There are so many choices to make and potential paths to take when starting a business. One of the dilemmas recruitment entrepreneurs are faced with, is whether to keep the agency as just the founder(s) or to hire employees. This isn’t a clearcut topic and there are many different angles to consider. This is a great article, with some top tips from Erika Clifford, Managing Director of Just Recruit.
The back story – shifting priorities
Even before the pandemic hit, the aspirations of people starting recruitment agencies had shifted away from the lofty heights of 10 consultants by the end of year one and 50 by year three to more modest (and realistic) desires of maybe one or two hires in the first 18 months. Since the pandemic, it’s understandably been more about survival than headcount growth but now even with the market the busiest it’s been for as long as most can remember, there’s still much less appetite for scaling up.
Instead, new directors are generally preferring to keep things small, simple and under easy control. They want to feel safe in the knowledge that if they fancy not coming back after lunch or want to take the afternoon off to play golf, there won’t be any raised eyebrows or explaining to do. It’s more than about ‘skiving off’ though – peoples’ careers have taken a backseat to mental well-being and more living for the moment and as such, less folk are interested in increased stress levels in exchange for a larger business and all that comes with it.
Overall, the lifestyle business model appears to be winning out over all others when it comes to agency start-ups. This does however provide more opportunity for people that do want to grow a recruitment empire.
Factors to consider
There’s not a right or wrong answer, it just comes down to balancing what makes you tick, where you get your kicks and what your medium to long-term goals are. Consider the following:
- Your job is different if you’re an employer
You’ve already stepped things up a notch by running your own company so a bit of time will be taken out of your day job [recruiting] for that. Add in hiring, onboarding, training, management and admin (payroll, staff handbooks, commission schemes, PDP plans, etc) and you’re now part recruiter, part business owner, part manager…
Your daily tasks and responsibilities will look different than if it’s just you – does that excite you or fill you with dread?
- What are your drivers for hiring?
Why have you decided to start your own company and what are your goals?
Is hiring a team conducive to those things?
Is now the best time to hire?
It can often seem that growing the business headcount is the most obvious thing to do if you want to make loads of money however, you might actually find that overall, if you do it by yourself or keep things really small, you could actually earn more money. Be clear on the outcomes you want in the short, medium and long-term and work backwards from there calculating / considering a number of different scenarios.
- Right person vs right time
For many things, timing can be everything. With hiring, there might never be a perfect time but there can be wrong times. If you’re onboarding somebody, you’ll need to have time to dedicate to them – even if they’re an experienced hire.
However, against the current backdrop of the madness of the industry, the right person is far more important than the right time. Which brings us nicely on to the next point.
- Where are you finding your staff?
It is extremely difficult for well-established recruitment agencies to hire staff right now and there are a myriad of factors driving this. Even in ‘normal times’, internal recruitment is often the biggest pain-point for recruitment businesses.
Where will you find one recruiter? If you plan on growing substantially, where will you find five recruiters? These recruiters must come up to your standard, fit your culture, be excellent at their job AND want to work for you instead of everybody else out there that’s hiring. If you’re really serious about hiring, you may need to factor in R2R costs.
- Costs!
Where will you get the money from to pay for staff? How long can you pay a salary for before they start contributing financials back into the business? What will the cost of failed employees be – to your bank balance and your own time? Are you clear on all the costs associated – NI, pension contributions, benefits, additional accounting fees for payroll, extra costs for services such as CRMs, job boards, LinkedIn licences, will you need an office…?
- You will lose some control
Success indicators become less clear cut in the short-term and you do lose an element of control – of your brand, reaching goals and possibly even things like culture.
In the beginning, you call the shots and control the business. If you grow it, there is a tipping point where the business takes on a life of its own and you will increasingly find that you have to march more to its tune, rather than the other way around. It’s a positive sign that you’ve progressed but it’s not without its challenges.
My experience
I started my agency in 2012. With two business partners, there were three of us pre-launch. We were clear early on that we wanted to scale up quickly. On day one there were five of us (including two employees) and by week three we had six. At the end of our first year we had 10 and it peaked at 30 during my five years in the business.
As we were set up to expand quickly, a lot of my time and energy went on being an employer. So much of my personal satisfaction came from seeing the business grow and through enjoying the success of team members and the joy of making placements took a backseat. I’d have far less grey hairs if I’d kept it smaller but I know I wouldn’t have enjoyed the ride anywhere near as much.
Conclusion
To hire, or not to hire is a question only you can answer but the great thing about being a business owner is that the decision is yours. It should be a fun and exciting prospect to hire – if you’re not into it, don’t do it. If you do want to hire – plan, be realistic about the impact and ease of hiring and managing and don’t set strict timelines as this can lead to unnecessary pressure and poor decision making.
If you’re somebody that gets most of your kicks from closing deals yourself, it might be right to keep it small for now. There may come a time when you don’t get the same high from making a placement but you still love the industry – that could be the point at which you should start imparting your wisdom and experience on others and start growing a team.
Whatever you do, make sure you enjoy it.
Written by Erika Clifford, Managing Director of Just Recruit
Just Recruit provides CRM / ATS functionality on a modern system, with the option of a fully integrated website – an affordable package perfect for start-ups. Baffled by extortionate fees for over-complicated and over-priced systems, Just Recruit was created for recruiters that want a slick, intuitive, easy-to-use, affordable CRM. Save time, don’t spend it.
Chat to our team today on 0203 475 1789 or email us on hello@justrecruit.co – we can’t wait to help you on your journey.
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