Starting a Recruiting Business

by Dave Nerz

sticky-notesIf 2013 is the year you will start a recruiting business, here is a very high level look at some things to consider.  The steps may be spelled out for you if you are buying a recruitment franchise.  I would strongly suggest you consider formal and informal network membership as an alternative to purchasing a recruitment franchise.  Here are the high level actions required to get going with your business:

1. Pick a name

Think ahead. Maybe someday after you start your recruiting business you will want to sell it and retire. Do not name the recruitment business after yourself. There is less value to a business called “John Jones Recruiting” when there is no John Jones in the business. At the same time, don’t let name selection paralyze you. The name might help, but look at Google: who would have picked that name? I think they are doing just fine with a crazy name.

Make sure your company name is not already taken with the  U.S. Patent and Trademark Office or the appropriate service in your location.

2. Register a domain name

Make sure that the name you selected has available the domain that you want. Even better, think about how people might find you via an online search and see if there is a way you can incorporate your top keyword into your domain name (as well as your company name).

Go for the .com extension. If you must give in, consider .net or .jobs. Try to avoid the dreaded hyphen! Check domain names at Network Solutions. There is nothing worse than a thriving business working on a @gmail.com, @yahoo.com or @aol.com address.

3. Arm your recruiting business with tools

Business cards – Vistaprint.com is a great source of cheap cards.

Accounting Software – Quickbooks is a standard. Freshbooks is an online option.

Applicant Tracking System – I like PCRecruiter. They have a low-cost, highly-flexible tool to track clients and candidates. (Disclosure: Main Sequence Technology, maker of PCRecruiter, is NPA’s technology partner.)

Backup system or cloud-based storage area – Dropbox or GoogleDocs are cloud-based, or you can have a scheduled backup from a service like Carbonite.

Mailing/Marketing Service – try Constant Contact or MailChimp.

LinkedIn – buy the best package you can afford. You will be using it all day, every day, so make it your friend.

4. Set up a website

There are many low-cost tools, including godaddy.com, Network Solutions, and Vistaprint. A word of caution: You don’t want your next-door-neighbor’s-kid’s-best-friend to build you a website, unless that person REALLY knows about websites, responsive design, search engine optimization, mobile interfaces, etc. Economical is smart. Cheap is not.

5. Get connected to the industry

Join the industry trade association – NAPS (National Association of Personnel Services) is in the US.

6. Get trained

Look into a service like Next Level Exchange. They provide training on recruiting from many of the masters of industry.

7. Expand your capabilities/make more money/connect to a peer group

Once established, join NPA, The Worldwide Recruiting Network to enable global coverage to your prospects and clients, do more deals, and gain access to fellow entrepreneurs for ideas and coaching.

It is a great time to be a recruiter. It is difficult work, but the demographics are on your side. With millions of boomers retiring each year and companies back into a growth mode, good employees will be hard to find. That’s where you can benefit. Happy New Year and best of luck for a successfully starting a recruiting business.


Recruiting Franchise Opportunities will Benefit from the War for Talent

by Dave Nerz

open signMany say it is a great time to start to start a business and in light of the long-term demographics a recruiting franchise or staffing franchise is a good bet for success. Recruiting and staffing franchises help employers find workers either as full-time company hired employees, as temporary contractors, or as full-time contact employees.

Because of the uncertainty in the economy, many employers are looking for less permanent types of arrangements with employees. They want to pay someone to implement a project, lead a launch or manage a program but want to “rent” employees rather than “owning” them for the long haul. Demographics point to a long-term shortage of talent due to the aging baby-boomer generation leaving the work place and insufficient talent in the pipeline behind them. This is more real in technology, engineering, healthcare and science than it is for service-type jobs. But regardless, if the economy gets moving again, the demand for talent (aka skilled and talented employees) will be overwhelming. It is projected by many to be a “War for Talent” that will play out both locally and across borders and continents. And according to a report by The Bureau of Labor Statistics, the employment services industry is expected to be the United States’ 9th-largest in terms of job-creating industry over the next 10 years.

When I look a the money MRI, Spherion and others are charging for a recruiting franchise, I wonder why more are not going it on their own with the help of a peer group for support. While the turnkey option offered by the big boys is appealing, it also has its own unique risk. Because owners go into to it with a large debt to service, the success must come faster and the profits must be shared with the franchising operator. The success these major operators have is tough to argue with if you are relatively new to the recruiting business.  f you value independence, the recruiting franchise option will be somewhat frustrating as you are really a part of a bigger operation and must do certain things to honor the relationship bought into with the franchisor.

A seasoned recruiter, who knows the tools of recruiting, has a recruitment process, and just wants to strike out independently may value a peer group and some partners to help along the way. Vendors to the industry act as a great support mechanism and can provide ideas and support if a relationship is nurtured with your ATS provider, your accountant, job board partner, etc. Online networks, organized recruiting networks, trade associations and trainers to the industry are all excellent options that, while not fully replacing a recruiting franchise, certainly offer an option to those who want to be more independent.

What kinds of numbers have you heard that a recruiting franchise from a major brand costs in today’s market?

Would you pay the price or start the business independently?

Any resources that are a must for a new independent recruiter?

Recruiting franchise opportunities and the opportunities for starting a staffing business are good. Franchising, while not for everyone, is an option that will prosper in the war for talent.


Recruiting Franchise vs. Recruiting Network – Which one is right for you?

by Veronica Blatt

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.