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What is the real cost to starting a recruitment agency?

The process of launching a business is initially a relatively cost-free exercise. To start a recruitment agency you need a phone, internet and a registered limited company.

These on average cost:

  • Phone – £30 pcm
  • Internet – £25 pcm
  • Limited company registration – A one-off payment of £12

However, these are the bare essentials. And to be successful, you need to invest in a lot more. In this blog, we’re going to explore what costs you should expect when starting a recruitment agency.


A recruitment website

We live in a digital world.

For any business to be accessible and successful, they need a website. And recruitment businesses are no exception to this rule.

You can build your website yourself. With solutions like Wix and WordPress, it is easy to build a basic website. This article shares some good advice on what is needed to create a good recruitment business website.

However, website design plays such a key role in the success of your recruitment business online. You have to ask yourself the following:

  • Is your website aesthetically pleasing?
  • Does it follow the latest trend in website layout?
  • Is the design responsive?
  • Is it easy to navigate?
  • Does it look professional?
  • Is it better than your competitors?

You also have to take into consideration how you will stay on top of SEO, run your AdWords campaigns, manage your social media pages alongside the website and, most importantly, keep your site up-to-date and working.

This is where you might want to invest money, bringing in an expert. This could either be:

  • an agency who will create and manage the website for you
  • a freelancer who will build your site


Advertising costs on recruitment job boards

People rarely look for jobs in newspapers anymore. With tools like Easy Apply on LinkedIn, it’s much quicker and easy to find and apply for a job online.

With this in mind, a good recruitment agency will have a strong online presence that extends beyond their website and LinkedIn profile. To attract the widest pool of potential candidates, you need to advertise roles on as many of the most reputable job sites online as possible.

Advertising costs for this will vary, based on the following factors:

  • The level of detail in the advert
  • The popularity of the job site
  • How high on the results page you want your ad to appear

Let’s discuss these quickly.

Most job sites will offer tiered advertising costs, based on the kind of advert you want to go for. For example, a basic advert with no photos, a limited word count and one CTA, may be free. The next advert option will let you have an extended word count and two CTAs, but will cost more. The third tier will have an unlimited word count and as many CTAs as you like, but will cost more again.

There are an abundance of job sites online, however, to attract this best talent, you want to be visible on the most popular sites. There is a good change that these will cost more than the others, but you need to see it as an investment. You may be able to negotiate a deal on the cost if, for example, you post five jobs on one site.

Many job sites also offer the option to pay for your advert to appear high up in the search results. This additional cost is something you should consider, taking the value of the role to your business, and the urgency to fill the role into account.

It’s also worth thinking about what you will spend creating the job ad copy. As with setting up a website, you have the option to work with an agency or employ a freelancer. However, you also have the option to create them yourself. Writing a job advert may seem like a simple task, however, writing one that converts an individual into an application requires more work than you might expect. To help you with this, we shared some advice on how to write the perfect job ad.



Data management for both your clients and candidates is essential. And an Excel spreadsheet just won’t cut it. You need to have a CRM in place to mange your data.

You can build one yourself, however, if you take this route, you need to analyse whether the money spent on time and resource will be worth it. You’ll also need to bring a specialist in, as a good CRM isn’t the easiest thing to create.

Another option is to use an existing CRM, provided by an external business. In our ultimate online recruitment toolkit, we have shared some of best CRM providers you could use. The cost varies from provider to provider, but it’s worth investing in, as a good CRM will sit at the heart of your recruitment business.


Contracts to send to your candidates and clients

Without a contract in place, you will struggle to keep your candidates and clients in check and, even with extensive vetting of both, there is no guarantee that they’ll be as good as their word. So, you need to have contracts for every placement you make and role you fill.

As a contract is a legal document, it needs to be drawn up by a lawyer – or approved by one at the very least. Lawyers often charge per hour, at an average hourly rate of £300. This means that it can end up being costly to have a contract created for every new placement. But, as the contracts are a necessity for your business, it’s a necessary spend.


Finance for contract recruitment

In contract recruitment there’s a shortfall between paying your contractors regularly and receiving payment at a later date from your client’s invoices. This gap grows wider with every contractor you place. That is unless you have a good invoice factoring provider behind you.

A good provider will bridge this gap by supplying you with your profit quickly and in full, so you have the capital to hand to accompany your growth.

Invoice factoring can be an expensive addition to the business, depending on the provider you choose. This guide breaks down how much you might end up spending to use an invoice finance provider, and uncovers the hidden costs and additional fees some charge.


The above costs are not a definitive list by any means, and you can expect to see additional costs appear as you grow your business. These will include insurance, rent and bills, salaries, expenses and commission, etc.

And the above will vary in their price and the amount of your time they consume, especially if you want to design your own website of CRM.

As an invoice finance provider with a background in recruitment, we understand what you need to start a recruitment business. This is why we do things differently to other providers.

  • We pay you 100% of your profit every week, directly into your chosen bank account
  • We only charge one fee for the use of our finance, back office and support
  • We provide contract templates as part of our back office solution, so you don’t need to pay someone else to do them
  • We handle the admin for you, so you don’t need to spend time and money on this
  • We provide you with support, guidance and advice

Our approach to finance and back office allows new recruitment businesses to cut out some of the costs we mentioned above, and to have access to the funds they need to market and grow their business.


This article was originally published on May 13, 2014 and updated Mar 5, 2018

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