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How to set up your recruitment agency in 5 easy steps

Making the decision to set up your recruitment agency is the beginning of an exciting journey.

To help you get up and running, we’ve outlined everything you need to do set to set up your recruitment agency in 5 easy steps.

We can’t help you choose the perfect name, however, we can show you the fastest way to register your company and cut down the amount of research and planning you need to do.

How close are you to setting up your recruitment agency? By following this post, you could get your business set up in a day!

What we’ll cover

  • How to choose a name for your recruitment agency
  • What you need to register your recruitment agency with Companies House
  • Key infrastructure and legal requirements you need to know and setup
  • Overview to branding your recruitment agency – from creating your brand to setting up a website and social media
  • Planning, budgeting and setting your year one plan

Step One: Choosing a name for your recruitment agency

Seemingly a simple task, coming up with a name for your recruitment agency can prove trickier than expected.

Before you deliberate over the perfect name, here are some branding pointers and a few legal parameters that you need to adhere to:

  • Keep it legal – There are a number of rules governing what can and cannot be used, make sure you check the full list here.
  • Check availability – Check that nobody has already registered the business names you have in mind – this can be done quickly and easily on the Companies House website.
  • First impressions count – Your business name will be the first impression your contacts have with your recruitment agency, so it is important to convey the right message. Think about your brand and the market you’re targeting (professional, easy-going, fun, etc.) and work around it.
  • Consider future plans – Your future plans are well worth considering before choosing a business name.
  • The wrong name could potentially cause headaches when expanding. (ie: difficult to branch into education when called ‘Oil & Gas Recruitment’).
  • Also, keep in mind that your name needs to translate well in any countries you are looking to enter.

Step Two: Registering your business with Companies House

Registering your company is an important milestone within the process to set up your recruitment agency.

It sounds scary but it’s the easiest and quickest process in the world – maximum 15 minutes!

Before you start, we recommend that you have some information ready, so that you can get through the process quicker.

If some fields are confusing, take a look at our mini glossary.

Make sure you have:

  • Company name and UK office address
  • New director name, address, nationality, date of birth and business occupation
  • Share capital details
  • Subscriber details and address
  • Currency and number of stocks/shares held
  • Preferred form of payment – the fee is £12 to complete the registration

Everything you need to know to setup your recruitment agency

Step Three: Putting in place support and infrastructure for your recruitment agency

There’s many things you need to be aware of and action to before you can start trading, including:

  • Business bank account
  • Accounting
  • Legal requirements
  • Business insurance
  • Terms and conditions and contracts

We’ve covered all of the above in more depth in our ebook. Below is a brief summary of the key topics you need to be aware of.

Accountancy

Hiring an accountant at different stages of your company’s growth, whether full-time, retainer or project based will make life a lot easier. Support can include:

  • Business plan and legal structure
  • Interim reviews (monthly, quarterly)
  • Annual tax return
  • Growth milestones £x turnover, headcount
  • Expansion and acquisitions
  • Tax planning
  • Exit and business sale
  • Management accounts, P&L, Cash flow

Recruitment agency business insurance

If you’re placing contractors, it’s essential that your agency has the same insurance as the contractors themselves so that liability can be passed down the line. Policies you should evaluate:

  • Professional Indemnity insurance
  • Public Liability insurance
  • Employers’ Liability insurance
  • Cyber and data risks insurance

Terms and conditions and contracts

Creating your T&Cs is an important step in the process – without them you risk non-payment and liability issues. 

Best practice includes:

  • Seek professional advice to create your T&Cs. 
  • Have separate T&Cs for contract and permanent placements.
  • Get the T&Cs signed and dated from the client before you begin to perform the contract. This removes arguments about whether or not the contract is legally enforceable.

Legal requirements

  • HMRC: The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2015
  • Data Protection Act
  • Agency Worker Regulations (AWR)
  • UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code)
  • Equality Act 2010
  • IR35

Step four: The most cost effective way to get your website online

The very first thing to consider is which platform you are going to use. You can use a drag and drop platform like Wix that are really easy to use (you don’t need to know how to code), but that might limit you in terms of customisation on the long run, or you can opt for platforms like WordPress or SquareSpace that might be a bit harder to get the hang of at first, but that will allow you to be very flexible as your recruitment agency grows.

Top web tips you must do:

  • Make sure your Calls to Action are obvious – If your CTA is for the users to contact you, make that obvious in your content and clearly label the CTA.
  • How do people get in touch? Ensure your contact details are easy to find and your phone number is visible on each page.
  • Make sure that you set your website address to auto-renew! See example here

Things to consider:

  • Write SEO content – Writing relevant content is crucial for your candidates and clients to find you without having to spend a penny. 20k page views to this article in 2018, all from SEO. We’ve provided help and guidance AND promoted our brand!
  • Social media – Keep this strategy very simple. Be where your candidates and clients are! If your candidates are active on LinkedIn, that’s where you need to be seen. Don’t go on every social media channel and platform if you don’t need to be there. You run the risk of spreading yourself too thinly and not achieving your targets.

Step five: Planning, budgeting and setting your year one objectives

Free recruitment agency business plan and budget templates

Go ahead! Download our business plan and budget templates. These are complete, professional and completely free!

We’ve collated a list of some of the events happening across the country (even a few abroad) that may be of interest for you.

Setting year one objectives

To set your year one objectives, break the actions into areas targets:

  • Sales target
  • Personal target
  • Perm / contract deals
  • Average fee / margin
  • Client / candidate referrals
  • Hires
  • Key clients won / retained
  • Account penetration
  • Perm / contract ratio
  • Exclusive / retained assignments

And then breakdown the targets into quarterly and monthly actions, monitoring key metrics that impact and influence target completion.

  • Application completion rate
  • Candidate call back rate
  • Candidates per hire
  • Cost per hire
  • Fill rate
  • Retention rate
  • Sourcing channel effectiveness
  • Time to hire

Your checklist for a flawless start

recruitment agency startup checklist

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Do you want more tips on how to successfully set up your own recruitment agency?

Download our guide to setting up to get the full insight!

Guide to setting up your recruitment agency

Setting up your own recruitment agency? Then you need this ebook.

Packed with expert advice, its practical, step-by-step approach explains exactly what to do and when to do it so you’ll go further, faster.

Download your copy today

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