1. Understand the Recruitment Industry
Before launching your agency, gain a clear understanding of:
- How recruitment works (permanent, temporary, contract placements)
- Key players and platforms (LinkedIn, Reed, Indeed)
- Typical fee structures (percentage of salary, flat fee, day rates)
Research industry trends, skill shortages, and growth sectors like healthcare, IT, and engineering.
2. Choose Your Recruitment Niche
Focus your agency on a specific industry or job function. Popular niches include:
- Healthcare and nursing
- IT and tech
- Legal
- Finance and accounting
- Construction
- Education
Niche focus helps you build expertise, credibility, and targeted marketing strategies.
3. Register Your Business
Choose a legal structure:
- Sole trader (simple setup, full liability)
- Limited company (preferred for recruitment due to limited liability and professionalism)
Register with Companies House and get a business bank account. Consider trademarking your agency name.
4. Get the Right Licences and Insurance
You may need:
- Recruitment business licence (not mandatory for general recruitment, but required for care staff via CQC)
- Employer’s liability insurance
- Professional indemnity insurance
- Public liability insurance
Check with the Recruitment & Employment Confederation (REC) or other trade bodies for best practices.
5. Set Up Your Office and Tools
You can start from home or lease office space. Essential tools include:
- Applicant Tracking System (ATS)
- CRM for client relationships
- Accounting software
- Business phone line and website
- GDPR-compliant data handling processes
6. Build a Candidate Database
Use job boards, LinkedIn, networking events, and your own website to attract candidates. Build trust with:
- Clear job descriptions
- Transparent communication
- Privacy and data protection policies
7. Find and Win Clients
To secure job placements, contact businesses directly and pitch your services. Use:
- Cold emailing and calling
- Networking events
- LinkedIn outreach
- Referral schemes
Demonstrate your niche expertise and the value you add through quality placements and fast turnaround.
8. Set Your Pricing and Terms
Recruiters typically charge:
- 15–25% of the candidate’s annual salary for permanent roles
- Daily/hourly margin for contract roles
Create clear terms of business covering payment timelines, refunds, and replacements.
9. Promote Your Recruitment Agency
Use a mix of channels to grow your visibility:
- Professional website with SEO
- Social media (LinkedIn, Facebook)
- Job boards and aggregator sites
- Email newsletters
- Paid ads (Google, LinkedIn)
Establish your brand voice and regularly share industry insights.
10. Ensure Legal Compliance
Ensure compliance with:
- Employment Agencies Act 1973
- Conduct of Employment Agencies and Businesses Regulations 2003
- GDPR data protection rules
- HMRC and Companies House reporting
Frequently Asked Questions
Do I need a licence to start a recruitment agency?
Not for general roles, but you need registration if you’re placing care workers or teachers.
How much does it cost to start a recruitment agency?
Startup costs range from £2,000 to £10,000+ depending on office setup, software, and marketing.
Can I run a recruitment agency from home?
Yes, many agencies start from home, especially with remote job placements and cloud-based tools.
How long does it take to get clients?
It varies. With effective outreach and networking, you can land your first client within weeks.
What’s the best way to find candidates?
Use LinkedIn, job boards, and networking. Build a solid reputation to attract referrals.
Should I join a trade body like REC or APSCo?
Yes, it adds credibility, gives you access to legal updates, and offers networking and training opportunities.
Conclusion
Starting a recruitment agency in the UK offers significant profit potential—especially if you carve out a niche, build strong relationships, and stay legally compliant. With the right tools, marketing, and industry knowledge, you can build a successful agency that connects top talent with the right opportunities.