This article has been submitted by The Recruit Venture Group
There are numerous ‘pros and cons’ to weigh up when you’re starting a recruitment business. Every decision seems to need careful consideration against a list of ‘for’ and ‘against’. Location, branding, target audience, business model…..it’s a demanding process.
High on the list of decisions is the nature of the business and embedded within that is the question of what candidates and roles you will try to serve. Within that is the question of ‘permanent’ or ‘temporary’. “Perm’ or ‘Temp’ ? It’s a conundrum for some well established consultancies, and for the start up it certainly qualifies as one of those decisions that comes with its attendant bunch of ‘pros and cons’.
If there is ‘con’ it’s the one rooted in the potential cash flow problem of having to pay temporary staff their wages before your client pays you. It can happen, but the italics are there because it’s only a possibility. Soundly financed and properly managed your agency, even your new agency, can plan to smooth out those bumps.
What’s far less bumpy is the road that opens up with a portfolio of temporary roles and candidates. Even the most successful of start ups (not to mention up and running businesses) who work exclusively with permanent roles will see the stop and start of income and cash flow related to the placement of candidates. It’s inevitable. There’s no guarantee that you’re going to find a client with a role to fill, identify the candidate for it, get them appointed and then get paid at nice and regular monthly intervals. (That’s the same nice and regular monthly intervals that your overheads and bills become due!).
However, with a client base in need of temporary staff, and a database of candidates looking for non permanent work you have a hugely increased chance of generating a steady flow of work and income; and one that’s much smoother than the peaks and troughs of one off commission payments.
And if further evidence of the potential of the temporary sector was needed it’s there in the figures. Societal and attitudinal changes are fuelling the growth of the contract and temporary arena; it’s worth over £28.5bn.
Yes, there are issues to be aware of. ‘Exploitation’ and ‘zero hours contracts’ are not easy subjects. But, there is no need to be drawn into operating in areas other than the most reputable.
Properly managed and carefully planned a strategy based on temporary appointments can generate reliable revenue. Temporary roles can make your new recruitment business decidedly permanent!