

Before you invest capital in your business, you first need to do your research. You need to know what type of recruitment you want to specialise in and what you want your target market to be. By knowing this, you will be able to direct your energy more productively.

There are four types of recruitment agencies.

Retained Recruitment Firms

Retained recruitment firms are used by companies looking to fill senior-level positions.

They typically come up with a long list of potential candidates, including candidates that are not actively looking for a job, and then narrow this list down to a strong shortlist.

These types of recruitment firms are usually highly motivated to find companies a suitable candidate, and their recruitment process is usually more rigorous due to the type of position they need to find a candidate for.

Contingency Search Firms

Contingency firms come in to work with companies when their in-house team can no longer handle the recruitment workload.

Contingency firms often work for multiple clients concurrently and are often used to recruit lower-level or non-specialist positions.

Staffing Agency Recruiter

Staffing agency recruiters help companies fill vacant positions with temporary employees.

Staffing agency recruiter agencies often work for industries with a lot of short-term projects, such as IT and construction, and seasonal sectors, such as hospitality, retail and tourism.

RPO Companies

Recruitment Process Outsourcing companies are external providers who take over all or part of a company’s recruitment process.

They are not only responsible for sourcing candidates for a specific role but also for the entire recruitment process, from strategic planning to evaluation and analytics.

Business Planning And Legal Requirements

Once you have identified which sector you would like to recruit for, you can then start writing out your business plan.

The following major aspects are frequently included in a business plan:

  • Executive summary: This is a high-level summary of the company. This summarises elements like the company’s mission statement, market analysis and financial projections.
  • Market analysis: This section of a business plan contains a thorough analysis of the recruitment industry, including an overview of the company’s target market, competitors and the agency’s niche.
  • Business structure: This section contains the legal structure of the business and the type of entity that the business will be, i.e. sole proprietorship, limited liability company, etc.
  • Services: This section describes the services that the agency will offer, including both traditional recruitment services and any specialised services that will set the agency apart from its competitors.
  • Marketing plan: A comprehensive plan for marketing the agency’s services, including strategies for building a strong online presence, networking with clients and candidates, and developing a referral program.
  • Operations plan: This section describes the day-to-day operations of the agency.
  • Financial plan: This is a comprehensive financial plan that includes projections for the agency’s revenue, expenses, and profits over a set period of time.

Register Your Agency

Once you have your business plan set in place and you have acquired the necessary funding, you can then start your recruitment agency by registering your business with the HM Revenue and Customs (HRMC) And Companies House.

If you feel like you’ve got the necessary knowledge and skills, you can do it yourself. It only takes a few hours to do it online.

You can also hire an experienced accountant to help you with this process.

Once you have completed the registration process, you will get a certificate of incorporation, which states the opening date of your agency.

Building A Strong Team

A corporation is only as good as its employees. As a result, it is critical to choose individuals that have a strong work ethic, outstanding communication skills, and a desire to serve others.

In order to further strengthen your team, it is crucial that you offer ongoing training and development opportunities to help employees improve their skills and stay up-to-date with the industry’s best practices.

You can further strengthen the bonds between your team by creating a positive and supportive work environment that encourages collaboration and teamwork. This can help build a sense of camaraderie.

Implementing Best Practices

It is important to constantly be implementing best practices because they can help you build strong and long-lasting relationships with your clients.

Maintaining strong relations with your clients is important because they make up your network. You will use this network when looking to match the right potential employee with the job opening that is perfect for them.

These points are designed in a way that ensures you have the best chance of making a success of your recruitment agency. By following this guide, you will be well on your way to starting your own recruitment agency that has a well-structured team with the knowledge and expertise it needs to succeed.


Is a recruitment agency profitable in the UK?

Yes, a recruitment agency is extremely profitable.

It is standard for a recruiting agency to charge between 15% and 20% of a new employee’s first-year salary. These commission rates can end up being extremely high for the best-paid positions.

Do you need a recruitment license in the UK?

The answer to this question depends on which sectors of the employment market you plan on recruiting for.

If your agency plants on providing staffing services for the agriculture, horticulture, or food processing and packaging sectors, then you must obtain a license from the Gangmaster and Labour Abuse Authority (GLAA)

If not, then you do not need to obtain a licence.

Is it a good idea to start a recruitment agency?

It all depends on your skills and knowledge.

If you are an aspiring entrepreneur with knowledge of human resources, then starting a recruitment agency might be perfect for you.