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Recruitment Buzz Panel: With the turning economy, is it a good time to set up a recruitment business?


Since the beginning of the recession five years ago, the UK has slowly but surely been battling against the odds to obtain a healthier economy once again. The good news is that the economy is taking baby steps to recovery, with a recent growth from 0.7% to 0.8% in the third-quarter, according to the Office for National Statistics.

Even more so, the unemployment statistics have decreased by 48,000 to 2.47 million. With jobs being made, businesses hiring, and people getting back into employment, confidence is returning.

At Recruitment Buzz, we wanted to find out if now is as good as any to set up a recruitment business. We asked the experts of the recruitment industry to give us their opinion, you can read their responses below.

Liz Longman | Managing Director | TEAM

“Many TEAM Members have generally been reporting improving market conditions during 2013 and that sentiment has both improved and remained consistent as the year draws to a close.  However 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!

Some of our most successful Members started their businesses in difficult times and there is a lot to be said that if you can make your business work in a recession then you will doubly reap the rewards during better times.  I think that any time is good to open a business if the individual has the required passion and drive. It’s not something you should do just because you think it might be easy!”


Mervyn Dinnen | Content & Social Engagement Strategist for Recruitment & HR

“Whilst there are positive signs of growth in the economy we are still a long way from pre 2008. I saw a stat from the REC the other day showing a 12% increase in permanent placement volume over the last year but only a 2.2% increase in fee value, which means with fee rates being squeezed you’ll be working harder for less!

I think that it will only make sense to start on your own if it’s a perm business and you have really good relationships, a strong network, are able to identify talent quickly, and can have close working relationships with clients who trust your insight and advice. I would also suggest getting client loyalty to your ability by way of a retainer. With procurement driving temp margins so low, and funding difficult to come by, I wouldn’t recommend starting a temp agency.


Lee McQueen | Apprentice Winner, Entrepreneur & Recruitment and Sales Expert

“Definitely, now is a brilliant time. Confidence is returning, not only to business but also to the people that drive a company’s success, their employees. Now is probably the best time for the best part of the last decade to launch a recruitment company, we are seeing movement in the job market, record numbers employed across the UK and many employees looking to move from the hundreds of thousands of part time positions that have kept the economy moving during the recession.

Launching a recruitment business today, and investing in the right staff, will see you reaping the rewards. People have felt lucky to have a job for the past few years with few prepared to take the risks associated with changing jobs. As confidence returns and companies look to invest in their employees, individuals feel confident about the opportunities out there. I am expecting 2014 to be big year for recruitment!”


Azmat Mohammed |Director-General | Institute of Recruiters (IOR)

“Yes, yes and yes.  Everyone has an opinion about the economy but let me offer two facts.  The first is that many successful businesses come out of economically difficult times, the IOR is an example, launched in the middle of a recession.  The second is that recruitment agency activity was never fuelled as a result of employers not being able to hire themselves, it was always about using recruiting partners that fulfilled a role with expertise or resources they never had internally.

Consider this, according to BIS, (the government department for Business, Innovation and Skills), 99.9% of Britain’s businesses are classed as SME (Small to Medium size Enterprises).  And the majority of those have less than 10 people.  So that’s the majority of companies with no in-house recruiting departments and run by busy managers wanting to spend their time running their business.  We know that however slow, economic growth is coming, and we expect sustained growth.  These companies want to grow and they need to hire the right people to do it – that is a huge potential client base.

If you build your portfolio of services to offer on-boarding, assessments, competency based interview training, appraisals, recruitment packs, employer branding support, job advert writing and more, while developing a niche area, you should do well.

And remember, take professional development and getting qualified seriously too, you need the knowledge before you can sell it.”


David Thornhill | Managing Director | Simplicity

“I think the message is “yes it is a good time to set up a recruitment business.”

The industry suppliers have had to reduce fees, so setting up is cheaper than ever. Making sure you know your market though is critical. Know what your clients require and get in at the right price. Research is a must. Cheap systems do not mean cheapest is bad, there are suppliers at good rates.

Get your setup costs right. Outsourcing is the cheapest way to get all the support required to help grow your business. On getting your finance, try not to get into overdrafts and loans, also shy away from annual / monthly minimum fee borrowing. Remember ask the supplier first. Try to plan correctly with finance, as cash is king. Borrow money as ‘pay as you go’ (i.e. you only pay a fee when generating an invoice) this will ensure you know what your profits are and charge correctly with your clients. There are some back office and finance companies out there that do everything you require to take the stress away for starting up.”


Ian Knowlson | Director | Selling Success

“Assuming you are comfortable all the other conditions required to set up a business like, access to capital, business skills, market knowledge and business infrastructure are in place then I would have to say an unequivocal – YES.

The market is rising and job opportunities will soon become increasingly easier to find. They should have a solid network of potential clients with whom to work with. For recruiters their critical success factor will soon be access to the best candidates. So for those looking to move away from their existing employer they might like to just take a look at their own networking and candidate sourcing skills.

If their primary source of candidates is job boards they might like to think again. Within the next twelve months traditional job boards methods of sourcing could potentially become obsolete.

Providing they know their niches, have good client relationships and can source top talent then I’d say go for it! There are plenty of grants out there through schemes like GrowthAccelerator in England, which can help with new businesses. Any questions I’m happy to connect people.”


Bill Richards | Senior Director of Sales | Indeed

“After health and family, a job is the most important thing for most people.  Finding the right job at the right time is one of the most important aspects of people’s lives as it influences their livelihoods. As the UK economy returns to growth there will be more jobs available and job seekers will need help in finding the best jobs to fit their requirements.

Anyone thinking of setting up a recruitment company in order to take advantage of this turning tide must help job seekers find the best jobs in a way that suits today’s job seeker.  For example, mobile devices are increasingly becoming the method of choice for job seekers to search the internet.  Organisations must optimize the recruitment process to take this into account and develop a more seamless application process for the mobile job seeker. Also, an employer’s brand is a vital part of the recruitment puzzle and anyone thinking of entering the recruitment business must understand how the employer’s brand can separate an employer from the competition and engage not only candidates but also existing employees.”


Joe Slavin | Managing Director | Recruitment at Johnston Press

“Are you kidding me? The job market is heating up and GDP will break through the magical 2% barrier meaning companies will be confident to hire and candidates much more willing to take the risk and move to a new gig. It would be hard, dare I say impossible, to fail in an environment like that if you are offering the right product or service. And if you fail, as I have, you are a much better person for it the next time around!

An even better reason to start up – if we in the industry are all honest with ourselves – is that we have to acknowledge that there is no perfect solution to filling or finding a job.

Always remember there’s loads of room for improvement in what is a pretty woeful, dehumanizing, laborious experience for both candidates and employers. Online dating can teach us many things, I am convinced of that.

What types of businesses will succeed in the next job boom? I’d bet on a smartphone solution that offers mapped, proximity search for temps/contractors/casual work and/or involves the use of a smartphone to create an easy to complete application. Social networks marrying with employee referral programs is ripe for success too!

Go for it I say!”


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Over the past 3 years, Rachel has been working specifically within the digital marketing space and has worked with some of the country’s top brands. Drawing on her knowledge and experience, Rachel has developed a genuine understanding of how content can engage and compel an audience.

Rachel is responsible for every aspect of web management, marketing and overall production of the Recruitment Buzz brand and is often called upon for her skills and knowledge of WordPress, email marketing software and social media tools.

Rachel works closely with the Recruitment Buzz editorial team and certainly recognises a good story when she sees one!

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