How to Start a Recruitment Agency during the COVID-19 Pandemic?

Many HR professionals dream about becoming entrepreneurs and starting their own recruitment agencies. Yet, they’re also hesitant due to the seemingly unfortunate global circumstances.

If you’re among them, think about the possibilities. Your business could be what the world needs at this moment. 

How long are you willing to wait and postpone your plans? Although COVID-19 will likely become endemic, a senior WHO official has recently said we could end the public health emergency this year.

Omicron has already shown itself to be less severe than the Delta strain, giving us reason to hope for a more optimistic scenario this year. Although it might take longer to keep the pandemic under control, the circumstances for starting a recruitment agency might be better than you think.

Many enterprises and companies have struggled with talent shortages in the past year. They require support from recruitment agencies to find top talents and provide a better candidate experience. 

Moreover, not everyone is willing to start a new business amidst the COVID-19 crisis. This gives you an advantage because successful leaders recognize the right moment to take a calculated risk. 

Perhaps this is your time. Use this unprecedented period to show your courage and make a bold step. 

Here’s what you should know before starting.

Types of Recruitment Agencies

Recruitment or employment agencies are external firms intermediating between employers and job seekers. Companies and organizations looking for suitable candidates hire them to find the best match and help them fill available positions. 

Hence, recruitment agencies typically get a job description from employers, giving them insights into the ideal job applicant profile. Recruiters then access their talent pools and leverage professional networks to accelerate the pursuit and find the most compatible individual. 

Here are the four types of recruitment agencies:

1. Temp Agency

As the name suggests, these agencies find qualified candidates for temporary positions. For example, a company might need a temp worker to replace an employee on parental leave. 

However, businesses also hire people for busy periods (e.g., summer season in a tourist place) or when they need extra help to complete demanding projects. Employers define how long they need temporary employees, and temp recruitment agencies match them with a compatible professional.

Hence, temp agencies typically hire for flexible positions. Having said that, a company might also offer long-term employment to their temp-hire. The best examples of this type of firm are Randstad, Kelly Staffing, and Adecco. 

2. Contingency Agency

Contingency agencies receive compensation only after they have found and hired the best candidate. Although the majority charges employers, some may also charge candidates.

However, both parties - employers and candidates - should be aware of this up front. Recruiters from contingency agencies typically hire for entry-level and mid-level positions. For this reason, they usually send a batch of resumes to the company.

Candidates who apply for jobs through contingency agencies compete with multiple job applicants who found the opportunity from various sources, such as job boards and social media. 

K-12 Recruitment, Forrest Johnson Recruiting, and Davron are agencies that fall into the contingency category. 

3. Executive Search Firm

Retained Search Firms work with employers and help them find highly-qualified and experienced candidates for executive and senior positions. These recruiters have a specific skill set and can reach top talents from various industries. 

HR circles typically call them headhunters as these firms earn a percentage of a worker’s salary, even if the company doesn’t hire anyone. The best examples of executive search firms are Korn Ferry, JB Hired, and Heidrick & Struggles. 

4. Traditional Recruitment Agency

Traditional recruitment agencies help job seekers find the best job opportunities and assist companies in finding top talents. Although many specialize in specific industries, most staffing firms look for job applicants from various sectors and hire for all levels.

ManpowerGroup, Aerotek, and Roth Staffing fall into the traditional staffing agencies category. 

5. Niche Recruitment Agency

Niche agencies help companies find candidates for specialized industries and areas, such as digital marketing and manufacturing. However, these firms also look for job seekers with diverse backgrounds and demographic characteristics.

The best examples of niche recruitment agencies are NicheRecruitment and Sparks Group.

The Risks of Starting a Recruitment Agency amidst a Pandemic

Before turning your idea into reality, you should consider the following risks:

Business & Economy Unpredictability

Unprecedented events typically cause the economy to decline, affecting businesses and the workforce. For example, the pandemic triggered one of the worst global economic crises of our time. 

Even though the world is slowly recovering and going back to a new normal, COVID-19 isn’t over. Hence, it is important to consider the lack of certainty in this aspect when creating your long-term strategy.

Think about the possibility of more infectious strains and longer lockdowns. Not many companies would choose to hire if the economy undergoes another downturn, and you might find it hard to land new clients.

While this shouldn't stop you, you should prepare yourself with a clear plan and be ready to respond fast.

Talent Shortages

U.S. talent shortages are at a 10-year high. This means that most companies will continue struggling to find qualified candidates and address skill gaps.

However, recruitment agencies could also encounter difficulties attracting and hiring compatible job applicants. Ensure that you’re ready for this risk and know where you’d look for high-quality job candidates in a limited talent pool.

Having to Build Reputation and Credibility

Most companies will think twice before working with a new recruitment agency when there is no history and data that could speak about their efficiency and success. That makes it hard to start and land your first client.

In the absence of an established reputation and credibility, you would need a stellar marketing strategy, extensive network, and a large talent pool to reach your first clients. Consider the time you’ll need to cover these elements and position yourself on the market. 

The Resources Needed to Open a Recruitment Agency

Starting any business requires time, money, and energy. If you don’t have a financial plan and available resources, it’s time to plan this step.

Research the industry, local and regional laws, government support, and how much it will cost you to open a recruitment agency. Avoid starting without financial stability because you risk failing before starting.

It Takes Time to Find Contractors

As noted above, you must prove to potential clients that your recruitment agency is credible, efficient, and can solve their problems. Without a portfolio and past results, that undertaking could be challenging.

Thus, the pandemic has made people more hesitant about doing business and collaborating with someone who has only just started in the industry. Hence, leverage your previous experience and contacts to land your early clients and focus on demonstrating your capabilities and getting results. 

Compliance with Safety Measures

If you plan to open a company with physical headquarters and offices, you must consider the COVID-19 health situation and measures. Research the legal requirements and ensure you provide a safe and compliant environment.

That includes informing yourself about the vaccination rules, employment laws, and other relevant regulations. 

The Need to Work Remotely

The past two years have shown that it’s possible to work in a remote office and run a business virtually. Moreover, most employees love telework, and it has various benefits for business, such as increased productivity and higher performance. 

But establishing a virtual recruitment agency is no walk in a park. You must invest in stable tech infrastructure, think about digital business regulations, and find qualified employees. 

Therefore, consider whether you’ll open a physical office, be entirely remote, or opt for a hybrid approach. Whatever you choose, you must identify reliable technology to ensure high-performing and efficient teams.

Many remote recruiting agencies choose Manatal’s cloud-based software to ensure optimal collaboration and a productive remote workplace.

Why It's a Good Idea to Open a Recruitment Agency during the COVID-19 Crisis

If you’re hesitant about starting a recruitment agency during COVID, the following facts will show you why that’s a good idea. 

Learning to Operate in a Crisis is Empowering

Starting and running a business during the pandemic is challenging and takes courage, a well-thought-out strategy, flawless planning, and resilience.

It will inherently be hard to function in an ever-changing world, follow the latest regulations, and handle a crisis. But if you do that, you’ll gain invaluable skills and experiences. Moreover, you will feel empowered by that undertaking, resulting in long-lasting resilience and agility. 

Running Your Own Business Can Provide Safety and Stability

Establishing your business and becoming an entrepreneur can be a source of safety because you don’t have to rely on anyone for compensation or fear becoming a victim of an unexpected dismissal. Instead, you have control and the power to make all the vital decisions.

This can be a blessing at a time when many people are losing their jobs and struggling to find work. However, you also must be prepared to manage every responsibility and keep your company afloat, regardless of circumstances. 

Improved Work-Life Balance

One of the most challenging things in the post-pandemic era is drawing a clear line between work and leisure time. You dictate the schedule, workload, and free days in your company.

Thanks to that, you can decide what works best for you and enhance your work-life balance. 

The Great Resignation Could Give Access to Top Talents

The Big Quit is likely the most intriguing workforce phenomenon of 2021. However, it will likely continue in 2022 as more employees plan to quit their jobs.

That could give you access to highly qualified and experienced job seekers, as well as clients in need of help to replace employees that left their companies. 

Vaccination Makes Office Work Safer

Many employers are including mandatory vaccination in their employment conditions. Although you don’t have to take this route, you can introduce initiatives that encourage employees to vaccinate or make the process easier. 

As more people take the shot, workplaces will become safer. Thanks to that, employers will have to comply with fewer regulations, making it easier to roll out on-site work. 

Omicron Might Be the Beginning of the End of the Pandemic

Despite being highly transmissible, Omicron is not as pathogenic. Hence, this variant could be the last stage, opening a path to the future where COVID-19 is endemic, and the world can maintain it under control.

How to Start Your Recruitment Agency in 2022

• Assess your strengths, skills, and experiences to determine your niche – The first step you should take is deciding your unique value proposition (UVP). Think about your offer, solutions, and what will make your recruitment agency different? 

Audit your strengths and past experiences to answer these questions. What skills did you acquire in your previous positions, making you capable of running a successful recruitment agency and providing stellar services?

That should also help you identify your niche and the type of firm you plan to open. For example, if you’ve held executive positions or recruited candidates for senior positions, consider opening an executive search firm. Think about your location and region and how hard it could be to find qualified job applicants and first clients. 

• Identify job seekers’ and business needs – Determine your target audience and their needs and struggles. Job seekers’ expectations have changed in the past two years, and they’re no longer willing to work if employers fail to meet their requirements, such as flexible work and well-being programs. 

When identifying your ideal client, consider their business needs and find ways to close the gap between what they want and what job applicants need. Ensure that you have the relevant insights to avoid turnover and candidates quitting amid the selection process.

• Evaluate your resources and consider financial support possibilities – Before starting a recruitment agency, identify your financial sources and how much you plan to invest. Be realistic and ensure that you can handle unexpected costs and difficulties. Think about the equipment, space, and employee compensations. 

Find information concerning financial support from the government and relevant stakeholders to avoid debts.

• Consider worst-case scenarios when planning and setting goals – Keep a positive mindset throughout the process, but think about the worst-case scenarios. What would disrupt your efforts, and how would you handle it? 

Consider these possibilities when planning and setting short-term and long-term goals. Be realistic and anticipate potential outcomes. Identify efficient strategies that enable you to maintain stability in case challenges emerge.

• Analyze your competitors – Research your competitors and identify how to address the issues they’re overlooking. Audit their strengths and weaknesses by conducting a SWOT analysis. Compare your future recruitment agency and determine what sets you apart and how you can use their challenges to your advantage. 

For example, they might use outdated technology that affects candidate experience and selection process speed. Read reviews, analyze their website, and determine their UVP.

• Establish a sustainable business model – Determine your business plan and whether you’ll take a traditional path or opt for a low-cost approach? Perhaps you want an online startup to avoid unnecessary costs. Whatever you choose, ensure that it’s a sustainable model and set well-defined and transparent services. 
• Develop your marketing strategy and plan – Think about how you’ll promote your recruitment agency, attract top talents, and reach clients. Establish a compelling marketing strategy and leverage social media, innovative tech, and engaging content to increase your outreach. 

Consider digital marketing, advertising, sales promotion, public relations, direct marketing, and in-person sales when setting your plan.

• Determine your values, goals, and company culture – What do you strive to achieve, and what makes your recruitment agency unique? Decide your objectives, company culture, and principles. 

That plays a significant role in how your clients and candidates perceive you. Ensure that your values and mission are unique and genuine.

• Think about what tech you’ll use – Running a recruitment agency requires various tech tools and stable infrastructure. For example, you’ll need an Applicant Tracking System (ATS) to track and manage your candidates. 

You’ll also need a platform to maintain regular and smooth communication with leads and clients, using a recruitment CRM. Decide what technology you’ll use and how much you’re willing to invest in this aspect.

• Choose your workspace – Before you launch your recruitment firm, decide whether you want a virtual or physical workplace. You can also opt for a hybrid approach, combining a digital and in-person office. 

Consider your financial possibilities when deciding this element because each option results in different costs.

• Ensure compliance – Research employment laws and regulations concerning business, especially in the COVID-19 period. You can also hire a professional consultant or lawyer to guide you through the process and ensure compliance. 

Before launching your recruitment agency, find relevant insurance and prevent vicarious liabilities.

• Decide your pricing structure – Identify an effective pricing model and align it with your business goals. For example, most recruitment agencies opt for a flat-rate or commission-based fee. 
• Consider how many employees you require initially to run a stable recruitment agency – Decide whether you’ll work alone in the beginning or hire a team of recruiters. But also consider employee salaries, training, and workplace equipment. Ensure fair compensations and team inclusion. 
• Provide safe and fair work conditions for your staff – Workplace safety is of paramount importance. Therefore, inform yourself about potential office hazards and necessary regulations to protect your employees and provide a pleasant work environment.
• Choose your recruitment agency name and register it – Find a for your recruitment agency, one that aligns with its values and mission. The next step is to finalize the paperwork and make the name official. 
• Decide how to get your first clients and pitch to them – Think about the strategies to attract and land your first clients. How do you plan to present your recruitment agency and its unique value proposition? Decide where you’ll seek contractors and convince them to do business with you. 
• Start building your talent pool – If you’re a veteran in the HR industry, you would probably have access to an extensive professional network and talent pool you can leverage. On the other hand, if you’re starting from scratch, consider how you’ll reach the first candidates and build your database. 

For example, you can use LinkedIn or job boards to reach job seekers.

• Avoid rushing the process – At some point, you’ll probably feel the pressure to position yourself on the market and land multiple clients. But establishing credibility, expertise, and contacts takes time. 

You can use discounts and promotional offers to entice contractors but never rush the process. Be patient, continuously improve, and focus on your goals.

Possible Pandemic Outlooks You Should Consider

The pandemic development affects business plans and stability. It’s essential to track the latest news and keep up with changes to ensure your actions are well-thought-out and that you only take calculated risks. 

According to World Bank, global growth is expected to decelerate markedly from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023. Hence, the Omicron variant will continue disrupting economic activity in the foreseeable future.

On the other hand, the latest developments regarding the COVID-19 show that the pandemic’s grip might become less intense. The governments and public are exhausted from the draining lockdowns and disruptive health measures.

That gives hope that 2022 might be the year we’ll know as the last stage of the COVID crisis. It is also an encouragement for everyone planning to start a business and enter the post-pandemic world as an entrepreneur. 

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Launching and running a stable and profitable recruitment agency takes time, patience, and resources. It seems like a move that could be too challenging to take in the pandemic era.

But doing it despite the challenging circumstances is an empowering experience that could result in you gaining skills you wouldn’t acquire otherwise. Hence, if you start your recruitment firm, prepare for an adventure of your lifetime.

Reduce the struggle by leveraging the latest tech and streamline the hiring process from the get-go. Manatal cloud-based software offers efficient tools, making the candidate and client experiences better and communication more efficient.

Start your 14-day free trial today (no credit card required) and join thousands of recruitment agencies worldwide for which Manatal acts as the backbone of all sales and recruitment operations!