You have launched your own recruitment business and think it might be time to make
your first hire. Before taking this huge and risky step, consider our four steps for success.
Gut feeling is always going to play a part when deciding whether to hire, but how can you be a little
more scientific about proceeding with such a bold step? Here are four critical pointers to consider:
The first benchmark is really simple. We would recommend that you only hire a fee earner when you have six months’ cover of their salary in the business bank account. Why? Because unless you are handing them a warm desk with clients and work in progress, it’s probably going to be something like six months before the cash from any placements your new hire makes hits your bank account. As such, you’ll need to be able to support them for six months without them generating cash.
Secondly, watch your business development (BD) ratios. If your BD inputs to job orders and placements ratios are getting smaller, then it may be time to hire. If they are expanding, then it probably isn’t the right time to hire.
Conversely, are your candidate engagement ratios widening? Is it getting harder to get candidates on board? If so, it may be time to hire as demand for talent is probably outstripping supply of said talent.
Fundamentally, the biggest risk when hiring is launching people into markets which are cooling (it can make sense to invest at these times if you are a business of scale, but not if you are the owner of a small recruitment business). Assessing these two sets of metrics can help you sense-check any decision to hire.
Finally – and similarly – are you turning good work away? We recommend scoring your jobs against an objective set of criteria. You will know how many jobs you can realistically manage at any one time (for full-on searches, that number is probably around five, but this will vary from market to market). So, if you are at full capacity and are turning good quality work away (jobs which would score 70% or above on Reed Franchise Partnerships’ job scoring matrix), then it may well be time to hire.
So, having decided to recruit, the next question is who to hire – check out our blog on this subject.
Rob Barklamb, director of international franchising, and Toby Moyse, Development lead, both from Reed Franchise Partnerships, shed light on the numerous advantages of starting your own recruitment business with Reed Franchise Partnerships.
Our franchise fee starts at $3,000, which is exponentially less than those charged by every other recruitment franchise. Someone comparing us with other franchisors might reasonably wonder why. Well, let’s unpack this.
In this videocast episode, Rob Barland, the director of international franchising at Reed Franchise Partnerships, sits down with Xavier Krasnicki, the International Marketing Manager at Reed, to delve into the fascinating world of marketing for recruitment.