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How to Start the Successful Recruitment Agency


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The market of the recruitment agencies is highly competitive. The new start-up has to analyse the services provided on the general market, it has to make the analysis of direct competitors, it has to set up its internal processes and systems. The agency has to make a decision about the segments and sectors. Additionally it has to make a tough decision about the additional services offered to clients.

Published in: Business, Technology

How to Start the Successful Recruitment Agency

  1. 1. How to start thesuccessfulrecruitment agency?How to entersuccessfully the highlycompetitive market ofrecruitment agencies?
  2. 2. EXECUTIVE SUMMARY1 OFFER OF THE RECRUITMENT AGENCY 2 RECRUITMENT MARKET ANALYSIS 3 BEING UNIQUE 4 NEW HORIZONS GROWTH AREAS How does the How big is my How can I avoid recruitment market? What should my the direct agency become Who are my competitive competition with profitable? clients? advantage be? other agencies?This section covers You will identify the The competitive Understanding tothe key services, landscape for the advantage is the trends in thewhich the recruitment agency. critical success recruitment andrecruitment agency You will be able to factor. What staffing is theoffers. It compares identify the key services can the essential part of theproducts and market drivers for agency offer to success. Whatservices. The the successful make its portfolio services should aagency has to employment unique and modernidentify its niche. agency. interesting? recruitment agency offer?
  3. 3. ABOUT CREATIVE HRM1.  Creative HRM offers information about the development of Human Resources. It brings fresh information about HR Trends, uncovers HR Buzzwords and helps building the modern HR Function.2.  Feel free to visit Creative HRM.
  4. 4. CONTENTHow to start therecruitmentagency?
  5. 5. CONTENT1.  What does the Recruitment Agency offer?2.  What is the market of the Recruitment Agency?3.  Business Opportunities for the Recruitment Agency4.  Building the competitive advantage5.  How to download this presentation
  6. 6. OFFER OF THERECRUITMENTAGENCYHow does therecruitment 1agency becomeprofitable?
  7. 7. TRADITIONAL RECRUITMENT AGENCYBUSINESS Database Search Executive Search Recruitment Agency Recruitment Process OutsourcingMost recruitment agencies do use the standardized set of services. They build no competitive advantage.
  8. 8. DATABASE SEARCH •  Database Search is the most common serviced provided by the recruitment agency •  The agency receives the job vacancies from its clients and advertise them using different channels •  The agency builds the database of job applicants and offers them to clients •  The agency gets paid just for successful placements •  Easiest, but the riskiest business of the recruitment agency
  9. 9. EXECUTIVE SEARCH •  The executive search is a highly focused search of the skilled and experienced employee, who is employed at the competitor •  The executive search is usually paid in three installments •  The client has to trust the agency •  The margins are high, but the number of vacancies is limited •  Extremely difficult service for the new recruitment agency; it has no successful placements to be used as the reference
  10. 10. RECRUITMENT PROCESS OUTSOURCING •  RPO is the best mass service, which can be offered by the recruitment agency •  The agency takes over the end-to- end recruitment process from the client, and charges the regular monthly fee •  Highly sophisticated service, which needs a strong software support •  Most agencies do not have sufficient resources to offer the full RPO
  11. 11. SERVICES COMPARISON High Recruitment Executive Process Search Outsourcing Profitability Database Low Search Low Competition HighThe database search is easiest service to start with, but it offers low margins and all competitors offer the same.
  12. 12. RECRUITMENTMARKET ANALYSISHow big is mymarket? 2Who are myclients?
  13. 13. MARKET: WHAT TO ANALYZE? How many agencies do operate on the market? How many of them are specialized? What is the informal feedback? Recruitment Agencies Job What are the common terms and conditions? How many vacancies do they offer? Market Businesses What is the unemployment rate in my area? Job What universities are in my area? ApplicantsHow many businesses do operate in my area? What positions are people looking for?What positions are they advertising? Which company is the employerWhat agencies do they use today? of the first choice?Do they outsource their recruitment process? What is the salary offered to fresh graduates?Do they use any agencies exclusively? Which job portal is the best known in my area?
  14. 14. DIRECT COMPETITORS •  The direct competitors define the standards. The new agency has to offer better service than direct competitors. •  The analysis of the services and clients will help to focus services and offers in the right direction. •  The competitors define the structure of fees, and the new agency has to be able to compete with the structure of fees. •  The direct competitors will protect their services and will fight against the new comer.
  15. 15. POTENTIAL CLIENTS •  The agency has to make a proper estimate of the size of the local market •  It has to identify the key clients, which has to be targeted with the tailored offer •  The agency needs to analyze the job vacancies required and the common recruitment channels used by companies •  The agency has to analyze the structure of the workforce at potential clients as it can propose the right structure of fees and time to hire •  The agency can project the cash flow and number of recruitment specialists needed, if it wins bids for vacancies
  16. 16. JOB APPLICANTS •  The recruitment agency has to analyze the potential of the local job market. It cannot offer skills and competencies, which are not locally available for mass job vacancies. •  The recruitment agency has to analyze the offer of local universities, as it can grab some talents with no previous working experience. Many companies are interested in this workforce. •  The agency has to analyze the most common recruitment channels, and has to build its own channels, which can target interesting candidates.
  17. 17. YOUR PERSONAL NETWORK •  The recruitment agency has to keep and develop the active networking group. The satisfied clients are the best reference for the agency. •  The agency has to ask for references and instant feedback, as it keeps the constant quality of provided services. Each successful placement should be known to the network, as they do not forget invite the agency in case of difficult job vacancies. •  The recruitment agency depends on the quality of the network, it can build around its employees. The employees should be incentivized to enhance their network of useful contacts.
  18. 18. BEING UNIQUEWhat should my 3competitiveadvantage be?
  19. 19. PROCESS EXCELLENCE •  Most agencies do not focus on the process excellence. The agencies do not commit to deliver the first candidate within a defined time. The agency, which is able to promise the delivery of the first candidate, is building the trustful relationship with the client. •  The process excellence requires a strong software support, as the agency can track all open job vacancies. •  The regular feedback and asking for the feedback is not a nice extra, but it can help to improve provided services by the agency. •  The process excellence seems to be expensive, but it can have a huge positive impact on revenues of the agency. •  The small start-up employment agency can use humans for managing the recruitment process, but it has to be switched to the optimized software solution as soon as possible.
  20. 20. PRICE •  The price competition is not a successful strategy for setting the recruitment agency. The competitors have a stronger cash flow and higher reserves. •  The competitors will always react on your competitive offers to their clients. They will choose several job vacancies, which are crucial for the client and will offer the highly competitive package. •  No agency can run without any fixed costs and they are almost the same of all competitors. The space for the price competition is highly limited. •  Once the agency cuts prices of its services, it cannot increase them back easily. It cuts its income, but does not get the additional volume in return.
  21. 21. DIFFERENT APPROACH •  The recruitment agency should choose different competitive advantages: –  Specialization –  Quality of the service –  Access to different talent pools •  These approaches are difficult to copy. They build the unique position of the agency on the market. •  The clients value a different approach, as they feel the difference in services provided.
  22. 22. NEW HORIZONSGROWTH AREASHow can I avoidthe direct 4competition withother agencies?
  23. 23. SOCIAL MEDIA RECRUITMENT•  The social media recruitment is the fast growing recruitment area. It combines the knowledge of the recruitment, psychology, sociology, communication skills and Information Technologies.•  The social recruitment influences other target groups and can bring new, interesting and innovative talents to organizations.•  Most fresh graduates and college students do search for a job using social media and networks of their friends.•  Social media recruitment requires the unique know- how and most recruitment agencies are not able to combine the HR expertize with the IT knowledge.•  The agency, which is able to utilize the full potential of the social recruitment, develops a strong competitive advantage, which is hard to beat.•  It is hard to achieve initial results and build the strong position in social media, but the performance lasts for a long time.
  24. 24. SOCIAL RECRUITMENT OUTSOURCING•  The social media recruitment requires a strong and consistent presence of the company in social media.•  The organization has to focus on building targeted and engaged audiences, but it cannot afford to allocate the fulltime employee to these activities. It is x-border HR/Communication/Marketing.•  The agency can outsource the recruitment communication in social media from its clients and it can build a strong additional stream of revenues.•  It can develop their online communities and it can use them for hiring new talents.•  It can bill clients on a monthly basis. The small amount per client can build a strong and consistent flow of additional revenues. It can build a real competitive advantage over its competitors.
  25. 25. DIVERSITY IN RECRUITMENT•  The diversity is a hot topic for many organizations. The diverse teams have a higher stability and performance than the unified teams.•  The recruitment agency can focus on finding diverse talents for its clients.•  Many companies do prefer younger candidates, but mature businesses usually want to build diverse team, and they can prefer the employee, who is 50+.•  This specialty can be a strong competitive advantage, as the agency builds the unique position on the job market. Its name can be well known and well recognized, because of its different target group.•  The diverse recruitment will enjoy a huge growth in the near future.
  26. 26. DOWNLOADADDITIONAL INFOHow can Idownload thispresentation?Anything else?
  27. 27. DOWNLOAD//INFO//THANKS•  In case you want to download this presentation, please visit Creative HRM and click HR Presentations section•  Additional Info: –  Follow Twitter, Facebook or Google+•  Finally, thank you for reading this presentation