When hiring is robust, like the cycle we are entering (or are already in, depending on the market), there is high interest in starting a recruiting business. It can be a lucrative and rewarding career; it’s attractive to many former HR and corporate recruiters, and high-producing third-party recruiters who have no equity in their current employment situation may consider going out on their own.
Two of the more common models for starting a recruiting business are purchasing a recruiting franchise, or going it alone with the help of a recruiting network (it’s the old “buy or make” dilemma). If you’re interested in starting a recruiting business, here is a list of key differences between a recruiting franchise and a recruiting network that might be helpful in your decision-making:
|Recruiting Franchise||Recruiting Network|
|High start-up costs – purchasing a franchise can cost more than US$50,000||Low start-up costs – you can start your business from your home with a phone and computer|
|Franchise fees – a portion (5% or more) of gross REVENUES paid each month||Recruiting networks can charge monthly dues, brokerage or commission on placements, both dues and brokerage, or be free|
|Varying levels of autonomy as a business owner||Total autonomy as a business owner|
|Purchasing a business process and corporate marketing/branding||Purchasing access to connections, referrals, and/or trading partners|
|Software – usually have to purchase and use corporate-mandated system||Software – free to choose your own based on what works best for your needs|
|Prescribed business practices – A franchise must be run according to the corporate model||Guidelines and best practices – A recruiting network will offer guidelines and best practices as opposed to a specific business model, with a community of peers to learn from|
|Lots of training||Varying levels of training|
Purchasing a recruiting franchise can be a great option for those with a lot of up-front cash who want to follow a corporate model with lots of training. For those with a more entrepreneurial style, an independent business combined with membership in an established recruiting network can offer more freedom and flexibility. Both choices can be successful; the key is to find the one that best fits your needs.