Becoming an independent recruiter is a great career move for many professionals in the staffing industry. Perhaps it’s the right move for you. If you’ve gathered experience at an agency, learned about the ins and outs of running a business, and developed a great contact network, it could be the best move you’ll make.
That said, there are quite a few stumbling blocks you should watch out for when you want to become an independent recruiter. There are many right ways to go independent, but there are just as many wrong ways. Here are a few of the most common mistakes staffing industry entrepreneurs make.
1. You Try to Convince Clients to Come with You
If you’ve been working at an agency and developed strong relationships with some of the clients there, you may think it’s only natural to ask them to come with you.
Unfortunately, this can land you in legal trouble. Most employment contracts will contain a non-compete clause. If you change jobs, you’re not allowed to entice clients to follow you.
This restriction applies even when you start your own business. If you ask clients to follow you when you leave your current job, you could be in breach of contract.
The good news is that most of these non-compete clauses expire within a few years, but you should always check the terms of your contract. It can be difficult to maintain a relationship with a client you’re no longer working with, but once the non-compete period has expired, that client may be delighted to hear from you.
Be sure you have a pool of clients who aren’t drawn from your current client portfolio, and you’ll be in much better shape.
2. You Think You Have to Do It All
Another common mistake for staffing industry entrepreneurs is taking the “independent” label to heart. You may believe that as an independent recruiter, you have to do everything alone.
You may feel pressure to take care of every task in your new business. Financial concerns are often the reason recruiters take on tasks like payroll, marketing, and bookkeeping.
This can hinder your business’s growth. You may think you’re saving money, but the hours you spend on payroll can cost you more than you realize.
The good news is affordable help is often much closer than it seems. If you need help with marketing, talk to a marketing agency. If payroll or other administrative jobs are holding you back, talk to a back office service provider. They can take over these crucial roles and free up your time to look after your core responsibilities.
3. You Get Pricing Wrong
How much should you charge for your services? It’s a challenging question for anyone in the staffing industry. Even agencies sometimes struggle with balancing costs and their fees.
Many independent recruiters believe they have to undercut large agencies in order to win any clients. This often leads them to underprice their services, which makes it far more difficult to break even and keep the doors open.
Large agencies often achieve their prices using economies of scale. Since they’re large, they buy up more services, which drives down their costs. As an independent recruiter and small business owner, you don’t have this same advantage.
Revisit your pricing on a regular basis. You may need to charge more in order to turn a profit. You shouldn’t worry too much about this. Clients who want your expertise will pay a bit of a premium to work with you.
These are only a few of the common mistakes independent recruiters make when they set out on their journeys. If you avoid them, you’ll be well on your way to success.