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How to Set Up a Recruitment Agency?

Posted: 16th July 2019

More than ever, the recruitment industry is booming. Today’s career path sees employees change jobs far more frequently than in years gone by. Gone are the days of an employee staying at one company forever.

Fact: The recruitment industry is worth over £35bn

With this increase, many are looking at setting up a recruitment business - demand is high and set up costs are relatively low. 

Fact: There are over 8,000 recruitment agencies in the UK

As pioneers of back office recruitment solution, PayFactory, here at Calverton Finance we deal with hundreds of UK recruitment agencies; bring stability, regulatory and cashflow peace of mind to start ups and established businesses.

Here, we share with you some of the insightful knowledge we have gained from our customers, when starting a recruitment agency.

1. Establish Your Niche

Success is often through being a ‘master of one’ not a ‘jack of all trades’. Decide on what industry you want to specialise in (for example sales, catering, media, finance) and stick to it. You want to be known as industry experts.

2. The Gift of the Gab

A huge part of a recruitment agency’s job is sales. You must sell yourself and your agency, not only to get the highest quality candidates on your books but also to those companies who are recruiting.

3. Regulations & Legislations

It is essential you keep up to date on regulations and legislations, for example, minimum wage, EU workers, annual leave, payroll finance, IR35 and pension contributions.

4. Plan, Forecast & Budget

All businesses need cashflow, not just to start up but to carry them through the first few years. Carefully set yourself a plan, a budget and forecast your expectations over 3 - 5 years.


GDPR compliance is critically important. All your procedures and data - from CVs, how you share data to deleting candidate information - must comply with GDPR rules. Failure to do so will result in heavy fines, as well as damaging (possibly even destroying) your business reputation.

6. Marketing

Without marketing yourself how will anyone know you exist? Set up a registered business name, logo, website and social media platforms.

7. Long Hours

Given that many candidates can only look for jobs after they have finished as day’s work. Hours can be long in the recruitment industry; and as a new business owner you will also need to be managing the administrative day-to-day operations on top of recruiting.

8. PayFactory Back Office

The complete recruitment agency back office system, PayFactory sets up, amends and deletes employee records in line with GDPR, prepares and issues invoices, pays contractors, produces P45s. It can also offer a complete credit control service such as issuing statements and chasing letters, and chasing customers for payment.

Fully compliant and up to date with all regulations, PayFactory is used by hundreds of UK recruitment agencies, big and small.

For more information on recruitment invoice discounting, recruitment agency factoring and recruitment back office finance, including PayFactory, get in touch today - contact us online or call 01908 268888.