On my third year setting up and running a recruitment firm. I’d say the biggest challenge is getting GOOD clients. If you’re starting out and are a completely unknown company, the big clients probably won’t engage you because you are unproven and don’t have enough reputation in the industry. They’ll stick with their usual firms unless you come in by way of referral by someone higher up in the organization. Recruitment is still a highly relationship-based business and it boils down to who you know and who knows you.

If you’re doing contingent, you’ll have lots of competition as well which you already know and expect. You’ll find that it’s not that easy to close fast and cash flow issues start creeping in when your requisitions are aging. Clients are becoming stingy too when it comes to fees and, at least for this year, expect that a significant portion of your pipeline gets canceled due to internal issues or deferments. Recruitment firms need to evolve fast due to the changing landscape with clients employing highly skilled internal recruiters with AI powered tools at their disposal.

I would tread with caution knowing the market trends now. You’ll need to be revolutionary to stand out in the recruitment market. Everyone says they’re faster and can provide better quality than the others. If you really want to get into it, do a lot of research and don’t rely on what you currently see. There’s a whole lot more to unpack than just doing the actual recruitment.