How to start an HR Consultancy/Recruitment Agency in India

India presents a pool of talent making it a potential ground for many leading companies across the globe to hunt for manpower in our soil. Besides, a major chunk of our population resides abroad that amounts to a wooing total of over 25 million. However, there exists a lack of proper channel that has kept the present population oblivion of the prospects available in India and abroad.

This is where HR and Recruitment agency make their entry playing a major role in channelizing today’s youth with better opportunities on the employment front unleashing their talent and exploring their zeal.

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What does an HR Agency do?

HR Agency plays an important role in bridging the gap between companies, businesses, and job seekers. It aids companies to find lucrative employees for their business and at the same time assists job seekers in zeroing on a job that fits their educational qualification and capabilities.

There has been a surge in recruitment agencies in India that has risen at a constant pace of 15% every year since 2014. The recruitment firm offers employment on contract, temporary, part-time and full-time basis to the companies based on their need. At present, the agencies concentrating on supplying temporary workforce dominates the market size by 75% and fulltime corresponds to 12%.

Thus, the prospects of starting an HR/Recruitment agency in India is much higher deeming to the various opportunities it lays out for businesses and workforce.

Tips to start a Recruitment Agency

How to select which sector to start with?

Understand the Market Statistics

Concentrating on a niche sector such as Finance, Banking, Lawyers, Freelance, IT, etc. allows the recruiter to be sorted with the needs and build more contacts. An extensive R&D about the current market trend and which sector generates maximum business is needed.

Ask these questions:

• Which sector must I choose? IT, Banking or Engineering?
• Is there a demand for these jobs?

Doing proper homework of the current market trend and understanding which industry will generate fruitful returns is the crux of any business. And in the case of starting an HR/ Recruitment firm, it is a must. So, in case you are planning to start recruitment or HR consultancy firstly decide on which industry you wish to concentrate and what type of employment agenda you wish to follow.

For example – If you are planning to start an IT related recruitment agency decide whether you will be targeting candidates on a contract, part-time, full-time basis or both.

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Study your competitors

Do a quick study of other recruitment agencies that deal with the same sector as of yours. Later try to understand the challenges and benefits it poses. This can be based on the owner’s experience as well as the current market trend.

Build Database

A recruitment agency is nothing without Businesses and Job Seekers. Thus, building a database of clients and potential job seekers is an important element for newbie agencies. Now, how to generate clients and how to reach out to job seekers. Here are a few easy tricks:

How to build a client list and how to get Jobseekers for those clients?

Take part in Job Fairs

Get in touch with organizers of Job/ Career fairs as they are a lucrative medium of introducing oneself with businesses who deal in your niche. Participate in Job fairs wherein you can meet potential clients for your firm. You can also tie-up with few top colleges that deal in your niche sector organizing job fairs in their premises. These fairs witness the huge amount of crowd mostly of job seekers who are in look out for a job.

Example – Participate in the job fairs and offer them speeches on topics like How to use Social Media for the Recruitment? How to find the Right Fitting Job? etc.

Call your clients

As a new agency, no clients or job seekers will approach you directly. It depends upon how well you market your agency. As a new agency, you need to do some R&D and hard work like checking through phone directories or Yellow Pages and calling up the clients who deal in your niche.

Printing business cards, or pamphlets and distributing it in malls, business parks with your agency details will aid businesses to get acquainted with you and reach out to you later if in need making it a potential way of reaching out to job seekers and clients.

Stay updated

New into Recruitment business? In search of clients? Well, then keep your eyes and ears wide open. Check out on Newspapers, Business Classifieds columns about which company has published an ad for which position. Also, check if any new firms are opening in your vicinity. If yes, grab the opportunity and without wasting time reach out to them. Contact their management team and find out if there are any vacancies that they are trying to fill.

Use every opportunity to network with people

Suppose there is a recruitment agency in your vicinity which is to shut down soon, go and approach them. Ask them if you can acquire their company database and list to continue with the business. Try your best; you never know where it can reach you.

Connect through Social Media

Social Media has been a growing potential field for recruiters, businesses and job seekers to reach out to each other. Follow businesses and executives on Twitter, tweet about them, and participate on the contents they post. LinkedIn is also a great platform where you can follow them and stay updated regarding the latest openings and news. Message them on LinkedIn and introduce yourself. Ask them whether there are any vacancies to be filled and how you can help them in finding lucrative individuals for the position.

Google Search

Search for a growing business in your location, and enlist their contact numbers. Call up the companies and pitch about your agency. Approach the companies personally and hand over your Card with details to the receptionist pitching about your agency.

Create Website

Opening a website and selecting a domain is the best way of reaching out to the clients. Choose a good name and URL that does justice to your Business Name. Get into contracts with potential clients and job seekers through your website to make the reach easy.

Advertise your Agency online

Advertising is always useful whether for selling a product or a service. With the advent of the internet and a number of tools, this task is much eased out. You can place ads on top employment forums, groups and portals to attract clients and job seekers.

Use of Technology has been the latest technique in aiding recruitment and analyzing talent.

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What is the scope of technology in HR sector?

The advent of technology has helped in easing the otherwise tiresome process of collecting data, storing and its maintenance. Many start-up recruiting agency is tapping into bringing on board advanced technology to meet their recruitment needs and address the mismatch of Talent. Below listed are few examples explaining how technology is used by few HR startups for easing the process of hiring and lessening talent mismatch.

1.  Darwin Box

A cloud-based HR solutions Firm, Darwin Box, offers authentic recruitment solutions to top companies that includes meeting the core HR needs, employee engagement, performance management and much more.

Using a cloud-based platform, the AI engine allows recruiters in shortlisting applicants by analyzing the job description and the employee profile. Thus, in case there are 600 applicants who have registered, the system will shortlist around 10 to 20 applicants picking the keywords who will be later contacted by the firm. This is time saving, economical and brings in better talent on board.

The firm is started by Chaitanya Peddi, Rohit Chennamaneni, and Jayant Paleti and serves to over 100 companies including Spencer’s, ekart and much more.

2.   Belong

Established in 2014, Belong is an HR startup that offers high-tech recruitment solutions to top companies. Currently, it serves Amazon, Cisco, Reliance Jio, Thoughtworks offering them high-end talent using the technique of data science and predictive analysis.

Belong’s technology assists companies in discovering talent who fit perfect for the job profile using algorithm techniques that aids in accelerating hiring cycle and engage in direct interaction with candidates.

In 2017, the start-up launched by BITS alumnus Vijay Sharma raised a whopping series B funding of $10 million aided by Sequoia Capital.

Legal Formalities

Step 1: Register your Company

The very first step is getting your company registered. Registering your company aids in gaining benefits in matters of loans, transfer of shares in addition to limiting the liability on each shareholder. You must thus register your firm as either Partnership, Proprietorship, Limited Liability Partnership, Private Company or a One-person Company. Knowing well, what is your requirement, you can register as either following the process required for each.

Step 2: Register Under GST and various Government Schemes

After registering the company, the next step is getting the necessary registrations done. This includes GST registration and registering under MSME, and much more.

• Unlike before no service tax registration is required, it is replaced by GST, i.e. Goods and Service Tax.
• If yours is a small, Medium or micro industry registering under MSME will aid in gaining easy bank loans, easy repayment, tax benefits and exemption in certain taxes.

[MSME is also known as SSI Registration. If you want to know more about it and wondering why should one register for it, refer to our article "How to get online SSI Registration in India "]

Step 3: Recruitment Agency (RA) Licensing

Recruitment firm who provide employment to Indian citizens in overseas must hold the Recruiting Agency License (RA) which is a mandatory license. They must get themselves listed under the Protector General of Emigrants (PGE) by the Ministry of Overseas Indian Affairs as per the Emigration Act, 1983.

Since the recruitment agency of Viraj deems to offer employment for Indian Citizens to the overseas client, he must compulsorily avail for the RA License.

Process as follows

• The agency must submit an application for becoming a Recruitment Agent to the Ministry of Overseas Indian Affairs.
• Submit a DD for an amount of Rs 25,000/- drawn in favor of PAO, MAIO, New Delhi
• Submit a Bank Guarantee worth Rs 20 lakhs
• Submit the mentioned documents along with the application form
• Once the application is approved the agency will be provided a Recruiting Agency License (RA)

Documents Required

• Colored Passport size Photograph of Promoters
• Document enlisting detail of business activity of the last five years
• A signature specimen of promotors
• Statement of Balance Sheet of promoters
• IT returns of Promoter
• Graduation Certificate

(The promoter of the agency must provide all the above documents)

Conclusion

You can now start a recruitment agency, if you still need guidance or is obscure with the process, Afleo.com will simplify it for you. With the guidance/help of our experienced and trained professionals will help you in achieving your goals.

To know more details or to Register Private Limited Company, please click here or fill below form to get in touch and get your queries solved.