Singapore is 2 weeks away from the conclusion of circuit breaker and Hong Kong restrictions are gradually being relaxed. Whilst it’s too early to predict whether this slow yet positive trajectory for COVID-19 recovery will continue, is now a good time to take the plunge and start your own recruitment agency?
It could very well be. Some of the best search and recruitment firms that we know in the market today were born in the aftermath of SARS, such as Kerry Consulting. Some also launched after the global financial crisis in 2009/10, such as Argyll Scott. It is, however, important to analyse the implications of the virus in your market and region.
I’ve been involved in over 10 international recruitment startups and have learnt crucial lessons along the way. I’ve compiled a list of 7 things to think about when considering if now is a good time to start your own recruitment agency.
Timing, ramp-up and runway
A golden rule for me: never plan on collecting a single dollar in less than 180 days from launch.
You must allow time to ramp-up, no matter how well-connected or experienced you are. Whilst you may have a strong network, it still takes time to re-engage with the market and sign terms under a new brand no one has heard of before.
This point is more relevant than ever in today’s market as you must also account for less hiring activity and drawn out interviews. The caution to hire and logistics of video calls will create longer processes.
Almost always you will bill less and spend more than you had planned, so this is why it’s important to consider if you have enough runway to make the investment.
Job supply in your market
No one can be sure about when the economy will recover from COVID-19 as there are still too many uncertainties. It is, however, important to know that your market has some level of job supply or is expecting a hiring surge post-recovery.
Some markets such as E-Commerce are performing well. Although competitive, current hiring activity and expected hiring activity post-recovery would suggest this is a good market to get started in. Other markets such as Hospitality and Travel are in decline for obvious reasons. It will take a lot longer for these industries to recover and for this reason they may not be the best markets to get started in.
Another consideration is whether your client base is dominantly regional or international. If your client base is mostly Europe or US headquartered, these regions are still in the midst of the crisis and any decision they make on resuming hiring in Asia comes from the top down. If your clients are SEA or Asia based, the case trajectory is stable and it’s likely hiring could resume faster.
There’s no doubt the first few months will be extremely challenging whatever market you choose, but post-recovery is a great opportunity for new recruitment businesses, and may just very well be the catalyst for your success!
Candidate supply in your market
Whilst it depends on the industry you’re working in, there is a surplus of great talent available in the market today, far more than normal. This is a positive for new recruitment businesses, especially when the economy recovers and hiring starts to surge.
On the other hand, the most sought-after candidates in today’s market may still be employed. These candidates will naturally be more cautious when moving jobs over the coming months, even post-recovery.
Finding recruiters for your business
Finding great recruiters to join a startup has always been very challenging and one of the biggest barriers to scaling a recruitment business.
There are recruiters available in the market today that you never imagined would be. Ever. Now is a great time to tap into a pool of very highly qualified recruitment professionals who may be more open to the risk of a startup.
A start-up in theory starts at zero so the only way is up. Your competitors are likely to be in a disrupted state due to some very tough decisions they may have had to make over the last few months.
Although disrupted, competition shouldn’t be underestimated. Some of the better recruitment brands have pulled together strongly and are powering through the current state of the market.
Clients are also less likely to use agencies during these times due to cost savings. If they do resort to using an agency, you may find it challenging to win business over proven suppliers.
Competition is certainly something to consider but in my experience it’s not a force to be reckoned with, it’s a force you have to go up against. There’s a reason why there are over 3,000 registered agencies in Singapore.
Use the downtime to strongly negotiate lower costs when it comes to serviced offices, suppliers and other overheads.
Consider taking a flexible and creative approach to hiring staff, such as a ratchet increase of salary based on target achievement or tenure.
A recession or crisis can be the best time to start a company. Governments can sometimes be more lenient when they are looking to attract businesses and create jobs. Not always the case as sometimes more restrictions can be imposed. It depends on the country but it certainly should be a consideration in your plans.
There are huge challenges and risks associated with starting your own recruitment agency during COVID-19 and it’s not for the faint-hearted. However, should you be willing to take the risk, you may reap the rewards in the years to come.
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