Starting a Recruitment Agency

By Neil Bolton, Recruitment Guru and CEO of Recruitment Systems

Have you ever wanted to be your own boss and recruit your way? CEO Neil Bolton shares his experiences leaving Candle Australia to start Recruitment Systems.

As a manager for ASX-listed IT Recruitment Company Candle (now known as Clarius), I knew I would have more freedom with my own business. I started a recruitment software company which was probably a much more expensive option than starting another recruitment agency (it cost about $1.7million in seed capital). Even a recruitment agency has considerable overheads and you must ensure you have an appropriate mix of debt and owner’s equity funding (your gearing ratio).

"Go it alone" without going it alone
Though you may see the creation of your own agency as a means from doing things your way and breaking your dependence on others, it is stupid not to get assistance. It is important to find a mentor you get along with who shares your vision. This mentor must complement should ideally possess all the key skills you don't have. It is crucial that you identify gaps in your skill set so you can identify people who do have these skills. If you can't find suitable mentors or partners, pay for a consultant even if they seem overpriced.

Get rich quick?
If you are planning to leave a comfortable job as a recruiter to become wealthy, I suggest you rethink your plans. I have not met one successful entrepreneur whose primary driver is to become wealthy. Becoming wealthy can be a happy by-product of building a successful business. That's what it's about: Building something of which you can be proud. If you get into it to make money you will constrain your opportunities dramatically.

You must also be prepared to fight for your survival while you are cash-flow negative. Our founding team had to tighten their belts and survive on ridiculously low wages for several years. We have now finally moved past this and have rewarded all the staff who stuck it out.

Still, the tough period had its benefits. We all developed very thick skins and are now less afraid to take risks and chase opportunities. Even so, we will work ourselves silly, so we never have to ask the in-laws for a loan again!

Develop processes then eliminate them
The aim of Recruitment Systems is to use technology to eliminate or automate processes. Through solutions like the TRIS Recruitment CRM, we automate or eliminate all the boring and repetitive admin work to leave the real work to humans.

You need to define a clear set of processes built on best-practice recruitment principles. Ideally, you must also ensure your business model includes some element of value innovation. Rather than competing in a fiercely competitive market space, value innovation will help you create uncontested market space and fight off competitors including your former employers.

Free guide to starting an agency

This eBook answers the most frequently asked questions faced by recruiters who start a new venture. The guide looks at the specific challenge of starting an agency during the economic downturn.