The Top 8 Concepts New Entrepreneurs in Recruitment Need To Know

The sharp rise in new recruitment businesses continues to shake up the traditional business lifecycle – but creating lasting business value can be a challenge. A new report from Recruitment Entrepreneur International’s James Caan outlines top principles that entrepreneurs in recruitment should know.

September 9, 2022 – The allure of working from home combined with post-pandemic societal and tech back-up, has prompted many recruitment professionals to reconsider priorities, lifestyle, and future working practices. Growing and building your own business within this high-growth industry sector has become an increasingly attractive option and a new report from Recruitment Entrepreneur International’s James Caan has noted a significant rise in the number of experienced and successful recruitment professionals seeking to do exactly this.

One of the main challenges new business owners within the search industry face is transforming their mindset from successful biller to successful CEO, according to Mr. Caan. “Having only had experience in developing a strong track record of billings and earnings within a larger firm, they often lack the experience and knowledge in the other areas that are needed to set up a business that can be scaled,” he said. “This lack of experience can hinder them from building real value for their company (which doesn’t equate solely to income and profit, but extends into a multitude of areas within their business).”

Mr. Caan notes that there are key principles when seeking to create value within a recruitment business. This is important to recognize if the end goal is to sell the business when it matures. The constitutions of business value intertwine with each other and set the foundation for any comprehensively built, well-governed and successful recruitment business.

1. Hand pick exceptional people for your management team.

“Strategic development and growth of your management team is a priority – and an industry coach or mentor can assist with these pivotal hiring decisions,” said Mr. Caan. “Developing key people on this team with delegated managerial and operational responsibilities gives you headspace to focus on developing, executing, and reviewing your strategy and growth plans.”

2. Co-create a comprehensive talent attraction strategy.

Your business needs a clear and comprehensive talent attraction strategy, with input from all your management team, according to Mr. Caan. He notes that together with a clear narrative of your business vision this helps you generate the messaging that will be used in your talent attraction collateral. For internal hiring activities, you will often need to bring in a specialist who is solely focused on the talent attraction strategy for the business.

3. Develop your brand within the marketplace

Developing your brand within your industry or specialization/niche requires strong strategy and project management experience, to help build and develop your identity, website, and ongoing marketing activities, according to Mr. Caan. “It’s also important is to ensure that your team act as ambassadors of your brand both online and in person,” he said. “Having a dedicated marketing specialist or communications support team can help to ensure your brand is developing as your business grows.”


Recruitment Entrepreneur International is a private equity firm with 30-plus recruitment companies in its portfolio, covering numerous recruitment sectors, at various stages of growth. Founded by international businessman James Caan CBE it provides talented individuals with funding, best-in-class operational infrastructure, coaching, and management advice. Its success lies in its ability to provide the knowledge and hands-on know-how to help start-ups and scale-ups grow, scale, and materially increase profit – ensuring that its portfolio partners can achieve a high equity value on exit.


4. Embed compliance and governance into your infrastructure

Developing your business with clear corporate governance means ensuring that robust systems, processes, and procedures are fundamentally built into your infrastructure. “Corporate governance procedures should be distributed among among senior management, who are charged with the responsibility and oversight to ensure the business infrastructure can deliver long-term success,” said Mr. Caan. “Having a specialist solely dedicated to improving and implementing management and operational processes can be advantageous.”

5. Create a strategic business development plan

A clear business development strategy and a plan to execute it is important. As your business grows, diversified revenue creates more stability in profit and cashflow, ensuring a more predictable performance in the months and years to come. Many businesses seek the advice of an industry expert or business development coach to assist with market development strategy.

6. Prevent Income Concentration

There is a significant risk of income concentration when business revenue is overdependent on your top five clients and/or your top three consultants, according to Mr. Caan. “The risk is the potential exposure to your income if one or two of your top clients or consultants leave,” he said. “The strategy lies in reducing the income concentration (by spreading it over a higher number of clients and consultants) as well as reducing the likelihood of a client leaving (through quality of service) or consultant leaving (through employee incentives). Experienced coaches within the industry can help guide owners on preventing this risk.”

7. Implement standardized management reports

Having a clear management reporting system and regular review of your business’ monthly performance is important when considering key decisions for your business both now and the future and lets you make decisions based on accurate data. Mr. Caan notes that working with financial experts, you should set realistic and appropriate targets for income and expenditure while managing business performance drivers.

Related: Leadership Dilemma Unfolding at Private Equity Firms

“The ability to be on top of costs, both in terms of consultant remuneration, operating costs and any other business costs is fundamental and will help in the long-term development and growth of the business,” he said.

8. Create room for more growth; consider future plans for global expansion

This may not be top of mind as you set up your recruitment business, but Mr. Caan notes that the potential opportunity to expand your brand presence into new markets should be an area of focus as the business develops. Having future plans to expand to new regions can be a good target as part of the pathway for scaling your business.

“Seeking the expertise of a business expert with relevant experience in national and international expansion can help you understand the key things to consider,” said Mr. Caan.

Related: Private Equity Firms Invest in Raising Their Talent Game

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media

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