Recruitment Agencies; an underserved niche?

[terrordread]

It dawned on me the other day just how little mention recruitment agencies seem to get online, especially in forums like this where business owner/operators (many of whom sell services) discuss and talk about their niche specialization.

Have I somehow been blind to conversations around recruitment companies or is it a seriously underserved niche? Perhaps one of you has experience or knows a reason why it barely gets a mention compared to the likes of gyms, restaurants, ecom, management consultants, etc..?

 

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[Andy Black]

@Contrarian … I know you ran or worked in a recruitment agency. Are you still logging into the forum?

There’s a somewhat related and recent thread about job boards. I don’t remember any recruitment agency threads.

 

[Contrarian]

@Contrarian … I know you ran or worked in a recruitment agency. Are you still logging into the forum?

There’s a somewhat related and recent thread about job boards. I don’t remember any recruitment agency threads.

Hey @Andy Black ! It's great to hear from you, how are you? Occasionally I do.

@terrordread do you mean an underserved niche as a client base to serve, or in terms of entrepreneurial interest? I ended up back in the recruiting game after years of trying and failing at other things, and it's been one of the best decisions I ever made, but "passive income" it is most certainly not. I agree that recruiting as a business flies totally under the radar on places like this, but that's not surprising as it's very hard to make it make CENTS.

Even if it's not popular in online entrepreneur circles, recruiting is extremely competitive in most niches and locales so don't be fooled.

 

[terrordread]

Hey @Andy Black ! It's great to hear from you, how are you? Occasionally I do.

@terrordread do you mean an underserved niche as a client base to serve, or in terms of entrepreneurial interest? I ended up back in the recruiting game after years of trying and failing at other things, and it's been one of the best decisions I ever made, but "passive income" it is most certainly not. I agree that recruiting as a business flies totally under the radar on places like this, but that's not surprising as it's very hard to make it make CENTS.

Even if it's not popular in online entrepreneur circles, recruiting is extremely competitive in most niches and locales so don't be fooled.

Good, I'm glad not to be the only one who thinks this.

Don't know if you've read the short book MJ did 'wealth exposed' but I seem to remember the main character selling a recruitment company and living it up on his massive exit payout. Might have been a different business though, can't remember for certain.

That's right, I'm talking about recruitment agencies as a client base. I spent a bit of time as a consultant working for one a couple of years ago and didn't realise just how huge the industry was until getting into it.

Maybe working in recruitment yourself, you feel there actually is a lot of services set up for and surrounding agencies? I don't know - just going off how little attention it seems to get in places like this, where some service providers tend to congregate.

 

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[Andy Black]

I was an IT contractor for 10 years. I’d get €500/day contracts via recruitment agencies. The recruitment agencies might have been getting up to €100/day while I was placed. I never did find out.

Those contracts typically ran for 3 months with possible contact extensions, maybe going on for three years.

How did I find those roles? I Googled for “oracle dba roles dublin” etc.

The recruitment agents I spoke to and who placed me always seemed really young, and most didn’t know what I did. They just matched me for roles based on keywords in the client requirement spec and my CV.

The trick was for those recruitment agencies to be on the preferred supplier list for large corporations.

 

[becks22]

I'm adjacent to this industry. Staffing and recruitment is a major field with big players. To be honest, it's tough finding qualified people to then place at companies. People looking for work is literally how you make money. If you already have those people, this is a great time to be in recruitment. If you don't, it seems like it would be more difficult now to compete with everyone else (companies & staffing agencies) to find those qualified individuals.

There may be a need in certain industries as you mentioned but you would need to do a lot of investigation.

There is a lot of opportunity in serving the staffing field like what I do. You could brainstorm some SASS ideas that may be an easier sell.

May add more later...

 

[terrordread]

I was an IT contractor for 10 years. I’d get €500/day contracts via recruitment agencies. The recruitment agencies might have been getting up to €100/day while I was placed. I never did find out.

Those contracts typically ran for 3 months with possible contact extensions, maybe going on for three years.

How did I find those roles? I Googled for “oracle dba roles dublin” etc.

The recruitment agents I spoke to and who placed me always seemed really young, and most didn’t know what I did. They just matched me for roles based on keywords in the client requirement spec and my CV.

The trick was for those recruitment agencies to be on the preferred supplier list for large corporations.

@Andy Black - I can speak a little bit about the other side of the fence having spent some time doing recruitment on an interim/temp desk.

Our agency would basically negotiate a % commission for the contractors we placed and then the recruiter who was working on that particular job would take a % of the commission from the agency. For example, if we'd placed you in a role for 500/day the agency would get between 10% to 30% of your day-rate added to the overall fee. If it was 30%, we would charge the business we'd placed you into 650/day, pay you 500, pay the recruiter their commission, and then the remaining fee went into the agency coffers. You probably some idea of this already having dealt with recruiters first hand.

And yes, you're absolutely right, lots of recruiters are either straight out of university or around that age, have no experience of the industry they're recruiting into, and spend the first part of their careers learning how to sound credible on the phone. That was my experience anyway. Absolutely ludicrous that I was headhunting for the CFO of Heathrow airport a month after graduating and with zero experience in finance!

 

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[terrordread]

I'm adjacent to this industry. Staffing and recruitment is a major field with big players. To be honest, it's tough finding qualified people to then place at companies. People looking for work is literally how you make money. If you already have those people, this is a great time to be in recruitment. If you don't, it seems like it would be more difficult now to compete with everyone else (companies & staffing agencies) to find those qualified individuals.

There may be a need in certain industries as you mentioned but you would need to do a lot of investigation.

There is a lot of opportunity in serving the staffing field like what I do. You could brainstorm some SASS ideas that may be an easier sell.

May add more later...

@becks22 Thanks for this.

That's exactly what I'm getting at with this post. A huge industry with loads of competition, and servicing it appears to be lacking considering how much money passes through these agrencies.

You mind sharing what you offer recruitment businesses? Not to poach what you do, just out interest...

 

[Andy Black]

@Andy Black - I can speak a little bit about the other side of the fence having spent some time doing recruitment on an interim/temp desk.

Our agency would basically negotiate a % commission for the contractors we placed and then the recruiter who was working on that particular job would take a % of the commission from the agency. For example, if we'd placed you in a role for 500/day the agency would get between 10% to 30% of your day-rate added to the overall fee. If it was 30%, we would charge the business we'd placed you into 650/day, pay you 500, pay the recruiter their commission, and then the remaining fee went into the agency coffers. You probably some idea of this already having dealt with recruiters first hand.

And yes, you're absolutely right, lots of recruiters are either straight out of university or around that age, have no experience of the industry they're recruiting into, and spend the first part of their careers learning how to sound credible on the phone. That was my experience anyway. Absolutely ludicrous that I was headhunting for the CFO of Heathrow airport a month after graduating and with zero experience in finance!

Yeah, those numbers seem about right.

You might find this interesting to learn more from the contractor perspective:

HOT! - 10+ Years IT Contracting at €300-900/day (Learnings)

I was an IT contractor for over 10 years, earning €300-600/day (with the occasional €900/day short-term gigs). I've had a few AdWords jobs and contracts since 2009 (and am currently still in one long running one). In that time, I've learnt how to: Build relationships with recruitment agents...

www.thefastlaneforum.com

 

[terrordread]

Yeah, those numbers seem about right.

You might find this interesting to learn more from the contractor perspective:

HOT! - 10+ Years IT Contracting at €300-900/day (Learnings)

I was an IT contractor for over 10 years, earning €300-600/day (with the occasional €900/day short-term gigs). I've had a few AdWords jobs and contracts since 2009 (and am currently still in one long running one). In that time, I've learnt how to: Build relationships with recruitment agents...

www.thefastlaneforum.com

Nice - thank I'll have a look at this.

I'll hazard a guess that IR35 put an end to the party for you too, or did you figure out some clever way of dealing with it?

 

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[Andy Black]

Nice - thank I'll have a look at this.

I'll hazard a guess that IR35 put an end to the party for you too, or did you figure out some clever way of dealing with it?

Ha I've not heard about IR35 for years! I moved contracts enough in the UK to not get caught by it. Then the last 5 years I was contracting in Ireland.

 

[terrordread]

Ha I've not heard about IR35 for years! I moved contracts enough in the UK to not get caught by it. Then the last 5 years I was contracting in Ireland.

Taking your business to Ireland like big tech hah

 

[Contrarian]

Good, I'm glad not to be the only one who thinks this.

Don't know if you've read the short book MJ did 'wealth exposed' but I seem to remember the main character selling a recruitment company and living it up on his massive exit payout. Might have been a different business though, can't remember for certain.

That's right, I'm talking about recruitment agencies as a client base. I spent a bit of time as a consultant working for one a couple of years ago and didn't realise just how huge the industry was until getting into it.

Maybe working in recruitment yourself, you feel there actually is a lot of services set up for and surrounding agencies? I don't know - just going off how little attention it seems to get in places like this, where some service providers tend to congregate.

Ah, gotcha. In that case, there's a ton of opportunity.

I'm not exactly a gadget fanatic, but here's all the tech I use for my one man (plus administrator) operation:

- Crelate, CRM/ATS
- Outplay - sales engagement tool
- Seamless.AI - contact finder
- Rocketreach - contact finder
- ContactOut - yet another contact finder
- Dux-Soup - Linkedin automation tool
- 8x8 - VOIP phone
- BetterProposals - I do retained search so I use this software to do the proposals
- TechSmith Capture - for screen recordings, usually to send to my admin
- StoryXpress - for recording short videos to send people
- Feedly - for collating content from around the interwebs
- Jarvis.AI - AI writing software to help with cold emails, social posts, etc.
- Publer - social posting automation
- Zoom - for meetings

Probably one or two I'm missing. There's endless tech out there and endless needs for new tech. Every CRM I've ever used sucks for at least one reason, and this is just scratching the surface of the tools some people use.

 

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[becks22]

@Contrarian thanks for the recommendations above. I'v never heard of Better Proposals but I might do the trial. It looks really cool!

 

[MattL]

Recruitment agency solely targeting TikTok?
Seen this in action where I live. No idea how profitable. But seemed like an interesting angle.

 

[addV]

The trick was for those recruitment agencies to be on the preferred supplier list for large corporations.

They probably position themselves as "consulting companies" with the clients to make the cut to those preferred suppliers list while at the end of the day they are "CV pushers", the economies of the business model is probably better than the one of traditional HR agencies, where they charge a fee for a placement

 

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[Contrarian]

@Contrarian thanks for the recommendations above. I'v never heard of Better Proposals but I might do the trial. It looks really cool!

You're welcome!

I've found it a great boon. IMO succeeding as a recruiting business is all about Executional Excellence. How can I create, present, package and deliver something which is superior to anything else in the space across every factor?

Putting together fancy proposals works because noone else makes that kind of effort.

 

[terrordread]

You're welcome!

I've found it a great boon. IMO succeeding as a recruiting business is all about Executional Excellence. How can I create, present, package and deliver something which is superior to anything else in the space across every factor?

Putting together fancy proposals works because noone else makes that kind of effort.

Thanks for the list of software you use. Some I know, others not so much. I agree with @becks22 on better proposals, looks like a pretty decent tool.

Superiority of each touch point, over time, in an industry with demand has got to be a recipe for success. A simple concept in theory but hard to maintain in the real world. Just look at high-end restaurants that lose their Michelin Stars.