Business Overview

This type of business requires the recruiting agency to establish positive relationships with its clients, by matching businesses with professional, well-qualified candidates.

Recruiting agencies do best when they establish positive relationships with candidates, by providing them with significant interviews with suitable companies.

As distinguished from temporary work agencies, recruiting agencies typically focus on sourcing skilled professional individuals for full-time, long-term positions.

Who is this business right for?

This business is good for people who like to reach out to others, enjoy talking on the phone with them, and want to support the development of those with professional careers by placing them with organizations looking for top talent.

What happens during a typical day at a recruiting business?

There are two facets of this business. The first major activity is finding organizations that will agree to sign a contract and pay a commission fee to a recruiter who brings a qualified professional person to the organization’s attention that the organization subsequently hires.

The other side of this business is for recruiters to find qualified professionals and build up a database of those people that might be interested in a potential placement by the recruiting agency. These professional workers may not be actively looking for a new job and may be currently employed. However, in the interests of career advancement, they may consider taking a new position, which offers better pay and greater benefits than the current job they already have.

Most of an agency’s day will be spent sending in résumés of qualified candidates and corresponding with both clients and businesses.

What is the target market?

The best clients are larger organizations who have a constant need to fill a vacancy and have steady employee turnover at the senior management levels.

The other side of the business is recruiting top talent and having a strong database of professionals to draw upon for any placement opportunities that come up.

How does a recruiting business make money?

If the organization decides to hire a person brought to them by a recruiter, then they will pay a commission to the recruiter, which is a percentage of the new hire’s salary as compensation. Another business model is possible if the recruiter is paid a monthly retainer to search for potential employees, regardless of whether a new hire is found.

To help get new business and clients, some recruiting agencies will allow clients to hire job candidates on a contract basis and pay the recruiting agency a variable commission based on the number of hours worked under the contract.

By being successful in these efforts, recruiting agencies create repeat clients.

What is the growth potential for a recruiting business?

Many recruiting agencies focus on a local area as well as people who are willing to relocate. A recruiting agency also has the potential to expand nationally and internationally.

One of the largest recruiting agencies is the Robert Half Agency, which specializes in placing accounting, finance, and technology professionals. The company has over 400 offices worldwide in many different countries. During 2015, the Robert Half Agency had revenues of over US $5 billion. The market valuation in January 2017 for the company is US $6.65 billion. The stock trades on the New York Stock Exchange as RHI.