The global economy is increasing, leading to the opening and scaling of businesses. As a result, most people are jumping at the chance of turning their vision into a reality. This surge of businesses provides a lucrative opportunity for the recruitment industry as enterprises have a growing need for new talent. 

Recruitment agencies have a crucial role as various positions await filling while many candidates are looking for a better opportunity. 

Recruitment is an exciting business, especially in the tech industry. In this blog, we’ll cover all the necessary steps to set up a recruiting agency. 

What is a Recruitment Agency?

Before opening a recruitment agency, it’s wise to understand how a business of this type works. 

A recruitment agency is also known as an employment agency. It is a form of for-profit business that finds suitable candidates for employers with vacant positions in their organizations. 

A tech recruitment agency typically has two types of clients- individuals looking for a suitable job and companies looking for qualified candidates. Also, it’s common for recruitment agencies to specialize in any field, like tech, marketing, etc.

How to Start a Tech Recruitment Agency?

Starting a tech recruitment agency requires extensive knowledge of human resources and the tech industry. As an agency owner, you will make strategic business and investment decisions. 

Here are some important steps to consider when starting a recruitment agency.

10 Crucial Steps To Focus On While Starting a Recruitment Agency

Ensure You Are All In

The first step to starting a recruitment agency is ensuring you have all the necessary knowledge and skills. Managing an agency is challenging, and you should be ready for it.

You can always take extra certification courses in HR or increase your knowledge of the tech field by reading and talking to people in your industry. Apart from that, having strong business skills with an understanding of finance, economics, and accounting is vital. 

Define Your Type

You don’t have to define your niche as you plan to open a tech recruitment agency, but you can choose the type of recruitment you will offer. 

Some of the options that you can choose from are:

• Niche Recruiting

This is the best form of recruitment for a tech agency. The name itself refers to recruiting for a specific market, like in your case- for the IT staffing industry. 

As a tech recruitment firm, you will want to only work in that industry as it will show your expertise and knowledge in the market, attracting more customers. 

• Temporary Recruitment

This recruitment service is for companies looking for employees in a specific role for a short time. Temporary recruitment is usually under a fixed contract. 

Most tech startups prefer to hire employees temporarily when their workload increases. It’s the new way of scaling up and down based on the requirement. IT companies also like to use this option when their full-time employees are on maternity or sick leave. 

In other cases, tech companies require employees with specialized skills for a specific project and choose this option. 

Agencies have two ways of doing this. First, they either post a requirement on their portal and social channels to fill in the position or screen candidates beforehand and keep them in their data reference to match them later when the position opens. 

In such an arrangement, the agency screens and conducts interviews on the company’s behalf. They further hand out the work contracts and even handle the payroll. 

• Social Recruitment

Social recruitment takes a different approach as compared to traditional recruitment. Most agencies have made it their sole focus, but you can leverage it as an extra channel rather than basing your entire agency on it. 

Recruiters don’t source candidates; the agency posts openings on their social platforms and invites people to refer or apply for jobs. 

The network is vital in recruiting, as agencies prefer to share revenue for each successful placement. However, the upside of social recruiting is that agencies can save costs as they need to hire a few recruiters for the process.

Ultimately, you can specialize in one type of recruitment or dive into all three. However, if you opt for all three types, you will need separate teams and defined systems. 

Analyze Your Competitors

Before starting, explore other recruitment agencies in your niche. Research their accomplishments, working style, and network. It will help you to identify market gaps and decide your unique value proposition. 

You can start by:

• Finding what percentage of positions your competitors can close
• Charges of your competitors for different forms of recruitment
• Marketing strategies your competitors are using

Also, focus on why other recruitment agencies fail to close positions, as that will help you to define your strategies. 

Learn the Laws and Regulations

As a staffing company, you must figure out what type of entity you want to register as every country has different structures. Also, consider the kind of customers you want to work with, as that will determine your choice of entity structure.

For example, if you are recruiting global talent, you must study the laws accordingly. As for EU nations, it doesn’t matter where your company is registered; you will have to be GDPR compliant. 

Check Your Finances

Starting a recruitment agency doesn’t require as much money as other startups, but you should know what resources you have at your disposal. You will have to consider capital expenditure (CAPEX) and operations expenditure (OPEX).

Start by allocating the budget for:

• Office Space
• Salaries
• Marketing
• IT Infrastructure
• Subscription to top job boards like LinkedIn, Indeed, and more
• Recruiting tools like ATS and Recruitment CRM
• Insurance
• Miscellaneous business expenses like electricity bills, refreshments, and more

Seek financial advice to also understand if you need third-party investors or a partner.

Develop a Branding and Marketing Plan

Marketing your tech recruitment agency will improve its chances of success. Work with a marketing manager who helps you create a logo, design a website and develop a marketing strategy. 

If your budget permits, you can hire someone or outsource the work to a freelancer or agency. 

Invest in Tech Tools

Many tech recruitment agencies refrain from using tools to keep operational costs low. But recruiting tools like ATS (Application Tracking System), recruitment Chrome extensions, and recruiting CRM will help you tremendously to close more job vacancies. 

Recruitment involves a lot of mundane tasks like messaging candidates, resume screening, scheduling interviews, calling candidates to ask pre-qualification questions, and preparing spreadsheets. 

If you don’t use recruitment tools, you will invest time performing repetitive mundane tasks. Eventually, you will not be able to focus on getting more clients and closing vacant positions. 

Hire Good Recruiters

If you want to maximize your tech agency’s potential, you must hire good recruiters with knowledge and experience. If you have budget constraints, consider hiring a mix of people; some are experienced, while others are in entry-level positions. 

Most agencies that start choose to work with freelance recruiters first and later offer full-time contracts when they have enough clients. 

Plan a Business Model

Your business model will determine the value you offer your customers. For example, decide whether you will charge a success fee or an hourly rate. Will you operate as an embedded part of the organization or as a separate agency? Will you work in an exclusive or a nonexclusive contract?

Defining this will give you clarity and help you communicate effectively with clients. Your model should include two major things- pricing model and delivery model. 

Finding Customers

Once you have planned all the things mentioned, you will have to create a customer strategy. It will help you understand your target audience, enabling you to offer clear messaging on all marketing collaterals.

Start by identifying a list of companies you want to work with. Later, define the buyer’s persona to help you target such people in a company. 

When starting, an outbound strategy works best for obtaining clients. Thus, having a plan that defines your ideal client, who they will be, and which channels you will use for outreach will help you.

Conclusion

Starting a recruitment agency needs a lot of planning. You should always start by ensuring you have enough knowledge of the tech and HR industry. Your second step can be defining the budget and studying the competitors. Later, you can move forward to business models and branding strategies.

Although, remember to plan everything before making your business operational. If all these steps seem overwhelming, break them down into smaller steps to ensure you finish the work.