Recruitment agency business plan: an example with calculations

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The unstable economic situation in the country always brings certain changes in the labor market. As a rule, at any time there are two colossal problems - unemployment and a shortage of high-level specialists. This is why recruitment agencies are in demand. Starting a business in this area is an attractive idea for many job seekers. After all, those who are faced with the search for employers and employees need to meet somewhere. It is the recruiting company that is able to combine both.

Recruitment agency business plan

This is the first thing many companies start with. When drawing up a detailed plan, you need to consider many different points, including calculating the potential profitability.

What items should a recruitment agency business plan include?

• Line of business.
• Project goal.
• Description of the industry.
• List of services.
• Advertising.
• Example with calculations.
• Risk assessment.
• Efficiency.

Let's discuss each of the above.

Line of business

This is a topical moment that should never be overlooked when drawing up a business plan for a recruitment agency. Multiple directions possible.

• Agency to search for vacancies. Its main clients are applicants who are looking for work. As a rule, the recruitment agency in this case receives a certain fee for providing information about free vacancies. At the same time, no one guarantees successful employment. The staff can only help the candidate in compiling a list of the most suitable options, allowing him not to spend his own time looking at absolutely all the vacancies available in the labor market of the selected region.
• Agency to find employees. These are, as a rule, more reputable companies whose clients are employers who want to fill a vacancy in the shortest possible time. Payment is made only when a worthy candidate is found. Some recruitment agencies offer services to attract specialists who work in other companies. The pay in this case is even higher, since, as a rule, we are not talking about the unemployed, but about highly qualified specialists who have a permanent position.

Project goal

Is to realizeproject related to the opening of a recruitment agency. As a business, this idea is always relevant as the job market is fluid.

In fact, the recruiting company becomes an intermediary between a potential employer and an employee, representing the interests of one of the parties. That is why it is important to decide in advance which clients the recruitment agency will target.

According to preliminary calculations, the costs will amount to several hundred thousand rubles. However, this issue will be considered in more detail as part of the business plan.

Industry Description

The Russian economy has led to the formation of a relatively difficult labor market. On the one hand, there is unemployment. On the other hand, on the contrary, there is an increased demand for highly qualified applicants. This is why a recruitment agency business plan should take into account the various risks provided by the industry.

The trend is that some companies prefer to hire remote employees. This allows them to reduce the cost of maintaining full-time employees. Accordingly, the trend is gaining momentum.

In addition, some companies are trying to automate all issues related to interaction with personnel and in this way reduce the demand for the services of recruitment agencies.

The industry is highly competitive, resulting in recruiting firms focusing on narrow specializations. Some help job seekers, others, on the contrary, employers. There are also recruitment agencies that offer job searchspecific specialization.

The peculiarity of the industry is that it is not difficult to open a recruiting company. It is much more difficult to turn the idea of a business with a recruitment agency into a successful and profitable enterprise with a reputation as a reliable partner you can trust.

List of services

Any company aimed at providing services should clearly define their list. In the future, this directly affects the level of profit and the presence of a flow of customers.

When compiling a business plan for a recruitment agency, the example of which we are considering, you can include the following services for potential clients, which may include job seekers and employers.

• Selection of a candidate. In this case, a company that needs an employee applies to fill the vacancy. As a rule, the employer has a number of specific requirements for a potential employee. An HR specialist can simply go through dozens of resumes and check them for compliance, or follow through with interviews with potential candidates.
• Evaluation and testing of employees. This service is relevant for companies that seek to improve the efficiency of their own staff. To this end, recruitment agencies hire full-time psychologists who use various tests to assess the level of motivation, aptitude and other characteristics.
• Outsourcing. A similar service is also provided to employers who, for whatever reason, do not hire full-time employees, but at the same time havethe need to perform certain business tasks.
• Resume writing. This service is for job seekers who are interested in finding vacancies. HR specialists are able not only to suggest how to write a resume correctly, but also in what ways it is better to look for potential employers, which companies to contact in the first place.
• Selection of vacancies. Every applicant has a certain level of expectations. The task of the personnel specialist is to select among hundreds of offers those that will suit a potential employee.

Among other things, HR specialists must navigate the situation on the labor market. This will make it possible to reasonably assess the adequacy of requests and immediately warn employers that low wages and a highly qualified specialist are incompatible concepts.

Example with calculations

It should be said right away that the business plan below for opening a recruitment agency is designed for a short planning horizon. It is expected that after about six months or more, the costs will pay off. However, in practice, this period may be prolonged depending on the actual situation on the labor market. Experts say that there is a chance to start making a profit in the first year.

Sample recruitment agency business plan with calculations includes only the most necessary expenses.

Rent of premises in the business center - 15 thousand rubles. It is assumed that the office will already be equipped with furniture, so it will not have to be purchased separately.

Office equipment - 200 thousandrubles.

Advertising campaign - 20 thousand rubles.

Registration of activities - 10 thousand rubles.

The calculations show only the necessary costs to start the activity. They amount to 245 thousand rubles.

Monthly costs must also be included in the calculations.

Rent - 15 thousand rubles.

Advertising - 5 thousand rubles.

Payments to employees - from 0 and above. Depending on how many people will be on the staff. It is possible that at first the founder of the company will perform administrative functions on his own.

It should be noted that this list of costs is provided as an example. In fact, the costs depend on the initial investment. For example, some founders are able to afford to purchase a customer database and start filling orders right away. Further development of the recruitment agency business, reviews confirm this, also require certain costs.

Advertising

So, the target audience of a recruiting company can be potential employers or job seekers. This is important to consider when building a marketing strategy aimed at promoting the services of a recruitment agency on the market.

It is worth noting that, according to experts, this stage can be called the most difficult in this type of business. Due to the high competition, a significant role has to be given to the formation of the image. That's why you need to be especially careful about how you advertise.

The basis for generating income for a recruitment agency isclients. That's why it's important to build a loyal customer base. It takes a lot of time and effort.

The initial cost of an advertising company can be twenty thousand rubles. This will allow you to test the result obtained from the selected advertising methods, and then, if necessary, adjust the strategy.

In addition to passive advertising methods, you should definitely use active ones. For example, cold calls to potential clients.

Risk Assessment

According to statistics, most new companies are closed in the first year of their activities. That is why it is important to calculate the possible risks.

In the case of a recruitment agency, this is high competition. The advantages are on the side of those companies that have been on the market for a long time and managed to earn a reputation as trusted partners.

Efficiency

Any commercial project is created for the purpose of making a profit. This allows attracting investments even for those who do not have the initial capital. To this end, it is necessary to evaluate the effectiveness of the project and calculate the payback period. If the calculations are attractive to potential investors, even the lack of own funds will not prevent you from starting your own business.

Result

Recruitment agency is an activity that has its own unique specifics. The main difficulty is not in opening an enterprise, but in promoting its services on the market. At first, you will have to constantly prove to customersreliability.