Though times have been tough since the recession hit five years ago, there’s mounting evidence British business confidence is returning as economic conditions improve. The Office for National Statistics’ third-quarter figures, published last month, confirmed gross domestic product had grown 0.8 per cent – the strongest reading since the spring of 2010. And, following suit, subsequent reports have said the UK’s employers are finding an appetite for recruitment.
At the end of November, for instance, the Recruitment and Employment Confederation (REC) posted the results of a survey that found almost two-thirds (66 per cent) of bosses expect to make permanent hires in the next three months. Meanwhile, 44 per cent said they wanted to take on new agency workers too.
“This is fantastic news for people looking for work around the UK with managers on the lookout for temporary and permanent staff and in the build up to Christmas and beyond,” said Kevin Green, the body’s chief executive.
Similarly, a more recent report from REC and KPMG found the number of vacancies at British workplaces soared in November – in fact, the rate was faster than it’s ever been since July 1998. Furthermore, the trend was felt in all monitored regions, meaning new opportunities are being created up and down the country.
With all this in mind, it might sound like there’s no better time than now for ambitious recruiters to start their own businesses. Employers are more confident than they’ve been in years, and with vacancies growing at a speed unseen in 15 years, surely a canny agency can take advantage of the upturn?
A recent panel discussion, hosted by Recruitment Buzz and headed up by a handful industry experts, said the answer was yes. However, starting a business at any time means thinking carefully over a range of factors. Here are some of the things you’ll need to consider as a recruitment startup.
Have a business plan
While most of the experts quizzed by Recruitment Buzz said now was a good time to set up a company, the caveat they most frequently gave is that the market alone won’t make or break your startup.
“Starting a new business certainly needs a more solid base and business plan than just a hope that an improving economy will automatically mean your business will succeed,” commented Liz Longman, managing director of TEAM.
A successful recruitment startup, the panel agreed, should be willing and able to throw their weight behind the latest industry trends – like using social media to source candidates, for instance. Ian Knowlson, director of Selling Success, told entrepreneurs hoping to find their talent on job boards to “think again”.
Joe Slavin, managing director of digital classifieds at Johnston Press, speculated: “What types of businesses will succeed in the next job boom? I’d bet on a smartphone solution that offers mapped, proximity search for temp … or involves the use of a smartphone to create an easy to complete application.”
Identify your client base
While the economic upturn has been felt in a number of sectors, a recruitment startup will need to think carefully about the employers it’s going to target. According to Azmat Mohammed, director-general of the Institute of Recruiters, new businesses would be savvy to focus on the UK’s small and medium-sized enterprises (SMEs) instead of larger companies.
SMEs account for 99.9 per cent of Britain’s workplaces, he argued, and they’re unlikely to have in-house hiring departments – so when economic growth is more keenly felt, they’ll need a hand in procuring talent.
Of course, your ideal client base will depend on the skills and networks your recruiters bring to the business, so don’t assume there’s a one-size-fits-all solution to the problem of which workplaces you should work with.
Make sure your finances are in order
Finally, if you’re starting up a recruitment business, it’s important to get your financing right from day one as it might be a while before there’s a cash flow to speak of. At this point, outsourcing some of your back office functions might be a good idea – it’ll give you the opportunity to focus on growing your startup’s profitability instead of spending time on tedious administrative tasks like chasing payments.
While you can turn to a high street bank for funding by way of invoice discounting and factoring, there’s likely to be a long list of prerequisites, credit checks and confusing hidden costs. By using an alternative contract finance solution like Sonovate, you can look forward to no upfront or annual payments – you’ll be paid for every timesheet completed and nothing else besides. We also provide back office and legal support, so you’re free to concentrate on running your business.