Challenges of Recruitment Agencies

In last 6 months, I met few entrepreneurs who are running small and medium sized placement or recruitment companies. What I understood from our discussions is that most significant challenges they are facing today are

1. In this economic downturn, the biggest cost they are bearing is office space rent. And they would be happy if their recruiters work from home. And they will be happier if they can work with freelance recruiters who get paid only on results.

2. Managing and monitoring the progress on job requirements is the second biggest challenge. They want real time status. But as of now they spend lot of time in following up with recruiters on progress. This is the time they would prefer to spend in business development or client interaction, which leads to more business.

3. They want to build a candidate database over a period of time, which will be their ultimate resource. And this should be accessible from anywhere.

There are few other problems like maintaining an updated recruiter's calendar, managing scheduling of candidate interviews.

It would help the recruitment companies if they have an IT system, which manages these tasks for them. But they are not in a position to take responsibilities of owning and maintaining an IT system.

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Permalink Reply by Chuck Summerland on February 5, 2010 at 5:20pm

Hi Manaranjan,

I work at a company that helps medium to small recruitment companies over come challenges facing growth. From my experience I would also like to add to your list that many smaller companies face challenges in

1. Payrolling contract labour with companies that have 45 to 60 day payment terms.
2. Having the insurance levels required by the client to have a contractor onsite.

With medium size companies I often see that they have grown to a size that the owners have become removed from the core business and are now more involved in chasing down invoices, managing their staff, and conducting more administrative payroll duties. There comes a point where owners either look to hire more staff to manage the back office or outsource it.