The Early Stage Recruiting Firm

Every day, new recruiting firms startup around the world. However, they end up falling into three categories.

Every day, new recruiting firms startup around the world, and seemingly, they end up residing into one of the following three categories:

Category 1: Go out of business and lose significant money and confidence.

Category 2: Struggle in business.  Although their doors may be open, they consistently experience one or more of the following:

  • Working ridiculous hours. 
  • Earning less money than they should given the time, money, and resources they invest. 
  • Experiencing a high level of stress and frustration with no end in sight.

Category 3: Develop a highly successful, rewarding, and profitable business.

NEW! We added two quick-start guides to help you  better prepare as an Early Stage Recruiting Firm.
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Inception (startup) through the first two years of business.

Though there’s no exact definition of “early stage,” I consider it to be the period in time from inception (startup) through the first two years of business.

When most founders launch their business, they believe they will end up in category three, with a successful and rewarding company.  Unfortunately, most early-stage recruiting firms fall short and get stuck in the first two categories. 

When the reality of what's involved in moving from early stage to "mature and successful" hits, /owners usually ask themselves, "Why is running a recruiting firm so difficult?" The answer to this question often varies depending on which type of early-stage firm you fit into.

Two Types of early-stage recruiting firms

Type 1 Early Stage firm

These founders had successful recruiting industry experience before starting a recruiting firm. If you fall into this group, you probably decided to launch your own firm because of one or more of the following reasons:

  • You believed you could more effectively and profitably exploit what you’ve learned on your own.
  • You’re very entrepreneurial and prefer to work for yourself rather than letting other people tell you how to do things.
  • You want to build, own, and scale a company that provides an income beyond your own production.
  • You want the ability to sell your firm and make a sizeable profit. 

The reasons above attract a large number of people with recruiting industry experience to launch their own firms. So why do only a small percentage of these founders reach the success they envisioned? Here are the following reasons:

  • How to start and grow a recruiting firm requires very different skills and knowledge than being a successful recruiter. Without the help needed to quickly fill this gap, many founders run out of time, money, and energy.
  • Most new founders adopt the same processes they used in their previous firm. But many of the processes that apply to a larger, more established firm don’t fit firms in the startup phase.

New founders frequently underestimate the value their previous firm's people, resources, and name recognition had in their past success. They learn the hard way that being a successful recruiting firm startup is much more difficult than they anticipated!

Type 2 Early Stage firm

These founders did not have a recruiting background. Instead, they had successful careers in other industries. If you fall into this group, you may have chosen to start a recruiting firm because of one or more of the following reasons:

  • You weren't excited about the work that you were doing, or you got "phased out" of your organization and liked the idea of owning your own company.
  • You heard about the upside of the recruiting industry and wish to leverage your industry knowledge and contacts into a successful recruiting business.
  • You like talking and interacting with other people and believe the recruiting industry would play to your strengths. 

The reasons above attract many people who lack recruiting industry experience to capitalize on the relationships and expertise they’ve developed in a particular industry. Industry expertise and relationships can be a significant advantage in the recruitment industry. However, the following obstacles stand in the way of success for new founders who fit into this category: 

  • The lack of knowledge and skills in recruiting and business development can be a significant barrier to success. Unless you obtain qualified help to bridge the gap between the skills and knowledge needed and possessed, you're likely to fall short of your dreams.

Unless you’ve learned how to start and run a small service business successfully, you have additional knowledge and skills gaps to overcome.

The Solution

The above scenarios explain why most startup recruiting firm owners fall into categories 1 and 2. They're frustrated and disappointed because the hopes and dreams which drove them to start their firms have not been fulfilled.

My experience as a recruiting industry coach and advisor is that 3 out of 4 recruiting firm hires don’t work out as hoped! It’s difficult to scale with these odds. What has been your success rate in hiring internal staff?

The reality is that most of these people could have been highly successful category 3 owners instead! In most cases, the fundamental difference comes down to whether or not they chose to get the qualified help they need to overcome their particular obstacles. 

Early-stage recruiting firm owners who are committed to their success come to The Recruiters Coach to receive:

  • Qualified mentorship & training from someone who founded two successful firms and has helped other early-stage owners progress and succeed quickly.
  • Proven processes, tools, and solutions customized for your specific needs.
  • Coaching and advice to help you overcome the mental and emotional obstacles that can hold you back from your potential.
  • A caring, committed, and compassionate person you can talk to who truly understands the challenges you're dealing with.

The Recruiter’s Coach delivers the following scaling solutions and outcomes:

Owners of small/mid-sized recruitment firms face an extremely challenging environment that includes:

  • Outside pressures to commoditize your work and lower your fill-ratios, fees and margins
  • Client created challenges like filling their own jobs, using multiple competitors, unresponsiveness, closing jobs after you produce, etc. 
  • Changes in supply and demand for the people you place
  • Internal employee challenges which include bad hires, high turnover and low productivity/ engagement
  • Difficult questions on topics such as new areas of specialization, new offerings, additional locations, etc. 

So why do most struggle while some rise to the top of the industry? The most successful owners/leaders turn their problems into “growth fuel” to improve. Instead of wishing things were easier, they choose to get better!

They choose to develop themselves and their people rather than just improving processes and technology.  Since processes and technology don’t select, develop and operate themselves, their effectiveness is dependent upon people’s effectiveness.

  • Processes: This includes sales/marketing, recruiting/sourcing, client & candidate relations, competitive strategy, business decisions, finance & accounting, etc.
  • Technology: This includes selecting appropriate technology and increasing people’s proficiency in utilization
  • People: This includes hiring, onboarding, training, development and day-to-day management. The people side of the business is the most complex and challenging part for the following reasons:
  • Hiring the right recruitment professionals who are likely to are likely to succeed is very difficult. You need an objective, repeatable, approach that sets you up to make consistent, quality hires.
  • Onboarding, training, and development that’s highly-effective and not too burdensome is hard. You need efficient & effective processes that does the heavy lifting for you!
  • Providing leadership and management that brings out the best in yourself and tough. Leadership & management are two different things. Few people are good at both. You need to capitalize on what you do well and develop in your weaker areas.

Early-stage Recruiting Firm Solutions

Outcomes of Each Solution

Build skills and knowledge you need to be a highly successful owner.
You experience the benefits of recruiting firm ownership that you hoped for.
Tailored processes that fit you in the early stage that can be modified as you scale.
You earn more money with less stress even as you grow.
Tools, technology, and other resources to boost your success.
You avoid the frustration and exhaustion from excessive hours and doing everything yourself.
A simple, achievable, marketing plan that fit the stage you are in.
You build brand recognition that drives more quality clients and candidates.
Expansion of recruiting and business development skills and knowledge.
You achieve excellent results and can provide quality training to new people as you grow.

Downloads to Help People Wanting to Start Their Own Recruiting Firms

9 Questions To Answer Before Starting Your Own Recruiting Firm

Many people start their own recruiting firms, but most aren’t successful. Here is a brief guideline to help you become better prepared.

  Download PDF

Essential Steps Recruiting Firm Client Marketing

It's easy to get bogged down in the marketing details when launching a recruiting firm. This can delay your start by months, costing you thousands of dollars in lost time and revenue. This document aims to give you a good starting point.

  Download PDF

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