How to Start a Job Recruitment Agency in the UK

How to Start a Job Recruitment Agency

Starting a job recruitment agency means setting up a business that matches jobseekers with employers. It’s matchmaking, but with CVs instead of roses. You’ll find, screen, and introduce candidates to companies who can’t (or won’t) do all the hiring legwork themselves. Whether it’s placing a receptionist in a law firm, an IT engineer in a fintech start-up, or a forklift driver in a warehouse, you're solving two problems at once: companies need staff, people need jobs.

It’s a people business, a sales business, and — make no mistake — a serious hustle from day one.

How It Works

In simple terms: you find companies who need staff. You find candidates who need jobs. You match them. You charge the company a fee if they hire your candidate.

There are two main types of recruitment models:

• Permanent recruitment: You find someone for a permanent role and charge a one-off fee (usually a percentage of the candidate's first-year salary — often 15–25%).

• Temporary/contract recruitment: You supply workers for short-term roles and either charge a margin on their hourly pay or a fixed fee.

You’ll need to:

• Build a list of employer clients

• Source and screen candidates

• Arrange interviews

• Negotiate offers

• Handle contracts, if supplying temps

• Stay legal (GDPR, right-to-work checks, and proper business registration)

The faster you fill vacancies with good candidates, the more money you make. The slower you are, the faster you go broke.

Understanding the Process

First, you need to set up a legal entity — usually a limited company. You'll need business insurance (including professional indemnity and public liability), a CRM (customer relationship management system) to track clients and candidates, and access to job boards (which aren't cheap).

Then it’s pure graft: calling companies, pitching your services, posting ads, screening CVs, interviewing candidates, and closing deals.

Recruitment is brutally target-driven. If you’re not closing placements, you’re not earning. Relationships matter massively — both with your clients and your candidates. Burn bridges early and word spreads fast.

Possible Advantages and Disadvantages

The upsides are serious. Recruitment can be hugely profitable. A single placement at £30,000 salary, with a 20% fee, nets you £6,000 for one deal. Multiply that across multiple clients, and suddenly you're talking real money.

You also have flexibility. You can run a recruitment business from a laptop and a phone at first. It can scale — fast — if you build a good reputation.

But the downsides? Competition is fierce. Thousands of agencies are scrapping over the same clients and candidates. You’ll get ghosted by companies. Candidates will accept other jobs at the last minute. Clients will delay payments. Stress is baked into the business model.

And cash flow is a real killer early on — you might have to wait 30, 60, even 90 days after a placement before getting paid.

What Can Work as an Alternative

If you like the idea of recruitment but want something slightly different, you could consider:

• In-house recruitment: Working directly for a company, handling their hiring internally.

• Talent consultancy: Helping companies design better hiring systems without actually doing all the recruitment.

• Outplacement services: Helping people made redundant find new jobs (paid for by the company letting them go).

Each of these shifts the focus slightly, and can be less volatile than running your own agency.

Five Hard Truths

First, early months are brutal. You’ll do tons of work before seeing a penny.

Second, not every placement will stick. Candidates drop out. Clients change their minds. It’s part of the game.

Third, rejection is constant. You'll send out 50 emails and get two polite replies if you're lucky.

Fourth, job boards, CRMs, insurance — they all cost money. You need to invest before you earn.

Fifth, reputation is everything. One shady deal — sending an unvetted candidate, spamming companies — can trash your business faster than you can blink.

Anything Else I Should Know?

Niche beats general every time. It’s far easier to build a name specialising — whether that’s tech, legal, logistics, hospitality, or finance — than trying to be a one-stop shop for everything.

You’ll also want clear terms of business drawn up. Otherwise, clients will try to wriggle out of paying you, candidates will ghost you, and you’ll be left arguing over invoices instead of earning.

Finally: patience is everything. Building trust with both candidates and clients takes months. If you expect to be rich in six weeks, recruitment will break you. But if you stick it out and build it properly, it can change your life.

A Typical Day Running a Recruitment Agency

Running a recruitment agency isn’t just sipping coffee and waiting for CVs to fall into your lap. A normal day is a high-energy juggling act.

You’ll start early, checking urgent emails and any last-minute candidate updates. A candidate pulling out just before an interview? A client panicking about a new hire? Both are daily occurrences. You’ll post new job ads, chase feedback from interviews that happened the day before, and screen new applicants pouring into your inbox.

Mornings are usually heavy on admin — CV formatting, chasing references, and shortlisting. Afternoons are for hitting the phones: calling employers to pitch candidates, negotiating terms, persuading candidates why this particular job is right for them. It’s a constant game of matchmaking, persuasion, and damage control. Most recruiters live by their CRM and their phone, switching between deals at breakneck speed.

If you don't like the sound of dealing with ten problems an hour while trying to close a deal — recruitment might not be for you.

How Much You Can Earn Running a Recruitment Agency

When it comes to earnings, recruitment is a true "you get out what you put in" business.

Starting out solo, it’s common to earn very little in the first three to six months. Once deals start closing, a solo recruiter can pull in £40,000–£80,000+ a year relatively quickly if they’re working full-time and consistently placing candidates.

Established small agencies with a couple of recruiters can turn over £200,000–£500,000 annually, depending on the niche and how aggressive they are with sales. Big agencies, with a full team, niche specialisms, and retained contracts (exclusive hiring deals), can reach £1 million+ turnover.

Margins are strong — permanent placements typically net 15–25% of the candidate’s salary. Temp placements can generate recurring revenue weekly or monthly. But remember: recruitment is feast or famine. Without consistent client pipelines and candidate flow, you can have brilliant months and brutal ones.

First-Year Survival Guide for New Agencies

The first year will test every bit of your patience and nerve. Here’s how to survive:

Pick a niche. Don’t try to recruit "anything for anyone." Tech, healthcare, finance, logistics — choose one area where you can get known.

Focus on client acquisition first. Without companies needing candidates, you have no business. Call, email, LinkedIn-message — whatever it takes.

Don’t overspend early. Fancy offices, flashy CRMs, expensive branding — they won’t matter if you don't have jobs to fill.

Vet your candidates properly. Nothing ruins your rep faster than sending a useless applicant to a major client.

Get payment terms clear. 14–30 days invoicing, no "we’ll pay you when we feel like it." Get it signed, upfront.

Recruitment rewards people who are relentless, organised, and not afraid to pick up the phone when most would rather send another email.

Top Mistakes to Avoid When Starting a Recruitment Business

Thinking clients will come to you. They won’t. Until you build a name, you have to hunt.

Taking every job from every client. Niche specialism is far more profitable and sustainable than chasing anything that moves.

Ignoring candidate experience. Candidates talk. If you treat them badly, ghost them, or send them to unsuitable jobs, you will destroy your brand from the inside out.

Not chasing invoices. Big businesses delay payments as long as they can unless you stay on them. No invoice chasing = no cash flow = no business.

Burning out. Recruitment can eat your life if you let it. Set some boundaries early — or you’ll end up hating the very business you’re trying to build.

Summary

Starting a recruitment agency in the UK is a tough but hugely rewarding business if you have the right mindset. It's not about luck; it’s about relentless work, smart positioning, and never giving up after a bad day — because there will be plenty of those early on. Build a strong niche, treat both clients and candidates with respect, keep your pipeline full, and you’ll be building a business that not only survives but thrives. Recruitment isn’t easy, but for those willing to graft, it’s a real route to financial freedom and business success.

Starting a recruitment agency in the UK is not a get-rich-quick scheme — it's a real business that demands persistence, skill, and serious people skills. If you’re ready to hustle, to deal with rejection, and to build real trust with clients and candidates, it can be highly profitable. Nail your niche, stay ethical, work smart, and recruit relentlessly — because in this industry, you’re only as good as your last placement.