The market of the recruitment agencies is highly competitive. The new start-up has to analyse the services provided on the general market, it has to make the analysis of direct competitors, it has to set up its internal processes and systems. The agency has to make a decision about the segments and sectors. Additionally it has to make a tough decision about the additional services offered to clients.

1. How to start the
successful
recruitment agency?
How to enter
successfully the highly
competitive market of
recruitment agencies?

2. EXECUTIVE SUMMARY
1 OFFER OF THE
RECRUITMENT
AGENCY
2 RECRUITMENT
MARKET ANALYSIS 3 BEING UNIQUE
4 NEW HORIZONS
GROWTH AREAS
How does the How big is my How can I avoid
recruitment market? What should my the direct
agency become Who are my competitive competition with
profitable? clients? advantage be? other agencies?
This section covers You will identify the The competitive Understanding to
the key services, landscape for the advantage is the trends in the
which the recruitment agency. critical success recruitment and
recruitment agency You will be able to factor. What staffing is the
offers. It compares identify the key services can the essential part of the
products and market drivers for agency offer to success. What
services. The the successful make its portfolio services should a
agency has to employment unique and modern
identify its niche. agency. interesting? recruitment agency
offer?

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4. CONTENT
How to start the
recruitment
agency?

5. CONTENT
1. What does the Recruitment Agency offer?
2. What is the market of the Recruitment Agency?
3. Business Opportunities for the Recruitment
Agency
4. Building the competitive advantage
5. How to download this presentation

6. OFFER OF THE
RECRUITMENT
AGENCY
How does the
recruitment
1
agency become
profitable?

7. TRADITIONAL RECRUITMENT AGENCY
BUSINESS
Database
Search
Executive
Search
Recruitment
Agency Recruitment
Process
Outsourcing
Most recruitment agencies do use the standardized set of services.
They build no competitive advantage.

8. DATABASE SEARCH
• Database Search is the most common
serviced provided by the recruitment
agency
• The agency receives the job vacancies
from its clients and advertise them
using different channels
• The agency builds the database of job
applicants and offers them to clients
• The agency gets paid just for
successful placements
• Easiest, but the riskiest business of the
recruitment agency

9. EXECUTIVE SEARCH
• The executive search is a highly
focused search of the skilled and
experienced employee, who is
employed at the competitor
• The executive search is usually paid in
three installments
• The client has to trust the agency
• The margins are high, but the number
of vacancies is limited
• Extremely difficult service for the new
recruitment agency; it has no
successful placements to be used as
the reference

10. RECRUITMENT PROCESS OUTSOURCING
• RPO is the best mass service, which
can be offered by the recruitment
agency
• The agency takes over the end-to-
end recruitment process from the
client, and charges the regular
monthly fee
• Highly sophisticated service, which
needs a strong software support
• Most agencies do not have
sufficient resources to offer the full
RPO

11. SERVICES COMPARISON
High
Recruitment Executive
Process Search
Outsourcing
Profitability
Database
Low
Search
Low Competition High
The database search is easiest service to start with, but it offers low margins
and all competitors offer the same.

12. RECRUITMENT
MARKET ANALYSIS
How big is my
market?
2
Who are my
clients?

13. MARKET: WHAT TO ANALYZE?
How many agencies do operate on the market?
How many of them are specialized?
What is the informal feedback?
Recruitment
Agencies
Job
What are the common terms and conditions?
How many vacancies do they offer?
Market
Businesses
What is the unemployment rate in my area?
Job What universities are in my area?
Applicants
How many businesses do operate in my area? What positions are people looking for?
What positions are they advertising? Which company is the employer
What agencies do they use today? of the first choice?
Do they outsource their recruitment process? What is the salary offered to fresh graduates?
Do they use any agencies exclusively? Which job portal is the best known in my area?

14. DIRECT COMPETITORS
• The direct competitors define the
standards. The new agency has to
offer better service than direct
competitors.
• The analysis of the services and clients
will help to focus services and offers in
the right direction.
• The competitors define the structure
of fees, and the new agency has to be
able to compete with the structure of
fees.
• The direct competitors will protect
their services and will fight against the
new comer.

15. POTENTIAL CLIENTS
• The agency has to make a proper
estimate of the size of the local market
• It has to identify the key clients, which has
to be targeted with the tailored offer
• The agency needs to analyze the job
vacancies required and the common
recruitment channels used by companies
• The agency has to analyze the structure of
the workforce at potential clients as it can
propose the right structure of fees and
time to hire
• The agency can project the cash flow and
number of recruitment specialists needed,
if it wins bids for vacancies

16. JOB APPLICANTS
• The recruitment agency has to analyze
the potential of the local job market. It
cannot offer skills and competencies,
which are not locally available for mass
job vacancies.
• The recruitment agency has to analyze
the offer of local universities, as it can
grab some talents with no previous
working experience. Many companies
are interested in this workforce.
• The agency has to analyze the most
common recruitment channels, and
has to build its own channels, which
can target interesting candidates.

17. YOUR PERSONAL NETWORK
• The recruitment agency has to keep and
develop the active networking group. The
satisfied clients are the best reference for
the agency.
• The agency has to ask for references and
instant feedback, as it keeps the constant
quality of provided services. Each
successful placement should be known to
the network, as they do not forget invite
the agency in case of difficult job
vacancies.
• The recruitment agency depends on the
quality of the network, it can build around
its employees. The employees should be
incentivized to enhance their network of
useful contacts.

18. BEING UNIQUE
What should my
3
competitive
advantage be?

19. PROCESS EXCELLENCE
• Most agencies do not focus on the process
excellence. The agencies do not commit to deliver
the first candidate within a defined time. The
agency, which is able to promise the delivery of the
first candidate, is building the trustful relationship
with the client.
• The process excellence requires a strong software
support, as the agency can track all open job
vacancies.
• The regular feedback and asking for the feedback is
not a nice extra, but it can help to improve provided
services by the agency.
• The process excellence seems to be expensive, but
it can have a huge positive impact on revenues of
the agency.
• The small start-up employment agency can use
humans for managing the recruitment process, but
it has to be switched to the optimized software
solution as soon as possible.

20. PRICE
• The price competition is not a successful
strategy for setting the recruitment agency.
The competitors have a stronger cash flow
and higher reserves.
• The competitors will always react on your
competitive offers to their clients. They will
choose several job vacancies, which are crucial
for the client and will offer the highly
competitive package.
• No agency can run without any fixed costs and
they are almost the same of all competitors.
The space for the price competition is highly
limited.
• Once the agency cuts prices of its services, it
cannot increase them back easily. It cuts its
income, but does not get the additional
volume in return.

21. DIFFERENT APPROACH
• The recruitment agency should choose
different competitive advantages:
– Specialization
– Quality of the service
– Access to different talent pools
• These approaches are difficult to copy.
They build the unique position of the
agency on the market.
• The clients value a different approach,
as they feel the difference in services
provided.

22. NEW HORIZONS
GROWTH AREAS
How can I avoid
the direct
4
competition with
other agencies?

23. SOCIAL MEDIA RECRUITMENT
• The social media recruitment is the fast growing
recruitment area. It combines the knowledge of the
recruitment, psychology, sociology, communication
skills and Information Technologies.
• The social recruitment influences other target
groups and can bring new, interesting and
innovative talents to organizations.
• Most fresh graduates and college students do
search for a job using social media and networks of
their friends.
• Social media recruitment requires the unique know-
how and most recruitment agencies are not able to
combine the HR expertize with the IT knowledge.
• The agency, which is able to utilize the full potential
of the social recruitment, develops a strong
competitive advantage, which is hard to beat.
• It is hard to achieve initial results and build the
strong position in social media, but the
performance lasts for a long time.

24. SOCIAL RECRUITMENT OUTSOURCING
• The social media recruitment requires a strong and
consistent presence of the company in social
media.
• The organization has to focus on building targeted
and engaged audiences, but it cannot afford to
allocate the fulltime employee to these activities. It
is x-border HR/Communication/Marketing.
• The agency can outsource the recruitment
communication in social media from its clients and
it can build a strong additional stream of revenues.
• It can develop their online communities and it can
use them for hiring new talents.
• It can bill clients on a monthly basis. The small
amount per client can build a strong and consistent
flow of additional revenues. It can build a real
competitive advantage over its competitors.

25. DIVERSITY IN RECRUITMENT
• The diversity is a hot topic for many organizations.
The diverse teams have a higher stability and
performance than the unified teams.
• The recruitment agency can focus on finding
diverse talents for its clients.
• Many companies do prefer younger candidates, but
mature businesses usually want to build diverse
team, and they can prefer the employee, who is
50+.
• This specialty can be a strong competitive
advantage, as the agency builds the unique position
on the job market. Its name can be well known and
well recognized, because of its different target
group.
• The diverse recruitment will enjoy a huge growth in
the near future.

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