When is the best time to start a recruitment business? With this question coming from a company that specialises in supporting recruitment entrepreneurs to start and grow their agencies, the answer should be an obvious one. But it isn’t because we say that now is the most opportune time, it’s what the market is saying.
In September, the latest IHS Markit/REC Report on Jobs was published – a monthly survey of 600 or so recruitment businesses that serves as a bellwether of how well the industry is performing in real time. It found that whilst the rapid rate of growth in demand for Permanent and Temporary candidates is starting to show signs of a slowdown, it still continues to remain at record levels.
Indeed, the report highlighted that 1 in 5 (19%) of UK employers plan to increase their headcount over the next three months, with recruitment agencies increasingly being used as part of the hiring process. All of which is great news for the sector as a whole, but it gets even better.
According to the Recruitment & Employment Confederation (REC), 45% of all hires made over the last 12 months came through a recruitment agency. By the end of 2018, this number is set to increase to 56%.
Driving this are two key factors – lack of time available among employers to go into the market and seek out the talent they need, and the realisation that recruiters invariably have the skills to find the best candidates who are both in and on the market.
So is now a good time to start a recruitment agency? The answer is of course yes, although not just because of the reasons highlighted above. One of biggest reasons why the sector is growing so fast is because it is so much easier to enter it in the first place.
If you were a recruiter with ambitions to start your own agency at the start of the decade, there were a number of obstacles preventing you from doing so – finance (or lack of) being the most obvious. The economy was slowly emerging from the worst recession in living memory and the finance sector was in no position to be offering support for aspiring recruitment business owners. This gave rise to the alternative finance sector.
Alternative finance was certainly nothing new. What was different is that as traditional forms of lending became harder to obtain, businesses needed to look elsewhere for support and when it came to recruitment businesses, we were often the first in line.
We have supported hundreds of recruiters over the years. From enabling them to start their businesses without any financial outlay to supporting them as they evolve from being a start-up to an established and growing business. For instance, our recruitment funding solution provides 100% recruitment finance. This means that if you were to win a contract on day one of your new agency opening its doors to supply 1, 10 or over 100 workers, you won’t need to worry about the cash flow. We pay your workers and you, your margin every Friday. Also, as a Simplicity partner you have the benefit of receiving our FREE CRM and workflow solutions called GEMS.
From CRM and payroll to Invoicing and reporting, GEMS does it all for you. One system, one process, one entry – GEMS combines your front and back office systems and processes allowing you to spend more time on resourcing the right candidates and growing your business.
So, to address the question once more as to whether now is a good time to start a new recruitment business, the answer itself comes in the form of a question: Can you think of a better time to do so? Neither can we.
For more information about starting your own agency, speak to the team who have been supporting ambitious recruiters longer than most.