Recruitment agency as a business: the intricacies of the work of a personnel selection enterprise

Recruitment agency - definition of the concept and pricing policy

A recruitment agency is an organization that professionally mediates between the applicant and the employer.
The essence of the work of a recruitment agency is that the employer pays for assistance in searching and selecting personnel that meets its requirements, and the applicant, in turn, is helped to find a suitable job for free in accordance with his wishes. The amount of the fee that the employer pays for the search for personnel depends on the amount of earnings of the future employee. Usually, this is a certain percentage of the future employee’s monthly salary or his annual salary. The cost of recruitment agency services is determined based on the level of vacancy, level of service, type of selection technology and quality.

In essence, a recruitment agency is a database of employers’ requests and job seekers’ proposals, and the larger this database, the more proposals this agency can offer to both parties, the more reputable it is considered.

There are several types of recruitment agencies:

employment agencies - their profits are generated from contributions from people who contact the agency to find work;
recruiting agencies - the company’s services are paid for by the employer, for whom the agency selects competent personnel;
headhunting agency - aimed at finding narrow specialists.

The difficulty of the personnel business is that the agency cannot guarantee the effective work of the selected personnel after employment. It is important for headhunting agencies to have a strong client base and business acumen in order to lure the right specialist in a short time. For entrepreneurs who want to buy a recruitment agency franchise, everything is much simpler. After all, they should work using technology that has been proven over the years, which satisfies the needs of customers and brings considerable profit.

Expenses and income

The business plan of a recruitment agency includes the following expense items:

Furniture – 10,000 thousand rubles.
Office equipment (computers, printers, phones) – 100,000 rubles.
Safe for documents – 30,000 rubles.
Registration and receipt of documents for work – 20,000 rubles.
Consumables – 20,000 rub.
Advertising – 50,000 rub.
Website creation and promotion – 50,000 rubles.
Signboard – 20,000 rubles.

In total, one-time costs will amount to RUB 300,000. There will also be monthly costs. Expenditure:

Staff salary – 90,000 rubles.
Rent of premises – 40,000 rubles.
Tax deductions – 30,000 rubles.
Advertising and website content – 50,000 rubles.
Consumables – 10,000 rub.
Communication services – 5,000 rub.

Total monthly expenses will be another 225,000 rubles. You can predict income depending on the region, field of activity and quality of services.

Typically, the income of a recruitment agency consists of a percentage of the salary of the specialist found. If the application was made by an enterprise, the amount of remuneration can reach 20% of the annual salary of the hired employee.

When the applicant himself contacts a recruitment agency and is subsequently employed, the remuneration is usually paid in a fixed amount and amounts to a monthly salary at the new place of work. More preferential conditions may be offered, for example, 50% of the salary. Additional sources of income:

Referral payments from NPF. For example, an agreement is concluded with a future employee to transfer pension payments to a non-state pension fund. The agency has a fixed income paid by the corresponding fund.
Conducting training sessions for job seekers.
Drawing up a professional resume, translating it into a foreign language.
Consulting services.

Experts predict the payback of the recruitment agency project within six months. Sometimes three months of work is enough. According to estimates, the agency’s profit in the first months can reach 100,000 rubles.

At first glance, the job of finding candidates seems easy. But a lot depends on the reputation of the recruitment agency. Personnel selection must take place at a professional level and in the shortest possible time.

Recruitment agency and employment bureau

What is a CA and an employment agency and what are their differences, we will reveal in this article. Until now, many job seekers and employers stubbornly call these two different types of companies under the same concept “recruitment agency”. And some employment companies often call themselves a “recruitment agency,” which contributes to the general misconception. Let us define each of these companies.

What does employment through a recruitment agency look like?

Employment through a recruitment agency is difficult due to the strict requirements for candidates for vacancies established by the employer.

What is an employment agency

An employment agency is a commercial organization that receives income from the applicant for providing him with services: 1) finding a vacancy for him at the enterprise in which he was then hired; 2) for providing him with information about vacancies of enterprises (certificates of vacancies). The service provided by such a company is provided only to the applicant as a client, so the applicant pays the employment agency. The employing company is not provided with a service, so it does not pay for the selection of a specialist who is hired with the help of an employment agency. Other names for similar companies: employment bureaus and labor exchanges.

How to become a HR manager

Unlike new professions (for example, pictorial artist), HR is taught in both universities and colleges. Many universities have a major in “Human Resources Management”. The specialty "Management" is also suitable.

If you do not have a specialized education, but have experience working with people and a degree in psychology, economics or sociology, you can also safely submit a resume for the desired position. Of course, work experience will be required.

Finally, you can take specialized courses, which are available in abundance on the Internet. These can be online and offline courses in education centers or universities. Here are some of them:

Prestige (Moscow);
“HR Manager” at the Interregional Academy of Industrial and Construction Complex;
“HR Manager” at the Russian Institute of Vocational Education;
“Human Resource Management” at the Modern Science and Technology Academy.

Similar courses can be found in every major city - just study the offers of search engines.

What are the differences between recruitment agencies?

First, let's understand the concepts. Employment agencies, staffing agencies, recruiting agencies - is there a difference between them and what does it consist of? Recruitment agencies are the general name of companies that provide certain services related to personnel (whether it is personnel selection or, on the contrary, employment). Recruiting agencies search for employees for various companies and enterprises. That is, their clients are the companies themselves, and not specific people. Employment agencies search for suitable vacancies for people who contact them. Here the clients are specific individuals who are looking for work.

There is also such a specific direction of personnel organizations as headhunting (headhunting). This is a search for true masters of their craft, professionals with extensive experience, highly qualified specialists. Now more and more recruitment agencies are switching to a mixed type of activity, that is, providing services for both job seekers and enterprises. But still, employment services for individuals are not available from all agencies. Working for enterprises is much more profitable for them financially, which is why the main emphasis is placed on this type of service.

How to make a career as an HR manager

Let's start with the fact that getting this position is not a problem at all. There are HR departments or a vacant position as a recruiter or clerk in almost all companies. So, if you have the appropriate “crusts”, the path is open!

You can even get a remote job. Thus, for the query “HR manager” as of November 2020, out of 4,911 vacancies, 342 remote work offers were found.

If you are a beginner, the most obvious and easiest way to start your career is to join a small company or recruitment agency. There you will learn in practice and in a short time everything that was taught at the institute. You can also try submitting your resume to a larger organization—for example, as an assistant HR manager or recruiter.

In the future, by improving your professional skills and developing, you can move to larger companies and agencies. Or build a career in one company, climbing the career ladder from junior assistant to senior manager. And even to the head of the department.

The highest step of the career ladder is a transition to the top management of a large company. For example, for the position of HR director. Or opening your own recruiting agency.

Scheme of interaction with employers

A recruitment agency receives a request from a client company to fill a specific vacancy/vacancies. In this case, the agency must receive detailed instructions regarding what knowledge, skills and qualities the candidate must have. Work experience and level of education often also play an important role. Some even make demands on gender, age, and marital status.

After receiving all this information, the recruitment agency sorts the resumes of applicants that are already in the database and selects those that meet all the employer’s requirements and are potentially suitable for the applied position. Usually about 5-7 applicants are selected. If there are no suitable options, or there are not enough of them, then advertisements for open vacancies are published on various job search resources. Moreover, the advertisements indicate the contacts of the manager who represents the recruitment agency, and not the contacts of the employer. If a company has turned to a recruitment agency for a service, it means that it does not want all applicants to call it in a row, but is waiting only for those who will actually apply for the position. The name of the company that is looking for an employee is most often hidden by the recruitment agency.

All suitable candidates for the position are then invited for an interview. First, it takes place in the recruitment agency itself. After it, a certain number of applicants may be eliminated. All applicants approved by the agency are already sent for an interview with the employer. If one of them is approved for the position, the company pays the recruitment agency a fee for the services provided. According to the terms of the contract, sometimes the fee can be paid only after the candidate has completed a probationary period. If he does not pass it, the recruitment agency begins the search for the position again. The fee usually ranges from half to two full monthly salaries of the found employee, depending on the specifics of the activity.

Scheme of interaction with applicants

People turn to recruitment agencies for help for various reasons: some are already desperate to find a job on their own, some simply don’t want to bother themselves with searching, others are convinced that they can find the best vacancy through an agency. One way or another, when contacting an employment agency, you need to understand that the very fact of applying there does not guarantee that they will find a suitable vacancy for you and get you a job. It often happens that a candidate is denied all potential jobs, no matter how hard the agency tries. In this case, the person remains without work, but he will still have to pay for the services provided by the agency, at least consulting ones.

What is the basis for how agencies work with applicants? The candidate applies to a recruitment agency, where specialists interview him. Its goal is to find out what position the candidate is looking for, what requirements he has for it, what salary he would like, what ambitions he has regarding building a career and other important points.

Next, a high-quality resume is compiled. Composing a resume so that all the positive aspects are highlighted, attention is not focused on the negative ones, and with all this the summary is absolutely truthful is not so easy. This is why most resumes that candidates write on their own are not competitive. In some cases, it is necessary to translate a resume into a foreign language. This can also be done by a recruitment agency; of course, all services are paid.

The resume is entered into the recruitment agency database, and an interview is conducted with the applicant. At this stage, the manager of the recruitment agency will already have a certain picture of what the candidate is like and which company can actually hire him. Then specialists begin searching for suitable vacancies.

A good agency has its own extensive database of enterprises that are looking for personnel in various specialties. The manager compares the “portrait” of this applicant with the available vacancies, from which those for which he can apply are identified. Information about the candidate is sent to these companies, and then they conduct an internal interview with the organization. The decision to accept or not accept a job is made, of course, not by the recruitment agency, but by the company, which is a potential employer. When an applicant has been hired for a position, he pays the recruitment agency a fee for services rendered, usually a percentage of the monthly salary (from 25% to 100%). Less often, agencies set a fixed fee amount.

To avoid deception on the part of the client, the recruitment agency enters into an agreement with him at the very beginning of cooperation, which spells out all the responsibilities of the parties. Sometimes the terms of the contract stipulate that the fee will be paid only after the candidate successfully completes the probationary period at the company. Recruitment agencies can also provide purely advisory services. For example, regarding career building, methods of searching for vacancies, principles of successful interviewing. The client can use these services at will, and all of them are paid separately.

Such schemes of interaction with clients are used by the vast majority of recruitment agencies. Headhunting agencies have their own specifics. First, they need to have an extensive database of all top managers in the city. Information about such specialists contained in databases is most often exclusive and must be protected. Secondly, the people who are included in such a database are professionals in their field who rarely sit without work. Therefore, recruiters are faced with the task of not only selecting a suitable candidate, but also persuading him to resign from his current job in favor of the advertised position. This can be very difficult, but the reward for successful provision of services is also very high.

What a job applicant needs to know when working with spacecraft

Like any company, recruitment agencies have different specializations. This is worth paying attention to before you start interacting with them.

The most common direction is the selection of line and management personnel. From such agencies you can find vacancies for accountants, commercial directors, production technologists, etc.
Executive search. These recruitment agencies, as a rule, do not post vacancies on the website, since their main task is to recruit very high-level personnel or unique specialists, of which there are only a few in the country. They are often approached by companies that want to find a replacement for an existing employee. Such vacancies are not advertised, and the company name is announced at the very last moment.
Taking into account the rapid development of the IT sector, agencies have appeared relatively recently that recruit only IT specialists.
Mass recruitment. Such agencies select warehouse workers, merchandisers, specialists who work on a rotational basis, etc.
There are also individual CAs that specialize only in the selection of domestic staff, such as maids, married couples, housekeepers, etc.

Fact No. 1

The first and simplest fact! Everyone should mind their own business - you with your work, the recruiting agency with yours! If your task is to engage in sales of steel pipes, for example, then monitoring and organizing the process of hiring new pipe sales managers is of course interesting, but there are other and more important tasks. Organizing your full-time HR employee (if you have one) to recruit new employees also requires effort and money (paying for job postings, etc.). Let’s not forget about the time you will spend on the process instead of more productive work. Conclusion: It’s easier to contact a recruiting company (personnel selection agency), set a task and agree on payment for services. And after a short time you will receive a pool of candidates already selected from hundreds, if not thousands of applicants, from which you will choose the more worthy or worthy. Saving both time and money!

Fact No. 2

Knowledge and experience. The recruitment agency is an expert in the personnel market and is well versed in salaries, tasks, requirements, experience and other factors when selecting the required employee. Thousands of reviewed applicant profiles, telephone conversations, meetings and interviews give the agency real working experience in selecting the “right” candidate. Managers with many years of experience in recruiting employees are able, even through a telephone conversation at the initial stage, to cut off most of the unsuitable candidates, and interviews cut off another part because during interviews, a personnel manager with the skills of a psychologist instantly identifies problem areas of candidates and solves them. Is there any point in sending this applicant to the customer? There are a lot of similar nuances, there is no point in describing everything.

If you are recruiting personnel yourself, then there is no guarantee that your employee who will lead this project has all the necessary skills and will be able to correctly “identify” exactly who you need. It is likely that you will distract this employee from his sector of tasks, and he will search for candidates without the desire and necessary skills; the result in this case is extremely unpredictable. Conclusion: You shouldn’t spend a lot of effort and not always be satisfied with the result; it’s easier to contact an agency and order recruiting from a player in the market for this service.

Fact No. 3

Compliance with the position and reliability of applicant data. In continuing the question of looking for an employee yourself or contacting an agency, you must also not forget about the fact of frequent discrepancies between the data in the resume and reality. Our agency and our managers constantly encounter cases of deliberate distortions in the resumes of data by applicants. Such “risk zones” include qualifications and knowledge, experience and reasons for changing jobs, compliance with the exact line of activity for which the applicant is applying, etc. An experienced manager already has a “trained” eye for such important points in the resume itself, not to mention already about the interview with the candidate. Many inconsistencies are revealed, and they cannot always be accepted and understood. Likewise, “calls” from former employers provide more than interesting information about the applicant. We have to weed out candidates. Whether you or your employee will be able to take into account and identify all the inconsistencies and false information is difficult to predict, but there are quite big risks at this stage. Conclusion: Determining the reliability of an applicant’s data is difficult; this requires knowledge, skills and experience. You can identify the “problem areas” yourself or it’s better to turn to specialists – it’s up to you.

Fact No. 4

Speed of employee selection. The recruitment agency has worked out all the processes of finding the right candidate, from the personal database of applicants’ resumes to the subtleties and tricks of searching for a future candidate, both on job sites and social networks. Immediately upon receiving an application for recruitment, the agency manager already has in his head a clear plan of action to find the desired employee. The manager is INTERESTED in “closing” the application quickly and efficiently, since his earnings depend on his speed of work, and he will apply maximum knowledge and experience to quickly select an employee. Accordingly, the agency’s developments, manager’s developments, experience and other professional tricks will allow you to find an employee much faster than if you search yourself. If you are trying to find an employee on your own, then you need to understand that this will always be a longer process. The time will depend on the experience of the person who is looking, understanding where to look, time for communication and correspondence, initial interviews, etc. Conclusion: If you need an employee quickly, contact the agency; if time is not of the essence, you can try to find candidates themselves.

Fact No. 5

Your time. The recruiting agency takes on the most time-consuming part of the candidate selection process. We save your time, which costs money, and help you not to miss out on profitable deals and opportunities. We act as the primary filter for a huge mass of “wrong” applicants, and you get a ready-made list of exactly those with whom you should interview and choose the best one! Average statistics show that you can spend up to 150 working hours searching for one employee. Whether this is a lot or a little for your company is up to you to decide. Conclusion: Do you feel sorry for wasting your time and that of your employees? – entrust the selection to the agency. There is time and there are employees who can be involved in the search and selection - try, but it certainly won’t work faster.

Fact No. 6

Confidentiality. You work in a competitive environment and must always be on top! If you entrust the selection to a recruitment agency, then it will act as a buffer that filters information about your company and the required employees. It is not always worth posting publicly available information that you need staff, much less mid- and senior-level staff. Nothing can be hidden on the Internet, and information about yours and in the format of searching for specialists. Whether it is worth advertising the recruitment of employees on your own behalf is a serious question and it is up to you to decide. By the way, be sure to take into account the fact that “unsuccessful” candidates, after interviews in which you rejected them, very often write reviews, mostly negative ones, on specialized sites, thereby spoiling your image. There will always be those offended! If an agency works, then it takes on all the negativity and maintains confidentiality both for candidates until the final interview and for your competitors. Conclusion: Whether it is worth advertising your company and posting vacancies on your own behalf and with your contact information, or contacting an agency and working confidentially, is an open question and requires your decision.

Fact No. 7

Savings and money. Cost reduction and savings are the cornerstone of any business. What are the advantages of working with a recruitment agency:

Savings on staff. You do not hire an employee for personnel selection or do not involve a related employee for the search (in the first case, savings on salary + taxes on it + indirect costs for the employee (VHI, travel, mobile communications, etc., depending on the compensation system in your company), in the second, the savings are indirect, because the employee will not have time to do his own work, and will search as best he can and will most likely ask for a bonus or additional payment for additional work).
Savings in the workplace - if you hire an employee for selection, he will need a workplace, a computer, a telephone, and an office - no one has canceled overhead costs.
Saving on services. Posting a vacancy costs money, and a lot of it if we are talking about serious job sites like HH or Superjob. It is unknown how long it will be posted; you will pay for each month. And this is also unnecessary paperwork - contract, invoices, payment, closing, etc.
Savings on the cost of selection services from the agency:

For example, our agency has set a margin of 7-12% for the selection of any employee (average market prices are 12-20-25% depending on the candidate’s position). We work for the future, and we are interested in long-term cooperation rather than one-time profits. You can find an agency that suits your costs.
Volume discounts. Typically, the more positions required, the greater the discount for recruiting one employee.
Stock. You can always take part in promotions from agencies and get additional savings.
From urgency. Longer selection periods allow us to negotiate additional fees. discounts.
From the position. For example, the selection of line personnel can be negotiated not for a percentage of the annual salary, but for a fixed amount, which is more than profitable.
Cumulative discounts for regular customers. If you work long-term, you can get serious discounts on selection.

Conclusion: Organizing the search and selection of employees on your own does not always allow you to save money, and often, on the contrary, increases your costs, especially indirect ones, which are not always on the surface. When ordering a selection from a recruiting agency, the savings can be quite significant.

Fact No. 8

Contractual relationship. When working with an agency, you enter into a formal Agreement with clear definitions of responsibilities, deadlines, tasks and guarantees. If you choose on your own, everything falls on you. Conclusion: Decide whether to conclude an Agreement or use your internal resources, and not be able to influence the final result (there will be no one to ask).

Fact No. 9

Guarantees. When working with an agency, you receive guarantees for the replacement of employees who were hired through this agency. The agency will promptly provide a free replacement during the warranty period, and it did not matter whether the employment contract was terminated at the initiative of the employer, or whether the initiator was the employee himself. The recruitment agency bears all costs for a new search. With self-selection, there is no question of guarantees and if, for example, your employee did not select the right candidate, and he either quit or you decided that he could not cope, then you will have to start all over again and look for a new candidate. Conclusion: It’s easier to have a guarantee and a free replacement from the agency than to look for a new candidate if the candidate changes and spend both time and money on it.

Fact No. 10

Payment for services. Our recruitment agency takes payment for services only after our candidate starts working for your company a few days after official employment. You don't pay any advances! You pay for the result! If you are looking for employees on your own, then the costs of organizing the process will start from the first day. Conclusion: Payment for results and after the fact or costs from the first day - compare the situation and decide what is more profitable.

Fact No. 11

General process. When working with an agency, the process is clear and simple - application, contract, selection, going to work, guarantee. When organizing the process on your own, there are a lot of nuances. Who, how, at what time, where to pay, who to invite, how to organize, etc. It takes a long time, it takes time, the performer is not always ready to work, there are many pitfalls, there is not enough experience, etc., etc. And this is time, nerves, money. Conclusion: Think about it – is it more profitable for you to do it easier or take longer? Is the final price you pay to an agency or when searching on your own comparable? Just count all the costs, both direct and indirect.

Fact No. 12

Modern trends. Outsourcing In recent years, throughout the world in general and in Russia in particular, there has been a trend to outsource non-critical or costly internal tasks. This is caused primarily by saving resources and optimizing the activities of companies in order to focus on key activities without being distracted by resolving internal issues. That is why services for remote accounting, courier delivery, asset management, etc., and, of course, recruiting began to develop extremely quickly. It is much easier to outsource non-critical tasks to an external company, have a contract and get results with a guarantee and savings! Conclusion: World and Russian experience shows that it is easier to outsource non-core tasks of your company. Maybe it's worth a try?

When does a company turn to a recruitment agency?

When an employer has a need for personnel, he can find a person on his own or contact a recruitment agency. The reasons are completely different. For example, a company needs to find a highly qualified specialist in a rare profession or quickly employ several good specialists. And it also happens that the company itself is small and rarely does anyone leave it, so the HR department simply does not have access to closed databases with potential candidates and it is easier for them to contact a recruitment agency that will help them quickly find a suitable candidate.

What happens next?

When agreeing on conditions, the customer and the AC discuss not only the requirements for candidates, but also the conditions for “replacement”. What it is? Replacement is a guarantee that if an employed employee quits of his own free will or does not complete the probationary period, then KA will select a new specialist free of charge. The guarantee period can vary from 1 to 6 months, depending on the position. Therefore, CAs are extremely interested in your completion of the probationary period and, in order to keep their finger on the pulse, they periodically contact you and ask how you are doing and if everything is in order.

Main stages of personnel selection

Practice shows that before inviting the best candidates for an interview with representatives of the customer, a recruitment agency must carry out several main stages of personnel selection:

screening of applicants' resumes
tests to assess performance and personal qualities
telephone interview
1-2 meetings with qualified candidates

A recruitment agency, having a list of people who have passed all stages of selection , can be confident that it is presenting worthy candidates to the strict judgment of its customers, for whom they will not have to receive criticism in the future and, perhaps, even lose the order. Identifying good applicants to meet with employers is the agency’s main trump card, its opportunity to prove its professionalism.

How to Interview Candidates

When interviewing a candidate, the main task of the HR manager is to determine the degree to which the candidate meets the employer's requirements. Of course, professional qualities alone are not enough. The freedom of modern specialists and the attitude towards work of the younger generation is associated with a constant change of job in search of a better place. There is nothing wrong with this, and the number of faithful people who devote many years to their enterprise is becoming smaller.

And organizations themselves do not always have a modern view of the working conditions for their employees, and therefore, acting in the format of “there are no irreplaceable people,” they do not care about maintaining a constant composition of employees. An interesting situation arises when a company, from which employees are running away, wants to find a specialist who has worked in one place for at least several years. This desire is understandable, but the real benefits, expressed in many years of useful work and achievement of professional heights, are received from their employees by those companies that try to create conditions for personal growth and development of their employees.

There are not many of them, and who want to get into these ranks . Having a huge choice, such organizations, realizing that mere compliance with professional skills is not enough, measure their candidates on all possible indicators. A detailed assessment of the qualities of applicants allows you to hire the most suitable employees, eliminating the risk of their subsequent departure and poor performance. Taking into account the modern requirements of employers, recruitment agencies are forced to engage in detailed incrimination of data about candidates.

Perhaps the unsuitable applicant will be of interest to other employers , so you still need to collect complete information about him, rather than chase him away again later. Built in this way, a fairly universal system for collecting information about the applicant allows us to say with confidence that every correctly conducted interview will contain questions that allow the HR manager to assess the following qualities of the candidate:

professional knowledge and skills
education and literacy levels
level of interest in job search
attitude to work
willingness to move for a good job
ability to develop and acquire new knowledge
frequency of job changes
psychological assessment
communication skills
stress resistance
place of residence, marital status, presence of children

The recruitment business is highly competitive, forcing specialists to constantly improve their professional skills. Understanding the work of companies, one comes to the understanding that working with people always represents a great responsibility . A recruitment agency takes people's destinies into its own hands, guiding them into the future. This is an important role in modern society, the importance of which will only grow over time.

What documents are needed to open - registration and registration

When starting a business, it is best to register as an individual entrepreneur. Unfortunately, many recruitment agencies do not even consider this possibility and immediately open a limited liability company. But this procedure is more protracted and requires more money.

Which OKVED code should I indicate when registering a recruitment agency?

When registering a business, you can specify two OKVED codes:

OKVED code 74.50.1 - provision of employment services;
OKVED code 74.51.2 – provision of personnel selection services.

But, if you, for example, are opening a theatrical or artistic recruitment agency, then you need OKVED code 74.84. There are other nuances that you need to be aware of when indicating OKVED codes.

HR agency tax system

For a recruitment agency, UTII is more suitable - a single tax on imputed income. Although you can choose the simplified tax system and pay 15% of the total profit or 6% of the net profit.

Do I need permission to open a recruitment agency?

It is believed that such a business is easy to organize, since no special permits or licenses are required for this. But in order to start work, you will need to obtain conclusions from the State Fire Inspectorate and the SES. This is a must if you are renting a premises.

How to open your own agency from scratch: step-by-step instructions>

It’s worth deciding:

With the direction of activity.

With financial capabilities (you will need money for registration, rent and arrangement of an office, paying bills and salaries to employees for at least two months before the company brings in its first income).

With the presence of certain acquaintances and contacts in the chosen field .

With the name of the future company.

Office organization and start-up investments

The advantage of this type of business is the ability to start with minimal capital. So, the main costs of what it takes to open a recruitment agency include:

Renting premises . The office can be small, the main thing is that it is located in a convenient place that clients can easily find. The rental price depends on the location. For example, in the center of Moscow, an office with an area of 14 square meters will cost you from $750, in the center of Kyiv from $280, and in Minsk from $126. To conduct interviews, a separate room or the possibility of zoning the space is required.
Repair (if necessary) . This may include wallpapering, installing blinds and small decor (from $200).
Furniture . For one workplace you will need a desk and at least two office chairs (from $250). You also need a wardrobe, a clothes hanger and a sofa for waiting visitors (from $350).
Computer and office equipment . Each workstation has its own PC (from $200). Printer and scanner can be shared (from $60).
Telephone and Internet (up to $10 per month).

Thus, the cost of renting and furnishing an office for two employees will average $1,800. To open a recruitment agency in a small town you will need less money, and if you are just taking your first steps, you can conduct interviews in cafes or coworking centers and work on finding a home.

Registration

To create an agency you will need:

Register as legal entity (“LLC” or “IP”) and open activities for the recruitment agency.
"IP" is suitable for a small company with one owner, with several co-founders - "LLC".
After registration, select a tax form.

Open a current account.

If you work with employers and job seekers abroad of the Russian Federation , you will need a license for this type of activity. According to current legislation, a license is issued for 3 years.

Office

Initially, you can even work from home, if you have access to the Internet (for example, the sites Headhunters.ru, Superjob.ru, JOB.RU, etc.) and a room for interviews. But for full-fledged work you need an office.

It is worth renting an office in a place with good traffic, preferably in the center. But not in the retail space, but where other offices are located. It's good if there is parking nearby.

To begin with, one or two rooms with a total area of 10 – 40 sq.m. will be enough.

Depending on the condition of the premises and the condition of the furniture supplied with it (if any), you will need funds to put the office in order, organize workspaces, and places for interviews. The office should be comfortable and inspire confidence in you and your organization.

Necessary equipment

You will need:

Computers by the number of people working for you.

A printer. Better than an MFP (scanner-printer-copier).

At least two telephones with numbers connected to them: for incoming calls (tariff is not important) and for calling future clients (with unlimited communication).

Access to the Internet

A fax may be required. But lately, the Internet has been increasingly used to quickly transfer documents.

State

First of all, managers will be needed. People with experience and appropriate education, sociable, persistent, and active are suitable here.

At first, you don’t have to hire an accountant, but invite a freelancer if necessary.

The same applies to the system administrator.

An office manager may be required.

Database

A large and extensive database is the main tool in the work of a personnel agency, regardless of specialization. It takes at least two years to create. The opportunity to buy such a base is very rare.

You should not start this business without experience, connections and contacts.

If you are opening a recruiting company without a clear idea of its work and the necessary bases, it is extremely important for you to find experienced employees with experience in this area.

Agency work

So, your young company, which does not yet have a reputation, has begun work. You have three main tasks: finding employers, finding employees and - to simplify the first two - advertising.

You (or your employees):

Call enterprises and firms in the city, get acquainted with the personnel departments and ask them to send you advertisements about available vacancies.
At first, it is better to provide the service for selecting applicants for free. Later, when you earn a reputation and create a sufficient database, organizations themselves will contact you for a fee.
Create a database with vacancies and contact numbers. Update weekly.

Submit applications for positions to local newspapers and online publications and indicate your phone number.

Calls from the unemployed begin to arrive.
Compile a database of candidates. Explain to them that you work with various companies in the city, and that you will call as soon as a suitable vacancy appears. Offer applicants paid assistance in writing a resume (from 100 rubles). This service will help you somewhat offset expenses in the first months.
Look for applicants on specialized resources.

You enter into an agreement with the applicants, according to which, upon actual employment, he will pay you from 30% to 50% of the first salary (that is, he will pay for the work already done, and your company will receive its first profit no earlier than two months later).

Enter into service agreements with organizations. At first, it is also better to make the service free. The more such agreements, the better.

You review the vacancies sent to you by your clients and, if there are suitable employees in the database, send your resume. But remember that if you frequently send unnecessary resumes, the company can easily refuse your services.
It is important for you to earn a good reputation with both employers and applicants.

To attract clients, you will need advertising: in the media, on Internet resources. Another way is to create and promote your own website.
To attract people, you can also publish a free newspaper with vacancies every month (A3 newspaper, 4 pages will cost you about 3 rubles per piece). Offer employers to place their job offers in your newspaper, for example, for 40 rubles per advertisement. At least a few will agree, which will further reduce your advertising costs.

After a year of work, move on to contracts with organizations on a paid basis.

After some time, seminars and advanced training courses can be conducted on the basis of your company (and for an additional fee).

The process of work will remain unchanged: look for vacancies, look for suitable applicants, depending on the situation, receive money from the employee or employer, use advertising.

Possible difficulties

In addition to the difficulties directly related to organizing the process, recruiting companies often face the following problems:

Unfairness in compliance with “agency-applicant” and “agency-employer” agreements.

False information about yourself provided by both employers and employees.

Where to look for customers of personnel search and selection services?

After receiving the first “easy” orders, the question of building a strong client mass involuntarily arises, because finding a conscientious client is not so easy.

Customers may refuse the work done by the recruiter, may not pay, or may change the terms during cooperation. That is why you always need to have additional options in your bosom. Where do freelance recruiters find clients?

• HR exchanges.

There are many online platforms - exchanges of hr services. The principle of working with them is simple. Customers register on the exchange, reducing the risk of recruiters falling for scammers, and post their vacancies. Recruiters submit applications to fill vacancies, and customers can select one or more performers. The easiest and most reliable way to search for orders for beginners.

• Conferences, seminars, exhibitions.

In recruiting, it is important to be visible, to be active in communicating and collecting information about the situations of various companies. Feel free to talk about yourself, promote your personal brand in the media, advertise your services, this will help launch word of mouth.

• Social networks, forums.

Maintain your pages, write about professional successes, closed projects, analyze professional communities and groups, visit company pages. Nowadays, employers are increasingly using social networks as an additional source of finding candidates. Think about what resource your potential clients may be on and hurry to develop your account there.

• Independent search for clients

This is perhaps the most interesting option for a freelance recruiter; it provides an opportunity to increase your paycheck and get regular clients. Finding such clients is not difficult:

– Enrich lists of information sources that publish information about recently registered companies. Most likely, their need for personnel selection will be formed in the near future. Contact them and offer your services.

– Study sites where vacancies are published. At least half of them are placed directly by the employer. Register, choose a position that interests you, and there you will also find a number by which you can negotiate about your services. For example, on hh.ru.

– Make cold calls. Call directories with companies, perhaps some of them will list your contacts, and some will be interested in working together. You can also go to the corporate websites of companies; periodically they post information about vacancies and personnel department numbers.

-Look around on the streets. Someone advertises on billboards, signs and even on office doors; these are your potential clients.

When communicating with customers, remember your advantages: you give them the opportunity to save money on agency commissions, and your motivation, as a self-employed person, guarantees the quality and speed of the result.

What do employers and job seekers get from working with a recruitment agency?

For an employer, turning to professional recruiters is beneficial because it saves time and its own labor resources. The HR manager does not need to advertise for specialists and engage in preliminary interviews; the secretary does not need to waste time on phone calls, scheduling interviews, preparing questionnaires and other organizational issues. All technical and preparatory operations are carried out by the recruitment agency; as a result, the employer receives carefully selected candidates for the position, in accordance with all his requirements, with whom a final interview must be conducted. For the applicant, the benefit of collaborating with recruitment agencies is that the search for suitable vacancies is faster. There is no need to waste time on phone calls, unsuccessfully sending out resumes, or on unnecessary interviews.

Recruitment agency franchise: business advantages

The reasons for failure in doing business are often sought in low qualifications of personnel, lack of material and technical base, and something else. Few of the management of existing companies think about the quality of the chosen strategy. Founders tend to think that everything has already been invented and even initial knowledge about the field of the chosen business is already an important undertaking.

The strategy that will invariably lead to profit lies solely in expansion, increasing the company's turnover and other things.

The misconceptions lie much deeper. If you compare franchise costs and overhead costs, it turns out that they are basically identical. The real losses are not so much the loss of money, but rather the loss of time and synchronicity of development. Franchising gives aspiring entrepreneurs a powerful perspective:

Franchise agency

Starting a guaranteed profitable business under an existing brand. An already existing brand is an opportunity to work with an existing customer base. The recruitment agency is ensured in advance to capture part of the market in finding qualified candidates in its region.
A franchise eliminates the need for experience in running a business. Business processes in the industry have already been streamlined. For the money paid for the proven strategy, new employees are provided with professional advice and mistakes are corrected.
Working under a franchise is an undoubted authority in the field of the chosen business. An entrepreneur does not need to attract a lot of capital by unsuccessfully searching for investors or hanging around the thresholds of credit institutions.
The franchise exempts you from the need to carry out special events to obtain quality certificates and special permits.
Working under an existing brand does not require increased attention or predisposition on the part of local structures. Critical processes that may arise during the formation stage are easily resolved from the company's headquarters.

All that a company applying for a startup franchise will need is to pay an initial fee. A one-time payment is called a lump-sum fee for entering the market as a structural link in the existing network. In addition to the initial contribution, the startup organization will need to find office space, set up office work, and purchase a dedicated telephone line.

The objective advantages that a recruitment agency franchise provides are:

a proven and profitable business scheme;
low level of competition in the regions;
no advertising investments;
advisory support of the franchisor at any stage of the company’s activities.

Thus, a franchise recruitment agency is a promising option for starting a business. With full support by the franchisor (providing a brand, logo, client base, legal documents, support from personal managers), the payback period for the project is 6-9 months.

Pros and cons of business

Business advantages:

Affordable starting investments.
No license required to operate.
No need to receive special education.
Agency detail is subject to minimal control.
You can open a recruitment agency as a franchise.

Disadvantages of business:

Deception on the part of the employer. Companies hire people, then fire them and rehire them, but without the agency.
Candidates periodically provide false information . If it is not possible to identify the employee’s lack of professionalism in a timely manner, the employer will no longer contact the agency.
High competition in the labor market . Building a good reputation takes time.

Features of recruiting agency franchising

Franchising a recruitment agency is beneficial for start-up entrepreneurs and organizations planning to rebrand an existing recruiting company. Thanks to a franchise, you can profitably use the experience of established technologies, quality standards and all components of a profitable business, the success of which has been proven over years of fruitful work.

Sources

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