Five Challenges Facing Recruitment Agencies
April 4, 2024
Starting your own recruitment business, while very exciting, could also be one of the biggest challenges you’ll face in your career. There are so many aspects to consider. What do you call your business? Who and how many in-house staff should you hire? What should you prioritise? And so on. Then, once your agency is off the ground and business is running smoothly, there will always be plenty of business-as-usual jobs that need to be covered, regardless of you and your staff’s level of expertise.
Whether you are just starting out or running an established recruitment agency, if you have found your business struggling with any of these essential jobs, it might be time to consider outsourcing some of that work to professional services providers like Parasol. Whatever help your business needs, outsourcing enables leaving business-as-usual elements to more specialist parties, so you and your staff can focus on what you do best – recruiting.
What are professional services providers?
A professional services provider is any company that offers services to businesses, contractors, limited companies and other professional bodies that serve some sort of business need.
Digital marketing agencies are one example of a professional services provider. A company might wish to upgrade their website so that its pages are easier to find when potential customers search on Google. And so they outsource this work to a digital marketing agency, who will carry it out for either a one-off fee or a monthly charge.
Depending on the financial and structural positions a business is in, outsourcing is often seen as a convenient and cost-effective alternative to hiring permanent staff or contractors to carry out similar work.
What work can be outsourced to professional services providers?
There are professional services providers that cater to just about every business-as-usual task a company might need. Parasol, for instance, provides umbrella employment as a service to contractors. Our fellow Caroola Group company, Caroola Accountancy, provides contractor accounting services to the agile workforce. Parasol is also about to launch new services to assist our recruitment agency partners with their funding and day-to-day cash flow. Be sure to check this blog and our social media channels regularly for further updates.
Other professional services providers might take on workplace tasks like:
- business strategy;
- website building;
- office setup;
- marketing services;
- legal assistance;
- and so on.
Some providers, like Parasol, may specialise in one or two services, while others might cater to all the needs of specific industries. In all cases, while the provider takes care of certain areas of the business, the company remains under your ownership.
Why might somebody choose to outsource?
There are several reasons why a recruitment agency (or, indeed, any business) might choose to outsource some of their work. Perhaps the most prominent of these is that outsourcing business tasks removes workload from your agency’s in-house staff. If, for example, you outsource your payroll work to an umbrella company like Parasol, the job of dealing with your contractors’ pay stops falling on your recruiters. With that extra time on their hands, your recruiters can spend more time recruiting and less time getting bogged down by administrative work.
Outsourcing is also a way of gaining access to business expertise that you might not have among your staff. Let’s say you are looking to create a social media presence for your business. Rather than hiring a dedicated social media manager, or asking someone from your existing staff to learn the ins and outs of managing social media channels (a timely, costly process that will distract them from their core role), you could outsource social media responsibilities to a marketing agency. They’ll provide you with their expertise in that one area of the business, leaving your staff to focus on the areas in which they are already experts.
For agencies that are just starting out, there is also the inescapable fact that starting a business requires being able to do a wide range of business-as-usual jobs, and do them well. If you were a professional recruiter before starting your agency, you may not know how to handle all the other important areas of running a recruitment business. In this sense, outsourcing work in areas where you are not as familiar both prevents you from being stretched too thin and means you can get your foot in the industry door more quickly.
Won’t outsourcing cost money?
Most of the time, outsourcing is a business expense, and it can sometimes be a large one. After all, professional services providers need to make money, too. Many providers charge either a one-off or recurring fee for their service, depending on the nature of the service they provide. There might be times where some sort of business partnership can be arranged as well as or instead of a monthly charge, but that is not always a guarantee.
Having said that, some recruitment agencies might find that outsourcing saves their business money in the long run. By spending money on outsourcing, rather than sourcing new hires or asking your curren staff to take the work on, you will be saving money on things like:
- Staffing costs – fewer employees means fewer salaries needing to be paid.
- Training costs – any staff, new or current, asked to carry out this work will need to be trained, which costs time and money.
- Recruiting costs – the process of hiring qualified people to handle this work can also be costly.
- Office space leases – the more people on your staff, the bigger/more expensive the office space required to hold them is. Even if they happen to work remotely, home setup costs also need to be considered.
- Time – when experts are doing the work, the work happens faster. By outsourcing experts in the required fields to do this work for you, you save yourself, your staff, and your end clients time. And, as they say, time is money.
Do I have to outsource?
Of course not! Your business is your business and how you run it is up to you. But, ask yourself, are your staff overworked? Are you or your staff struggling to get everything you need done, done? Are there areas in the business that you and your staff don’t have the needed skills or experience in? Are you wanting to grow, but finding yourself held back by menial work? If you answered yes to any of these questions, outsourcing might be the answer for you.
If you want to find out more about how Parasol can help you with your business needs, please don’t hesitate to get in touch with us.