Is this year your recruitment businesses year of growth?

If so, here are five recruitment business growth mistakes pitfalls worth side stepping.


If you’re planning on growing a recruitment business this year – firstly, congratulations! And, secondly, be sure to sidestep these common mistakes recruiters often make when taking a business to the next level.

MISTAKE 1: Setting Low Margins

These figures show that, despite challenges in the market, the recruitment industry is thriving. In fact, the last time we saw both income streams, permanent and contract/temp, achieve median profit for recruitment agencies highs like these was in September 2008, before the global financial crisis (GFC).

MISTAKE 2: Going Too General

You have probably heard business experts spruik the benefits of finding a niche – and, more importantly, your point of difference in the market. A common mistake many startups make when growing a recruitment business is taking a generalist approach. By spreading your target market too thin you can lose your competitive advantage. Instead, niche players penetrate deeper into the market and increase their chance of success by building a position (and reputation) as experts in their field. Remember, finding your niche might be as simple as shifting your focus from IT to digital, or from labour to construction.

MISTAKE 3: Having a lousy Back Office

There is no greater customer and candidate frustration than errors and delays due to your poor functioning back office. If you are growing a temp book, for example, first impressions count, so be sure to have your payroll, invoicing and back office processes in order, easy to use and always delivered on time. By streamlining your back office structure, you can improve the collection cycle of your invoices, meaning money in your pocket sooner. APositive also helps credit check all of your customers to reduce your risk of payment delays. And, we follow up collection activity if or when it’s required.

MISTAKE 4: Wrong Software Choice

It goes without saying that the administration can slow you – and the growth of your recruitment agency – down. In fact, we have seen many recruitment businesses lagging in growth simply because they have become totally entrenched in invoicing and payroll admin. Making the right software choices, and putting the right systems in place early can reduce admin time and costs and free you up to focus on what’s important – achieving your targets for the year ahead.

Mistake 5: Growing a Recruitment Business Too Fast

It sounds odd, but too much growth, too quickly can cause problems for startup recruitment businesses. After all, the more business you do, the greater the risk of slow paying customers, and therefore the more pressure you can feel on your cash flow. So, to smooth out your lumpy cash flow and inject the funds you need to grow at a steady and sustainable rate, inquire about our invoice finance, payroll funding and back office solutions today.

For a secure payroll service, same day invoice finance or a back office overhaul call 1800 276 748.

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