How To Start A Recruitment Agency in 2023

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Think of 2023’s most bustling and profitable industries and your mind races to anything AI or tech related. So, what about recruitment? The industry is quietly but powerfully making its way up, ripening with opportunities for budding entrepreneurs itching to make their mark.  

According to the IBIS World Industry report, recruitment has bolted up by $1.5 billion, from $750.5 billion in 2022 to $761.6 billion in 2023.

There’s literally no better time to get your hands dirty in one of the most dynamic, fast-paced and thriving industries like recruitment.   

It’s ever evolving, with new technologies and strategies emerging to help recruitment agencies attract and retain top talent. From advanced AI and Automation to personalized messaging and gamification, recruiters are pulling out all the stops to engage with candidates in new and exciting ways. 

This article will explore the various aspects of starting a recruitment agency, including the use of recruitment software, the cost of setting up the business, obtaining a recruitment agency license, and the best recruitment tech in the game to get you up and running.   

So, whether you are a seasoned professional looking to launch your own recruitment agency or a newcomer eager to learn more about the industry, this article is perfect for you.  

Get ready to take the first step in starting your very own recruitment agency and experience the excitement of building your business from the ground up.  

Let’s get started: 


The Headhunter  

If you're the Sherlock Holmes of talent acquisition, you're a Headhunter. You possess a keen eye for spotting rare talent, those industry gems with specialized skills and experience.

You excel at making connections, nurturing relationships, and persuading potential candidates to seize new opportunities. To be a successful headhunter, you need a killer combo of tenacity, patience, and a well-honed network.

The Temp Recruiter 

In the ever-changing world of temporary recruitment, you're the master of adaptability. You fill a myriad of roles, from brief gigs to extended assignments, catering to the fluctuating demands of the business world.

Your primary task? Offering workforce solutions for companies needing extra hands during peak seasons or project-driven hires without long-term commitments. Remember, your agency is the actual employer, so the buck stops with you for salaries, benefits, and resolving any arising issues.

The Perm Recruiter 

As a permanent recruiter, your mission is simple but significant: secure a perfect, long-term fit for the company. Whether it's sourcing candidates from job ads, social media, referrals, or your magic hat, your endgame is to find the right candidate to settle in for the long haul.

Your collaboration with hiring managers is crucial to understand the precise skills required. After successful placement, you may still monitor progress, ensuring seamless onboarding.

The Contract Recruiter 

Enter the world of contract recruitment, where it's all about project-focused, time-limited roles. You’re the expert in sourcing skilled workers for designated periods, often brought in to accomplish specific tasks or projects. Collaborating with hiring managers, you secure candidates with the right skills and availability.

Additionally, you're a deft hand at contract negotiation, ensuring each worker is onboarded efficiently and becomes a productive team member swiftly.


Retained Exec Search  

In the high-stakes world of Retained Executive Search, you're tasked with finding top-tier talent for C-suite roles like CEO, CFO, COO, CIO, and other high-powered executive positions.

With salaries typically north of $100,000, these are pivotal roles in influential companies or organizations where only the best will do. Each decision they make carries enormous weight, shaping the company's future trajectory.

Contingency Search  

Fast-paced and transactional, Contingency Search firms are like the lightning bolts of recruitment. They're all about volume and speed, taking on a multitude of open job orders daily. Their payment model? They earn their fees only when positions are filled.

Free from delivery obligations or confidentiality restrictions, contingency recruiters can offer candidates to multiple clients. If you're a company with frequent hiring needs for mid-level positions under $100,000, or facing mass hiring, contingency search is your go-to.

Niche or Specialist  

Niche or Specialist recruitment firms are like the chess grandmasters of talent acquisition. They specialize in sourcing highly skilled candidates within a specific industry, often having a comprehensive database of top-tier talent at their fingertips.

They adopt a proactive approach, mirroring retained recruiters in cultivating long-term relationships based on trust. A laser-like focus on their chosen industry allows these firms to accumulate in-depth knowledge, making them invaluable for companies with positions requiring hard-to-find specialist skills.


Planning to master a specific industry? Assess your current level of expertise in that area. Knowledge is your ally but avoid the trap of information overload. The learning curve is indeed steep, but remember, you'll navigate this terrain gradually.  

Identifying an industry or niche with a clear growth projection is mission critical, equally as important is to develop a comprehensive yet adaptable plan, resilient enough to withstand the ebbs and flows of your agency’s evolving demands. 

Here are a few pointers to get you started: 

Determine your skills and experience 

Whether you enjoy playing it safe or you're open to risks, capitalizing on your established skills can never steer you wrong. For instance, if you've invested a decade or more honing your craft in the renewable industry, your expertise puts you in an enviable position among budding recruitment entrepreneurs. So, what's the best strategy?

Leverage your strengths, trade in your extensive knowledge and unmatched expertise, and watch as the scales of success tip in your favor. 

Research the Market 

Keep up to speed with industry trends and shifting market dynamics. For instance, the increasing demand for Gen Z continues to be a hot commodity in today's market.

Consequently, recruiters are now adopting novel strategies, like social media outreach to tap into this demographic. All the while, employers are reshaping their tactics with stronger employer branding and offering hybrid/remote work models to lure and retain the younger workforce. 

Determine Your Target Market 

Once you understand your niche’s demand better, you can determine your target market. Who are the clients and candidates you want to work with? What are their needs, and how can you meet those needs? This information will help you create a marketing strategy to reach your target market. 

Assess the competition  

Recruitment is undeniably a magnet for success-driven individuals eager to climb the ladder and come out on top. This only reinforces the highly competitive nature of the industry, so it’s important you do your dirty work.  

What are your rivals bringing to the table that you aren't? Track down agencies within the same industry/niche, and critically evaluate their successes and stumbling blocks. This will help you navigate your own course, and on track as you continue to map out your business goals. 


Mapping out your business plan is one of the most significant stages when starting a recruitment agency. A well-written business plan acts as a blueprint for your recruitment business, helping you stay focused, organized, and on track, as you grow and scale.  

Here are some of the key reasons why creating a business plan is so crucial for recruitment agencies: 

Establish your goals and objectives 

Setting clear and measurable targets is the first and most critical step to a successful business plan. Goals give direction and focus and serve as a roadmap for measuring progress, unlocking growth, and celebrating wins – no matter how big or small.  

Pro tip: Accomplishing goals is easier when you break them up; set quarterly targets, as it’s less likely you’ll get derailed.

Short-term wins = long-term goals  

Attract investors 

If you’re looking to secure funding from investors, a comprehensive business plan is a must-have. You must showcase the unique benefits of your recruitment agency niche and your competitive edge that truly makes you shine.   

Highlighting a clear and compelling mission statement, a well-defined target market, and innovative strategies for candidate sourcing and client acquisition will capture the attention of potential investors. By presenting your passion, plan, and goals, you’ll have investors lining up to help you bring your vision to life! 

Identify opportunities and challenges. 

Defining potential blockers, challenges, or opportunities you may encounter is critical not only just in the planning stages but throughout your recruitment journey.  

It’s important to consider factors such as:  

  • Market saturation  
  • Economic fluctuations
  • Legal and regulatory compliance

Here are a few to consider:  

Create a budget 

Creating a business plan also helps you plan for expenses, including the cost of obtaining a recruitment agency license, investing in recruitment software for agencies, and setting up your office. Knowing your costs ahead of time will allow you to create a budget that helps you stay on track financially. 

You’re looking to make costly investments at this stage, so it’s important to be prepared. Here are some tips to get you started:  

  • Estimate startup costs  
  • Determine ongoing expenses  
  • Create a cash flow projection  
  • Create a contingency pan  

Pro tip: Find a budget template to help you budget and calculate costs.  

Evaluate your chance of success 

Evaluating your chances of success will help you identify potential roadblocks before they become major obstacles. Consider factors such as your experience in the industry, the demand, and your ability to build a strong network of clients and candidates.  

Pro tip: Research other recruitment agencies – their success stories and pitfalls. What’s a critical move they made that contributed to their success? Any companies that couldn’t overcome their obstacles?  


Understanding the regulatory landscape of the market, you’ll be operating in is critical. In today’s fast-paced and ever-changing world, laws, licenses, and regulations are crucial considerations for any recruitment agency, regardless of location.   

Identifying what kind of entity, you aim to register your agency with is important. Be aware that every country has a different type of entity structure with a different set of laws and regulations. You must also know your target market and the candidates and clients you seek to work with, which is critical for the kind of company you want to register as.  

For example, if you are hiring for EU countries, it makes no difference where your company is registered; you must be GDPR compliant. Similarly, as you work with big corporations or organizations, parameters like data security and data governance will come into play. 

It’s important to remember that specific laws, licenses, and regulations need to be followed. Think of these as the rules of the game, ensuring fair play and protecting your candidates, clients, and consultants.  

Protecting your start-up 

In the UK, no specific license is required to start a recruitment agency, but you must comply with certain regulations. These include the Employment Agencies Act and the Conduct of Employment Agencies and Employment Businesses Regulations. Stay up-to-date and on the right side of the law to avoid any hiccups.

Invest in the right insurance, such as professional indemnity and public liability insurance. Also, safeguard your data in accordance with the Data Protection Act. In this digital age, protecting your data is as important as protecting your physical assets.


Investing in recruitment technology can be a game-changer when starting a recruitment agency. A 2022 study stated that 73% of companies have invested more in recruitment technology in the past year.  

 Here are some of the best recruitment technologies to consider and why they are essential: 

Applicant Tracking Systems (ATS) 

An ATS is a software application that can help streamline the recruitment process by automating the tracking of job applicants. It can also help manage candidate data, resumes, and communication with candidates. An ATS can save time and increase productivity, making it a valuable investment for any recruitment agency. 

Recruitment Marketing Software 

Recruitment marketing software can help attract and engage candidates by creating and distributing job ads, building talent communities, and promoting employer brand. This technology can help improve the quality and quantity of applicants, ultimately leading to the best-suited candidates. 

Video Interviewing Software 

Video interviewing software can help speed up the interview process by allowing recruiters to conduct initial interviews remotely. This can save time and help reach candidates located in different areas.  

Artificial Intelligence (AI) Tools 

AI tools can help source candidates, screen resumes, and conduct initial interviews. They can help reduce bias and improve efficiency, making finding the best candidates for the job easier. 

A 2022 survey states that 42% of recruiters believe that AI will allow them to be more strategic in their work. “This study found that recruiters are embracing AI”.  

By automating some of the more repetitive and time-consuming tasks, recruiters can focus on building relationships with candidates and clients. It can also help ensure a consistent and streamlined recruitment process, leading to a better candidate experience and a better reputation for your recruitment agency. 

Investing in the right recruitment technology is critical to your agency’s success. It can boost productivity levels and save time, ultimately leading to recruiting top talent across the board.  

Now, just imagine a universe of recruitment software that seamlessly evolves and adapts to your business needs; your one-stop shop with everything at your feet. Everything mentioned above? It’s all there – from innovative video interviewing tools to smart AI, analytics, and automation – a simple yet expansive platform to help you find your true north.  

Check us out 👉🏼 Vincere recruitment software.   


It’s essential to understand the costs associated with starting a recruitment agency. The exact amount will vary depending on several factors, but it’s estimated that starting a recruitment company from scratch can cost anywhere from $3,000 to $250,000.  

This includes the costs of registering your business, obtaining a recruitment agency license, and investing in recruitment software for your agency, which can range from a few hundred dollars to several thousand dollars per year. 

Here’s a range of average costs depending on the requirements of your agency:  

  • All on your own - $3 – 10k  
  • Hands-on - $11 – 34k
  • Outsource all services - $35 – 250k  

Starting a recruitment agency in 2023 can be an exciting and lucrative venture, but it comes with high costs. Some of the essential expenses to consider include the following: 

Licensing and legal fees 

Depending on the country and state or province where you plan to operate, there may be licensing requirements for recruitment agencies. These requirements often come with fees, varying widely depending on your location. 

Office space and equipment 

 In order to operate a recruitment agency, you will need a physical location from which to work. This will likely involve leasing or buying office space and purchasing equipment such as computers, telephones, and other office supplies. 

Staffing costs 

Running a recruitment agency will require a team of employees to manage the various tasks involved in sourcing and placing candidates. These costs can include salaries, benefits, and payroll taxes. 

Technology expenses 

Technology is an integral part of the recruitment process, and you may need to invest in a variety of tools and software to manage your candidate database, track job openings, and communicate with clients. 

Marketing and advertising 

 To build your client base, you must invest in marketing and advertising efforts. This can include creating a website, running social media ads, and attending networking events. 


Depending on your location, you may be required to carry insurance coverage for your recruitment agency. This can include liability insurance, workers’ compensation insurance, and other types of coverage. 


Your website is your digital showpiece, your pièce de résistance in this rapidly transforming digital age. Pumping resources into your online presence isn't just a good idea—it's an absolute must.

Always keep in mind, first impressions can make or break your game. So, gear up and ensure your digital footprint is both impactful and indelible. According to Zippia, 79% of job seekers have used social media and online websites in their job search last year.

Utilize Recruitment Software 

Investing in the right recruitment software for agencies can help you to streamline your processes, manage your candidate database and track job placements. This can be a valuable tool in attracting and retaining clients and demonstrating your commitment to providing high-quality recruitment services.  

The cost of recruitment software can vary, with some options starting at a few hundred dollars and others costing several thousand dollars, depending on the features you need. 

the rest. Research from a Behaviour & IT journal states that it takes roughly 50 milliseconds for users to appraise your site and to decide whether or not they’ll stick around.

Does your website tick all of these boxes?:

  • Intuitive UI
  • Creative web design
  • SEO
  • CRM Integration

Here are some tips to get you off the ground:

  • Study color theory and its impact
  • Keep it simple with clear navigation
  • Use an advanced job search tool
  • Make your CTAs stand out
  • Fuss-free application process (the fewer clicks the better)
  • Humanize your brand (Include pictures and animations)
  • Make sure your site is mobile responsive

Without a solid integration, you could waste time going back and forth between systems, data gets mishandled and tedious busywork drains productivity, resulting in inaccuracies, inconsistencies and a glut of outdated candidate information.

Manual processes and inefficiencies will hurt your business. Set your agency up for success and evaluate your tech wisely.

Learn more about Access Volcanic and Vincere integration.

Search Engine Optimization (SEO) 

SEO isn't just technical jargon - it's your secret weapon that embodies efficiency and value. It drives organic traffic to your website, and provides a cost-effective marketing solution that keeps on giving, even when you're off the clock.

According to a 2020 study on SEO traffic, 90% of pages receive zero organic traffic. If your recruitment agency does not appear on the first few pages of Google's search results, then job seekers will have difficulty finding you, resulting in missed opportunities to connect with passive and active talent.

A well-implemented SEO strategy can propel your recruitment business to the top of search engine rankings, making you the go-to choice for job seekers. After all, high-ranking websites on search engines are perceived as the most trusted.

Here are some key tips:

  • Research relevant keywords
  • Use SEO-friendly URLs
  • Add modifiers to your titles
  • Use H1 tags for headline titles
  • Use H2 tags for subheadings
  • Internal linking
  • Add media

Keyword Research 

Perform in-depth research on your target audience and use industry-specific keywords to optimize your content. These targeted keywords will satisfy visitors' search queries so you can rank higher on search results.

Here are content resources for you to optimize with targeted keywords:

  • Articles
  • Blogs
  • Podcasts
  • Software
  • Podcasts
  • YouTube
  • Industrial leaders
  • Webinars
  • Industry events
  • eBooks
  • Social media

A 2019 digital marketing study stated that 254 out of 500 SMEs have only a basic understanding of SEO. High-ranking websites on search engines are perceived as the most trusted industry leaders. So, whether you're a one-man band or a global agency, if you master the art of SEO, you will soar.

Create Valuable Content 

Providing valuable content, such as blog articles, e-books, and webinars, can help you to establish yourself as a thought leader in the recruitment industry and attract new clients. Additionally, sharing this content on social media and other online platforms can help to expand your reach and build your brand. 

Ask for Referrals 

Finally, don’t be afraid to ask for referrals from satisfied clients. Word-of-mouth referrals are a powerful marketing tool and can be a great way to attract new business and build your reputation as a trusted and reliable recruitment agency. 


In today’s fast-paced world of recruitment, building and maintaining relationships with clients, candidates, and other industry professionals is essential for success in the industry.  

Networking connects you with a myriad of recruitment networks – a haven to show off your reputation, meet people, build trust and credibility, and increase your chance of getting those quality referrals.  

Recruiters also have access to a larger talent pool – and as a recruiter, any method to increase the chance of finding high-quality candidates is one to be explored. Recruiters can also target candidates with specific skills and expertise which helps when vetoing those irrelevant applicants.   

Think of the opportunities! It’s a fantastic way to stay on top of industry trends and keep up to date with the market, which is vital in a fast-evolving industry such as recruitment.  

Network and establish your agency as a trusted provider of quality recruitment services. 

Final thoughts

In conclusion, starting a successful recruitment agency in 2023 requires careful planning and strategic execution. Determining your niche and building a comprehensive business plan can help you define your target market, establish your goals, and select the resources you need to succeed.  

Understanding the laws and regulations help you stay in check and setting realistic business goals can help you operate within the bounds of the law and stay focused on your objectives.  

Building the perfect team, with a combination of industry expertise, strong interpersonal skills, and a passion for excellence, is critical to success, as is networking and building relationships with clients and candidates. 

Finally, developing a solid brand and utilizing recruitment software for agencies can help you to streamline your operations, improve your performance, and stand out from the competition. With the right strategy, resources, and commitment, starting a recruitment agency can be a lucrative and rewarding opportunity, putting you on the map to get you on the road to success.