During the course of the pandemic, I have had the pleasure of speaking with many corporate recruiters who are using this time to consider going out on their own and beginning an agency. Many have been part of a downsizing, and many have just had more time to finally consider the career change they have been plotting for some time and make sure they execute it well. Owning a recruitment firm can be a lucrative and rewarding career; it’s attractive to many former HR and corporate recruiters, and also those high-producing third-party recruiters who have no equity in their current employment situation.
While owning your own business has many options when first starting out, 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. One offers more upfront at a higher price, and one promises less upfront, but allows you to keep more individuality. Here are some points to consider with both:
- Recruiting Franchise Model
- High start-up costs – purchasing a franchise can cost more than US$50,000
- Franchise fees – a portion (5% or more) of gross REVENUES paid each month is a low average.
- Varying levels of individual branding as a business owner, most will require branding to reflect the name of the franchise.
- Purchasing a business process and corporate marketing/branding that has a track record of success but must be followed exactly.
- Software – usually have to purchase and use corporate-mandated system
- Training that starts at the ground level for beginners in the space
2. Recruitment Network Model
- Low start-up costs – you can start your business from your home with a phone and computer and choose your own tools as you see fit.
- Recruiting networks can charge monthly dues, brokerage or commission on placements, or be free depending on what they offer.
- Total autonomy as a business owner to brand and build your business model as you see fit.
- Time investment required on establishing yourself in an existing network to develop trust with business partners and connections.
- Software – most often you are free to choose your own based on what works best for your needs with recommendations on best choices or group discount pricing.
- 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
- Industry advancement training. Networks are geared to enhance the experienced recruiter’s knowledge and staying abreast of industry trends.
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.