Four common errors to avoid when starting a Recruitment Agency


Pulse Outsource support Recruitment Agency start up by avoiding 4 common mistakes

Four common errors to avoid when starting a Recruitment Agency

The recruitment sector has had its fair share of challenges in recent years and as we begin to look forward to 2023, the landscape is peppered with optimism and caution.  Whether the UK enters a recession or not, there will be companies looking to recruit talent or temporary workers to cope with demand.  The ongoing challenge of talent scarcity brings the requirement of retraining and replacement of talent. Despite the uncertainty it’s an exciting industry to be part of.

Every year, we see many new recruitment agencies starting up by industry professionals keen to make a difference and deliver clients a service that supports their requirements.  We understand that starting your own agency can be a daunting prospect, competing with other businesses in what appears to be a seemingly saturated market. However, as the saying goes, ‘there is always room at the top’. For recruiters looking to start their own agency, it can be overwhelming to know where to start. 

As recruitment specialists with over 20 years of experience supporting agency growth, we have compiled the four common errors you should avoid when looking to start your own Recruitment Agency. 

  • Failing to define a USP

This is the first and most crucial step toward establishing your own recruitment agency. Building a successful agency necessitates thorough planning and evaluation. Recruitment is a popular sector, with hundreds of start-ups each year, resulting in high levels of competition among small recruitment businesses. To gain a competitive advantage, you need to analyse your market and your principal competitors to identify a ‘gap in the market’ that will differentiate your agency from the rest.  

Although it may appear more appealing to operate in a broader client market, targeting a specialist industry can help your start-up quickly establish a market position. Aligning your agency's branding to having specialist knowledge and being well-connected within a sector builds a strong reputation among clients looking for candidates with specific skills and experience. This is not limited to just sector; you can choose to specialise in hiring for specific role functions, such as executive and graduate recruitment.

  • Overlooking your marketing strategy 

A common misconception among start-up agencies is that marketing can be an expensive strategy only relevant for established businesses. There is no good having a strong brand proposition if it isn’t consistently communicated to your target. Creating a website can be easy and relatively inexpensive, using website builder sites like Squarespace and They provide customisable ‘drag and drop’ templates that don’t require any professional designing and coding knowledge. 

Moreover, social media is a great tool to build your brand for no cost. Most recruiters use LinkedIn to find candidates but don’t forget it’s a great channel for sharing content and increasing your brand reputation and profile amongst both clients and candidates.  Consider tools such as Canva or Picsart to create visual content for free or use paid apps such as Adobe InDesign.

  • Watch your overheads

As a start-up, cash flow is the lifeblood of your business.  In the early days, you need to keep a watch on your overheads to ensure you are able to balance money going out with income you generated from your clients.  Research thoroughly alternatives to key overheads which can keep your costs down and be wary of signing up to long term commitments which are inflexible and won’t change with your growing business.  This can cover anything from office premises to software.  

Investigate a source of funding which can flex with your business and provides cashflow funding to help with payments to contractors which need to be paid weekly whilst you only invoice your client monthly.  Invoice Finance is a very popular form of funding used within the recruitment sector because it releases funds from invoices as they are raised providing an ongoing source of cashflow.

  • Focusing your time on non-productive back-office tasks

For businesses who rely on finding and placing contract staff, unproductive back-office tasks such as checking timesheets, administering payroll, raising invoices, and chasing payments can be time demanding. These time consuming and increasingly complex tasks can distract your efforts away from the more rewarding focus of winning new business contracts.

Time is valuable when growing a business, so outsourcing these tasks can make a huge difference to your operational productivity, helping you save both time and money.  Pulse Outsource can support your agency by ensuring you have an efficient payroll and invoicing process - vital to the smooth running of your business. Our expert team can take care of these tasks, freeing up your time to grow your business. In conjunction to this, we provide an Invoice Finance facility with up to £5m in funding to provide you with the cashflow support you need. 

If you are considering setting up your own agency or have recently started - get in touch today to find out how your agency could benefit from outsourced funding, invoicing, and payroll solutions. Call us today on 0845 646 1340 or find out more


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