Franchising In Recruitment

May 4, 2021 | Lily-May Poulton

With the recruitment industry in the UK generating almost £40 billion a year of revenue, yes! £40 billion! It’s no wonder that there are over 39,000 recruitment agencies in the UK. Franchising in recruitment is a fantastic way to run your own business whilst being fully supported by a franchisor and their brand.

Investing in a recruitment franchise like the one with Kenect Recruitment brings an opportunity to work within one of the most active and important industries in the UK economy. Opening a Robust Recruitment Franchise is a must!

There are many different sectors within the industry. Ranging from Industrial, Commercial, Care, Education, Construction, and Executive Search plus many others. Therefore, making a decision of what business you would like to build can be a difficult one. Understanding what really interests you and your particular skills make the decision easier. Your investment will flourish working in a sector that holds your attention.

A Robust Industry

With the industry being robust a big advantage with franchising in recruitment is that it is fairly recession-proof. Fluctuating levels of employment mean that demand from businesses can swing between a greater need for temporary staff to more permanent placement opportunities. This is dependent on their sector, and with over 90% of all businesses in the UK using a recruitment agency from time to time, there is never a lack of opportunity.

Once a decision has been made on what sector your chosen recruitment franchise will be in. Then the next decision will be is it an existing franchise or a greenfield site that you will purchase. There are pros and cons to both situations. An existing franchise will invariably be much more expensive and can run into hundreds of thousands of pounds, whereas a greenfield site is a much cheaper option and needs to be built from the ground up. However, for the smaller investor, a start-up territory gives a great opportunity to take advantage of a very stable and lucrative market.

Supporting You Along The Way

Investing in a recruitment franchise with little knowledge of the sectors can be very daunting. So the stability, support, and reputation of the

franchisor and their brand are crucial. Franchisors will offer a wide variety of support mechanisms to franchisees. These include training,

back-office support, marketing, financial advice, and in-field customer and candidate assistance. The integrity of the brand and its perception in the market go a long way. This is to ensure the business you are investing in is viewed positively from both a customer and candidate point of view.

This is even more important when considering purchasing an existing franchise. As you will be investing in the “goodwill” that the outgoing franchisee is leaving behind. As well as deciding how much your investment will be to purchase your recruitment franchise it is important to consider the other costs. The first is the franchise fees that are paid throughout the term of your agreement.

The Costs

The franchise fees are generally a percentage of your revenue and can vary quite widely between franchisors. The higher the percentage the more difficult it will be to make a healthy profit. And this is certainly the case when working in sectors with historically low margins. Balancing the franchise fees and resulting margins could be a deciding factor when tendering for new business opportunities. It is imperative you are aware of all of the costs before entering an agreement. Secondly, and what can be a substantial cost, is staffing.

Deciding when to add additional staff to your team is never easy. How quickly you get a return on your investment of extra resources will be a critical factor, as the initial cost will impact profitability. Other costs to consider are office rents, IT equipment and licenses, insurances, and factoring charges.

Preparation Is Key

Creating a business plan and strategy for franchising in recruitment and where you expect to be at certain key moments in your journey is vital. it helps you understand the level of activity and resource required at each stage of the plan. An experienced franchisor will have historical data to show you. Including, what path existing franchises took and a timeline displaying key points in growth and profitability.

This information is extremely useful for the inexperienced franchisee as it shows how other similar businesses have performed over time.

Managing the business through forwarding forecasting and revisiting the strategy on a regular basis with the franchisor is good practice. It ensures that your business remains on track to achieve your initial goals. While it can take a huge amount of work and time to make a business successful and therefore profitable. A great advantage of recruitment franchising is that you are using the brand power of the franchisor.

Technology and AI are also key for the future of your franchise, so a forward-looking franchisor is also important.


Franchising In Recruitment Strategy

Being able to use the proven business strategy perfected by a successful franchisor is an added benefit that franchise businesses have. Whilst there are costs to starting your recruitment franchise with the initial fee and ongoing franchise fees. With the support of the franchisor, the business is far more likely to succeed than if you went alone. The relationship between the franchisee and franchisor can be pivotal to the success of both parties. Mutual trust should exist allowing for open and honest communication.

The measure of success is in the retention and growth of the franchisee and the ongoing growth of the franchisor’s network. Franchising in recruitment is the way to invest right now for any smart-minding business person.

Want to know more about franchising with an industry leader? Click here

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Lily-May Poulton

Lily-May Poulton

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