Starting a Recruiting company?

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I have a bunch of cash in the bank and the Wife and I are interested in getting into recruiting so we can work from home.  Has anyone worked in recruiting or started a firm?  What could go wrong here?  What are going to be the biggest challenges?

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The big companies swing both ways.   This isn't even counting the many companies that abuse "temp-to-hire" to get well q... (more)

RedWolfe01 (Oct. 24, 2016 @ 11:24a) |

The IT job industry is totally fragmented. This recruiter handles company A, that recruiter handles company B. Some ... (more)

drew2money (Oct. 24, 2016 @ 2:20p) |

I used to be on many sites and then realized that for the most part everything that is handled by any of the usual staff... (more)

RedWolfe01 (Oct. 24, 2016 @ 4:01p) |

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isn't the underlying premise the same as a real estate agent?

At the beginning of my career, I worked in recruiting for a large, now defunct bank.

You need to start working this from two ends.

1) You need strong candidates, ready to be presented/hired. There should always be a pipeline ready.
2) You need paying customers. Most large companies have in-house recruiting or have long-standing relationships with the big firms. This is a chicken and egg thing. They will want you to show them you can get results, but you need clients to get results.

It might be good to specialize in a certain area. Tech, admin, finance, etc. Otherwise, with no specialty, you will have a hard time sourcing top candidates.

Modeling Agency FTW!

rufflesinc said:   isn't the underlying premise the same as a real estate agent?
  Essentially, but you make a ton more money.

tennis8363 said:   At the beginning of my career, I worked in recruiting for a large, now defunct bank.

You need to start working this from two ends.

1) You need strong candidates, ready to be presented/hired. There should always be a pipeline ready.
2) You need paying customers. Most large companies have in-house recruiting or have long-standing relationships with the big firms. This is a chicken and egg thing. They will want you to show them you can get results, but you need clients to get results.

It might be good to specialize in a certain area. Tech, admin, finance, etc. Otherwise, with no specialty, you will have a hard time sourcing top candidates.

  Thanks for the input tennis.  The big thing is getting contracts setup with companies and this could be the tricky part with no previous experience?

ICMATULKASPRMKY said:   
tennis8363 said:   At the beginning of my career, I worked in recruiting for a large, now defunct bank.

You need to start working this from two ends.

1) You need strong candidates, ready to be presented/hired. There should always be a pipeline ready.
2) You need paying customers. Most large companies have in-house recruiting or have long-standing relationships with the big firms. This is a chicken and egg thing. They will want you to show them you can get results, but you need clients to get results.

It might be good to specialize in a certain area. Tech, admin, finance, etc. Otherwise, with no specialty, you will have a hard time sourcing top candidates.

  Thanks for the input tennis.  The big thing is getting contracts setup with companies and this could be the tricky part with no previous experience?

Right. There are two ways to go about it. The "used car salesman" approach, where you search openings, find candidates and then present them for a fee. 

The other way and more sustainable is to be the "go to" recruiting contact for a company. But again, you have nothing to sell yourself with.

Start with the first option to get some traction and go from there.

Keep in mind that this is a VERY competitive business as there aren't really any hurdles to entry. I would not even entertain the thought of trying to make my full income from recruiting. 

Do some cold calling and mailing ... I get at least one slick mailer a week from a RE agent asking to sell my house, and in my work email, every month or so I get an email asking if I need help finding a new job.

Can you handle making a hundred or more calls every day and being hung up on or getting a rude response 99.5% of the time?

ZenNUTS said:   Modeling Agency FTW!
  Strippers and call girls first, move up from there.....

ICMATULKASPRMKY said:   
rufflesinc said:   isn't the underlying premise the same as a real estate agent?
  Essentially, but you make a ton more money.

  
I'm not sure you make a ton of money by being a career recruiter.

The folks who, in my experience, get the results (and hence a ton of money) are the ones with a ton of connections they made before they became recruiters. e.g. I have worked with extremely effective headhunters who were MD at some big investment bank before they lost their jobs in the 2008 downturn - now using their connections for recruiting. Even then - more than half of my job changes have been through connections and referrals where no recruiter made any money.

Career recruiters tend to become bottom feeders in the industry. I'm sure all of us get 5-10 linkedin connection requests from them every week. I used those to pad my profile up to 500 connections and no longer accept them any more. 
 

rufflesinc said:   Do some cold calling and mailing ... I get at least one slick mailer a week from a RE agent asking to sell my house, and in my work email, every month or so I get an email asking if I need help finding a new job.
  I cannot begin to tell you the amount of junk mail I get from RE agents. Either the "we want to short sell your house and stop foreclosure" offers I STILL get or the "hey, sell your house and make a bunch of $$". I would never hire an agent that resorts to spam. 

ryoung81 said:   Can you handle making a hundred or more calls every day and being hung up on or getting a rude response 99.5% of the time?
  I dunno, why would you respond rudely to someone offering to find you a higher paying job?

alamo11 said:   
rufflesinc said:   Do some cold calling and mailing ... I get at least one slick mailer a week from a RE agent asking to sell my house, and in my work email, every month or so I get an email asking if I need help finding a new job.
  I cannot begin to tell you the amount of junk mail I get from RE agents. Either the "we want to short sell your house and stop foreclosure" offers I STILL get or the "hey, sell your house and make a bunch of $$". I would never hire an agent that resorts to spam. 

  since they get paid commission on house price, they Target higher end houses , I can tell you that a sub $300k house in an average area here got maybe one mailer every month to two months. The niciest areas where i live now get mailers every week or even more. a couple days I got multiple RE agents mailers .

i never got a single RE agent mailing at my rentals ........

rufflesinc said:   
ryoung81 said:   Can you handle making a hundred or more calls every day and being hung up on or getting a rude response 99.5% of the time?
  I dunno, why would you respond rudely to someone offering to find you a higher paying job?

  If a Nigerian prince calls you to offer a business proposition that can make you millions, why would you rudely hang up on him instead of politely ask for more details about the opportunity and share your information with him

fwuser12 said:   
rufflesinc said:   
ryoung81 said:   Can you handle making a hundred or more calls every day and being hung up on or getting a rude response 99.5% of the time?
  I dunno, why would you respond rudely to someone offering to find you a higher paying job?

  If a Nigerian prince calls you to offer a business proposition that can make you millions, why would you rudely hang up on him instead of politely ask for more details about the opportunity and share your information with him

  I just had to give him my social security number. Seemed like a small price to pay for millions. After all, the funds are mine because a family member of mine had died. 

tennis8363 said:   
fwuser12 said:   
rufflesinc said:   
ryoung81 said:   Can you handle making a hundred or more calls every day and being hung up on or getting a rude response 99.5% of the time?
  I dunno, why would you respond rudely to someone offering to find you a higher paying job?

  If a Nigerian prince calls you to offer a business proposition that can make you millions, why would you rudely hang up on him instead of politely ask for more details about the opportunity and share your information with him

  I just had to give him my social security number. Seemed like a small price to pay for millions. After all, the funds are mine because a family member of mine had died. 

  since when do you have to give a recruiter your SSN?

i'm not sure what the deal with the nigerian prince comparision is, since you give nothing more than your resume. I have only used a recruiter once but as best as I can tell, there is zero risk to you


rufflesinc said:   
ryoung81 said:   Can you handle making a hundred or more calls every day and being hung up on or getting a rude response 99.5% of the time?
  I dunno, why would you respond rudely to someone offering to find you a higher paying job?

  They don't know how much you make, and they usually spend little time trying to pre-qualify you.

Basically, they're wasting your time.

stanolshefski said:   
rufflesinc said:   
ryoung81 said:   Can you handle making a hundred or more calls every day and being hung up on or getting a rude response 99.5% of the time?
  I dunno, why would you respond rudely to someone offering to find you a higher paying job?

  They don't know how much you make, and they usually spend little time trying to pre-qualify you.

Basically, they're wasting your time.

  This is from one side and from another side hiring managers do the same.

stanolshefski said:   
rufflesinc said:   
ryoung81 said:   Can you handle making a hundred or more calls every day and being hung up on or getting a rude response 99.5% of the time?
  I dunno, why would you respond rudely to someone offering to find you a higher paying job?

  They don't know how much you make, and they usually spend little time trying to pre-qualify you.

Basically, they're wasting your time.

  How much does time does it take to tell them your current salary and benefits, desired salary and benefits, and desired location ,and email them your resume?

There's good money in executive recruiting, but as mentioned, it greatly helps to have pre-existing relationship with some major companies. Most of the recruiting companies I've known have emerged from salaried corporate recruiters. They leverage their existing relationships with the company and win contracts and already know how to deliver what the company is looking for. For Fortune 500 VP recruiting, the payoff can be approx 1 year of salary, so it is pretty lucrative when you can close.

Thanks for all the great input!

Interesting wondering if FW will have a Jobs & Recruiters Forum someday.

FW10001 said:   Interesting wondering if FW will have a Jobs & Recruiters Forum someday.
  Might be an effective resource. Just having an FW account is enough to push someone to the top of the cue.

Data point:

I never am rude to headhunters because there's no point in burning a potential bridge. That being said it's very easy to tell within about 3 minutes who the clowns are that call me.

You need to know the industry and you need to network your ass off to make connections. If you have trash sway with companies, only trash talent will waste their time with you.

If a headhunter won't tell me who the opportunity is with, who the connection is, who they've placed recently that I know, how fasttracked the hiring process will be, how many other candidates there are, and the comp package within the first 5 minutes or so of calling me, I assume they are clowns phishing for my network and I might as well email the company directly.

I find that most recruiters are like used car salesmen.  Telling you they have a ton of jobs to fill for your qualifications but actually have nothing yet and just want your resume.

BWS said:   I find that most recruiters are like used car salesmen.  Telling you they have a ton of jobs to fill for your qualifications but actually have nothing yet and just want your resume.
What are they going to do with your resume if not find a job?

jd2010 said:   If a headhunter won't tell me who the opportunity is with, who the connection is, who they've placed recently that I know, how fasttracked the hiring process will be, how many other candidates there are, and the comp package within the first 5 minutes or so of calling me, I assume they are clowns phishing for my network and I might as well email the company directly.
Well, to be fair if they told you who the company was then you could just apply directly and screw with their kickback, which is what they don't want. I've never spoken to an indirect recruiter who would tell me the company name for fear of this. It's easy to find out in most cases, but I doubt most indirect recruiters would tell you the company name.

rufflesinc said:   
BWS said:   I find that most recruiters are like used car salesmen.  Telling you they have a ton of jobs to fill for your qualifications but actually have nothing yet and just want your resume.
What are they going to do with your resume if not find a job?

  
They want applicants that they can fill a position with as soon as it comes in, particularly in a "open posting" setup with a major corp.  When a "hot" listing comes out you can get 4-5 calls from recruiters within the first day if you are "on the market."  Apple had a charging/move/add/delete position that has blown up my phone several times already.  (guess the first guy didn't work out)  So they post a generic position in their field and collect active job seekers.  I tend to pick ONE company as a representative for those corps, but sometimes (like with Apple) it is out in left field and not a company I usually consider.

 
ruffles said: since when do you have to give a recruiter your SSN?

When the recruiter is a staffing firm, they are your employer.  Randstad is a good example, and my most recent employer.  Some big open posting corps (T-Mobile/AT&T, ect)  require you to register "right to represent" with your last 4 digits too.  This prevents them from having the same applicant presented by multiple staffing agencies for a position.  It is usually based on position and not applicant, so you have to authorize each time -- and can use different firms based on location/type/ect. 

RedWolfe01 said:   
 
When the recruiter is a staffing firm, they are your employer.  Randstad is a good example, and my most recent employer.  Some big open posting corps (T-Mobile /AT&T, ect)  require you to register "right to represent" with your last 4 digits too.  This prevents them from having the same applicant presented by multiple staffing agencies for a position.  It is usually based on position and not applicant, so you have to authorize each time -- and can use different firms based on location/type/ect. 

  I don't think we're talking about the same thing. I was under the impression that OP was talking about recruiters that find you a job at a company that employs your directly.

MrSamsung said:   
jd2010 said:   If a headhunter won't tell me who the opportunity is with, who the connection is, who they've placed recently that I know, how fasttracked the hiring process will be, how many other candidates there are, and the comp package within the first 5 minutes or so of calling me, I assume they are clowns phishing for my network and I might as well email the company directly.
Well, to be fair if they told you who the company was then you could just apply directly and screw with their kickback, which is what they don't want. I've never spoken to an indirect recruiter who would tell me the company name for fear of this. It's easy to find out in most cases, but I doubt most indirect recruiters would tell you the company name.

  
The point of a recruiter is their network.  If they don't have a connection that will get you in the door beyond just applying on the company's website they don't really add any value.

I, along with several partners, started a company that did recruiting and consulting in the early 2000s. Things that can go wrong:
1) Slow pay - As a new company you will do a lot of searches that only pay on fill (contingency search), and you will probably work with some smaller, start up type companies. They can be slow pay / no pay situations that will lead to cash flow issues.
2) Improperly qualified candidates - I don't mean the candidates aren't qualified for the job, I mean they won't take the job when presented. As some have mentioned, recruiters are like used car salesmen. They have to know how to "close" a candidate, and that can be very, very difficult to do. You'd be shocked how many candidates will get all the way through the process, get the offer, and then walk away. To your clients, this will reflect poorly on you as a recruiter, and they will close the req to you if it happens too often. But it will happen.
3) Insufficient network - As a startup, you'll be getting the reqs that no one else could fill, or the reqs that are open to everyone. Inability to find very difficult, specialized skill sets in a specific industry, or inability to get more generic skill sets very, very quickly, will cause you to lose those reqs.

Good luck!

Please use more than Keyword searches when qualifying candidates... I get numerous call every week from foreign speaking recruiters than have no idea what the position they are recruiting for. Find a niche and stick with it.

I suggest you work as a recruiter for an existing recruiting company for a few months to get to know the business and to build the network.

rufflesinc said:   
RedWolfe01 said:   
 
When the recruiter is a staffing firm, they are your employer.  Randstad is a good example, and my most recent employer.  Some big open posting corps (T-Mobile /AT&T, ect)  require you to register "right to represent" with your last 4 digits too.  This prevents them from having the same applicant presented by multiple staffing agencies for a position.  It is usually based on position and not applicant, so you have to authorize each time -- and can use different firms based on location/type/ect. 

  I don't think we're talking about the same thing. I was under the impression that OP was talking about recruiters that find you a job at a company that employs your directly.

  
The big companies swing both ways.   This isn't even counting the many companies that abuse "temp-to-hire" to get well qualified candidates at no-guarantee temp rates instead of paying "contractor" rates.  Much of the time you get there and find out there are "temp-to-hire" employees that have been there years and the workers still talk about the guy that finally went perm over a year ago and makes similar wages just gets benefits/holidays/vacation now. 

There is a reason that most job engines at these companies have both "Permanent" and "Contract" along with "part-time/seasonal" categories.

The IT job industry is totally fragmented. This recruiter handles company A, that recruiter handles company B. Some jobs on one website A, B, C or only one of those. Its an effing nightmare. We need the equivalent of MLS, a Job Listing Service (JLS), that has all jobs. If a company didn't have an 'in house' recruiter, then could use a third party company to weed out the idiots.

drew2money said:   The IT job industry is totally fragmented. This recruiter handles company A, that recruiter handles company B. Some jobs on one website A, B, C or only one of those. Its an effing nightmare. We need the equivalent of MLS, a Job Listing Service (JLS), that has all jobs. If a company didn't have an 'in house' recruiter, then could use a third party company to weed out the idiots.
  
I used to be on many sites and then realized that for the most part everything that is handled by any of the usual staffing companies tends to get on the two "big" boards -- Monster and one that is standard for my "industry."  Now I have a few recruiters that just have to request RTR (right to rep) for a specific job at the major companies and stick to the big 2 and sometimes check out a third but it tends to rarely have anything not on the others.  Any smaller company will troll the majors and contact directly for any jobs they have internally or restricted.  

If I was a regular 4 year engineer and not a tech then I would add The Ladders.  I tried it and found that I really liked the board and how it worked -- but that my job set was just a bit different than their Target.  



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