9 Steps for Starting a Recruitment Agency in the Philippines

January 23, 2023
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Ann
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Operating a recruitment agency in the Philippines requires a lot of planning with stellar execution. You need to identify your business’ niche, understand the local laws and regulations as well as invest in the right technology. Your marketing and hiring strategy has got to be near perfect if you want to keep staying ahead of your competition. Let’s take a look in detail what you need to do.

1. Identify Your Niche

The first thing you want to do is jump into the business blindly. You need to do your market research first. Identify which industry you want to offer your solutions to - is it technology, oil and gas, or education? Then you got to assess your competition and who could be your potential clients. Develop and offer them your unique selling proposition, and test, and optimize it as you scale up.

2. Calculate the Costs

It is not cheap to start a recruitment agency. You need to pay to register your business and obtain the necessary licenses. In addition to all that, renting an office can be a major cost in cities such as Manila. To ensure that your business operates without a hitch, you need to choose the right Applicant Tracking System (ATS) and Customer Relationship Management (CRM).

Below are the possible costs that you can consider:

Technology Solutions

You can save costs on your tech stack by using a solution that combines a recruitment ATS and a sales CRM in one price such as Manatal, which starts at $15 per user.  

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License Fees and Business Registration

The cost of business registration and obtaining licenses depends on the type of business and other factors. Here are the possible costs you might encounter [1]:

1) Bureau of Internal Revenue (BIR):

i) Annual Registration Fee: Php 500

ii) Documentary Stamp: Php 75

iii) Books of Account: Php 200

iv) Cost of Printing Official Receipts: Php 3,500

v) Total Cost at BIR: Php 4,275

2) Security and Exchange Commission (SEC):

i) Business Name Reservation for 90 days: Php 120

ii) SEC Express Lane: Php 600

iii) SEC Registration Fee: Php 2,530

iv) Stock Transfer Book: Php 500

v) BIR Documentary Stamps: Php 1,500

vi) Notarial Fees: Php 1,500

vii) Total SEC Expenses: Php 6,750

3) Department of Trade and Industry (DTI):

i) Barangay level/coverage: Php 200

ii) Municipal/city coverage: Php 500

iii) Regional coverage: Php 1,000

iv) National coverage: Php 2,000

v) Documentary tax for DTI documents: Php 30

Obviously, there are other costs that you need to think about like Barangay clearance, permits and administration overheads. The numbers can vary depending on your location.

Personnel Costs

You obviously need some personnel to operate your business like recruiters, office admin, HR executives, and more. Since you are most likely going to hire junior recruiters, the estimated total pay is Php 66,000 per month[2].

These are just example figures and the actual costs can vary greatly depending on various factors. It’s always a good idea to do thorough research and possibly consult with a financial advisor before starting your business.

3. Your Business Model

Now that you have seen the possible costs, you need a business model that can determine your revenue stream. The model that you are going to choose will also influence your relationship with your clients and candidates. So be careful when choosing one because there is no one-size-fits-all approach. There is the contingency model (risk and reward), hourly model (steady income), flat model (certainty income), and retainer model (upfront income). Each model caters to different needs and scenarios.

Let’s delve deeper into each of these models and explore how they can shape your recruitment agency’s path to success:

1. Contingency: In this business model, your clients will pay you when they hire a candidate you provide. Since your income depends highly on the successful placement of a candidate, you can understand why it can be risky. But, if you have a high placement rate, the Contingency model can be advantageous.

2. Hourly: If your recruitment process requires a significant amount of time and resources, then this model might be beneficial for you as it provides a more steady income. However, it may not be as lucrative as the contingency model if you can place candidates quickly.

3. Flat: On the contrary, in the flat fee model, you charge a flat fee for your services regardless of the time it takes to fill the position or the salary of the candidate placed. This model provides certainty in terms of income and can be attractive to clients as they know upfront how much the service will cost.

4. Retainer: In the retainer model, you receive a retainer fee upfront from the client before the recruitment process begins. The retainer is usually a percentage of the estimated recruitment cost. This model provides income upfront and allows you to cover some of the initial costs of the recruitment process. However, it may be less attractive to clients as they have to pay a portion of the cost upfront.

4. Set Up Your Agency Website

The Internet is one of the places where your potential clients can find and interact with you. It has to be professional-looking, easy to navigate, and accurately reflect your company’s brand identity. This includes clear messaging about your services and contact information. As time goes by, you can include testimonials from clients to build trust with visitors.

5. Create Content for Lead Generation

Then you need to create and share relevant, valuable content that addresses the needs and challenges of your target audience. For instance, you can publish blog posts on topics such as AI in recruitment and showcase your employer’s branding. With enough useful content, you can position your business as an expert in the field, attract traffic to your website, and generate leads.

6. Use Social Media for Branding

An effective tool to increase your employer brand visibility and engage with your potential clients is social media. You can use LinkedIn, Facebook, X (previously known as Twitter), Instagram, and TikTok to regularly post updates about your agency, share your blog posts, and participate in relevant discussions to build a strong online presence. Plus, you need to keep your branding consistent across all platforms to reinforce your brand identity.

RELATED: All-in Recruitment Episode 18: GoDaddy -  Building Long-Lasting Employer Branding Strategies with a TEAM Mindset (with Alex Her)

7. Choose Management Tools

Up until now, we know that when you are starting a recruitment agency, you do more than just sourcing, attracting, and tracking candidates. You also need to manage your client relationships. So you need to use management tools to help streamline your recruitment process and improve efficiency like Trello (keep track of ongoing projects), MS Teams (collaboration tool within your team), and GSuite (create and share documents with all stakeholders.)

8. Build a Team

When building your team for your recruitment agency, you need to hire the right people because they are the backbone of your business. This is not only your team of recruiters, but also other staff who will handle the administrative tasks, marketing, and legal. So, when you are recruiting your team, look for individuals who share your agency’s values and are committed to providing excellent service to clients and candidates alike.

9. Find Clients

Finding clients is often one of the most challenging aspects of running a recruitment agency. However, there are several strategies you can use to attract potential clients. These include networking at industry events, reaching out to businesses in your niche, and leveraging your website and social media platforms to showcase your services. Remember, building strong relationships with clients is key to your agency’s success.

Conclusion

In conclusion, the Philippines' optimistic economic environment makes starting a recruitment agency an appealing venture. Despite client acquisition challenges, networking and online strategies are recommended to foster lasting client relationships. Success in the recruitment agency business hinges on a comprehensive approach, integrating strategic planning, financial prudence, effective marketing, and meaningful client and candidate engagement.

Citation

  1. Business News Philippines
  2. Glassdoor

Ann Schumann

As a former recruiter turned content writer, Ann specializes in creating engaging content. With a passion for the recruitment industry, she helps businesses streamline hiring and attract top talent using innovative solutions.

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Talent Resources & Development Director - Charoen Pokphand Group
Manatal is the best ATS we worked with. Simplicity, efficiency and the latest technologies combined make it an indispensable tool for any large-scale HR team. Since its adoption, we've seen a huge increase across all our key recruitment metrics. To summarize, it is a must-have.
Ahmed Firdaus
Director - MRI Network, Executive Search Firm
I've been using Manatal for the past couple of months and the platform is excellent, user-friendly and it has helped me a lot in my recruitment process, operation and database management. I'm very happy with their great support. Whenever I ask something they come back to me within minutes.
Dina Demajo
Senior Talent Acquisition - Manpower Group
Manpower has been using Manatal and we couldn't be happier as a team with the services this platform has provided. The application is extremely user-friendly and very well equipped with all the useful functions one would require for successful recruitment. The support team is also excellent with very fast response time.
Edmund Yeo
Human Resources Manager - Oakwood
Manatal is a sophisticated, easy-to-use, mobile-friendly, and cloud-based applicant tracking system that helps companies achieve digitalization and seamless integration to LinkedIn and other job boards. The team at Manatal is very supportive, helpful, prompt in their replies and we were pleased to see that the support they offer exceeded our expectations.
Maxime Ferreira
International Director - JB Hired
Manatal has been at the core of our agency's expansion. Using it has greatly improved and simplified our recruitment processes. Incredibly easy and intuitive to use, customizable to a tee, and offers top-tier live support. Our recruiters love it. A must-have for all recruitment agencies. Definitely recommend!
Ngoc-Thinh Tran
HR Manager, Talent Sourcing & Acquisition - Suntory PepsiCo Beverage
I am using Manatal for talent sourcing and it is the best platform ever. I am so impressed, the Manatal team did an excellent job. This is so awesome I am recommending the solution to all recruiters I know.
Bill Twinning
Talent Resources & Development Director - Charoen Pokphand Group
Manatal is the best ATS we worked with. Simplicity, efficiency and the latest technologies combined make it an indispensable tool for any large-scale HR team. Since its adoption, we've seen a huge increase across all our key recruitment metrics. To summarize. it is a must-have.
Ahmed Firdaus
Director - MRINetwork, Executive Search Firm
I've been using Manatal for the past couple of months and the platform is excellent, user-friendly and it has helped me a lot in my recruitment process, operation and database management. I'm very happy with their great support. Whenever I ask something they come back to me within minutes.
Dina Demajo
Senior Talent Acquisition - Manpower Group
Manpower has been using Manatal and we couldn't be happier as a team with the services this platform has provided. The application is extremely user-friendly and very well equipped with all the useful functions one would require for successful recruitment. The support team is also excellent with very fast response time.
Kevin Martin
Human Resources Manager - Oakwood
Manatal is a sophisticated, easy-to-use, mobile-friendly, and cloud-based applicant tracking system that helps companies achieve digitalization and seamless integration to LinkedIn and other job boards. The team at Manatal is very supportive, helpful, prompt in their replies and we were pleased to see that the support they offer exceeded our expectations.
Maxime Ferreira
International Director - JB Hired
Manatal has been at the core of our agency's expansion. Using it has greatly improved and simplified our recruitment processes. Incredibly easy and intuitive to use, customizable to a tee, and offers top-tier live support. Our recruiters love it. A must-have for all recruitment agencies. Definitely recommend!
Ngoc-Thinh Tran
HR Manager, Talent Sourcing & Acquisition - Suntory PepsiCo Beverage
I am using Manatal for talent sourcing and it is the best platform ever. I am so impressed, the Manatal team did an excellent job. This is so awesome I am recommending the solution to all recruiters I know.

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