How Should a Recruiter Strike Out on their Own?

The Small Business Administration (SBA), calls small business, “the heart of the economy” – and it is easy to see why when you consider the fact that small firms make up more than 99.7% of all employers, and are thought to create 75% of the net new jobs in the US economy. The picture gets even better when we look at the staffing sector in particular which hired 12.9 million workers, during 2011, up 8% from 2010. And with the well documented talent shortages still affecting many sectors of the US economy, it is easy to see why ambitious and entrepreneurial recruiters might consider throwing their hat in the ring by striking out and setting out their own recruitment agency.

However, though the US is the home of entrepreneurship, your current staffing firm may not in reality welcome your self start-up ambition as it could threaten their own status quo and market share – but there are steps you can take to make your transition away from your present staffing firm into your new independent staffing enterprise as smooth as possible and I have highlighted some of the key ones below.

Build Your Skills and Network

Your preparation for striking out on your own should (ideally) start years before you actually decide to do it. For example, working within an agency environment for several years means that you will be developing all the skills, experience and know-how to actually run an agency. However, to gain the credibility that you need to engage with corporate decision makers and talent on an independent basis, I think you need at least 10 years experience, (although this is a matter of opinion).

The other area that you should be developing throughout your career is your talent and client network, which means constantly building your Twitter, LinkedIn and Facebook connections. This means that you will have a launchpad of talent and clients to engage with from day one of your new, personal staffing venture.

But, you may need to tread carefully as many of these clients/talent may have some association with your previous company – so I have explained below how should you deal with that.

Managing the relationship with your current/previous recruiting firm

While your employer will be pleased that you are ambitious and prospering, they will naturally be threatened by the fact that you will soon be a competitor with knowledge of their company secrets, internal practices, clients and talent.

This is why it is likely that you current employer may have made you sign a non-compete prohibiting you from competing with your client for a period of time, and maybe a non solicitation, preventing you from poaching their star talent. If this is the case, you must then refrain from competition or solicitation or you could face legal action.

But, a non-compete is not an insurmountable barrier. Each is different and so you should read it carefully. How long does it last for? Are specific companies or industries listed? Is there a catchment area ? If you read it closely, there may be plenty of scope for you to start your business while honoring the non-compete. And don’t forget, once the compete period is over, then it is fair game.

In terms of communicating with your current (soon to be past employer), explain that you will honor the non-compete and non-solicit clauses, (if they exist), and this will help you to maintain a better relationship. Why is it important to maintain good relations? Because, you may find that your current employer may be willing to give you overflow work that they cannot handle, or work that doesn’t fit in with their core business model. They could provide a helping hand in your future business venture.

Striking out on your own

As I said earlier, having worked for 5 or 10 years in a staffing agency, makes you an expert in your field, so not much training is needed. Some areas you might be weak in are business finance and tax so you might think about an on-line course to help you in these areas.

The beauty of recruiting as a career is that start-up costs can be kept reasonably low. Thanks to social recruitment, much of which has no direct costs, your outlay for job advertising costs can be minimised.

If you are a one person show, then there is no need to spend out on renting office space, just work from home at no additional cost. There is no shame, as evidence shows that 53% of small businesses are home based. You can rent meeting space on an ‘as needed basis’ if you need to meet clients or talent face to face.

One new problem that you will face in the early days of your business is that you are likely to be working in isolation for much of the time. This can be emotionally challenging, as you have no one with whom to share the highs with or to get support from during the lows. It is very important that you build a support network around you to replace what you had when you had colleagues. Join a local business network, so you can get out once a week to socialize, network, meet potential clients and discuss the ups and downs of business. You can also do this through social networks, but it is recommended for your well-being that meet and network face to face on occasion.