The number of new recruitment agencies registered at Companies House grew by a record amount in 2018, with 8,448 new registrations. It is almost twice the growth of that in 2017. At the same time, the total value of UK recruitment also grew by 11% to £35.7bn in 2018. The growth of freelancing, the shortage of many skilled candidates and high employment are key drivers of the good times for the recruitment industry.
On that basis, industry outsiders would probably assume it’s easy to start and grow a temp recruitment business. But that’s not the case.
Admin limits agency growth
The problem with temp recruiting for start-ups is that placing each worker requires the same admin steps, to meet agency or client’s needs and in order to be compliant with employment or tax regulations. Many agency owners reach a ceiling on the number of workers they can actually process for roles, even with killer business development skills.
What makes compliance complex?
1. Out of date and manual processes: are the main culprit; for example, paper-based data collection still persists for candidate registration in 2019. We see often see a process with candidate data stored on an Excel spreadsheet, data and documents are exchanged by email or over the phone, notes are taken down on post-it and this information can be scattered through the organisation. All of those brings inefficiency and reliability issue, it also raises issues around GDPR.
2. Candidate communication: Compliance checks (including Right to Work) involving ID document submission and checking can be a nightmare if the candidate refuses to accept that that the recruiter has a legal requirement, or objects to the checks. In blue collar sectors recruiters are often dealing with a majority of candidates whose first language is not English: resulting in misunderstanding as to what is being is asked for. This results in frustration and delay to be placed sometimes.
3. Employment status: whilst RTW is clear cut, a candidate’s employment status is not. It depends on multiple variables including (but not limited to) the role being performed, the level of Supervision, Direction & Control and the duration of the assignment. IR35 that is coming into force this year will have an impact even more important on the hiring process and definition of the work done by contractors.
4. GDPR: the candidate’s s personal information collected needs to be treated carefully in a post-GDPR world and paper-based systems don’t easily support subject access requests and secure storage. Manual process can be a risk/liability for most organisations.
Candidates have a poor experience
The whole recruiter – candidate relationship can get off to a bad start if the process is manual and time consuming. A survey published by CareerArc in 2018 showed that 60% of job seekers reported having a poor recruitment experience and amongst those 72% went on to share that experience online of with someone directly. So, a recruiter’s reputation amongst job seekers is also at risk and the whole “recruiter-candidate” relationship can get off to a bad start if the process is manual and time consuming.
The survey also identified that ‘better communication with candidates throughout and after the applicant process’ was the key issue for candidates. Playing voicemail ping pong is annoying for the candidate and massively time consuming for the recruiter. Furthermore, in blue collar sectors this may also mean dealing with a majority of candidates whose first language is not English. In this situation a digital experience is often preferred by the candidate.
How did PB Recruitment overcome this issue?
We discussed these challenges with Phil Blowe, MD of PB Recruitment & Training. Phil started PB Recruitment after a career client side, primarily in IT and logistics. When Phil switched to agency side his contacts, business development skills and in-depth understanding of these sectors mean that the business grew rapidly and he hit the ceiling we mentioned above. That’s despite Phil explaining that logistics in particular is “a very competitive sector with a shrinking pool of candidates”.
“Anytime spent on unnecessary admin will generally mean a lost business development opportunity” says Phil Blowe.
Phil explained some of the admin issues that PB recruitment faces which include “time spent chasing timesheets, rectifying inaccurate or fraudulent timesheets, and the resulting invoice queries with clients are a killer.”
So not only does this admin limit the number of candidates that can be placed, it also eventually directly limits business development directly and reputation risk for your business.
Phil was primarily looking for a solution to help him solve his agencies admin problem. He was looking for a recruitment solution with integrated online timesheets for fast approval and accurate client invoicing – meaning less client queries. Having all personal data, process and communications between candidate agency and client managed and accessible on one platform was ideal. No more voicemails or lost emails or anonymous SMS!
“We can get candidates work-ready faster than our competitors and we can meet the needs of large assignments quicker – our clients love that!”
Successful and busy agency owners have little time to step back, assess your business and research a solution. But for Phil it has resulted in a five-fold increase in growth in the last 12 months and sight of the success that motivate him to start his own agency in the first place.
Alex Fraser, Marketing Director at Engage