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1. PROJECT SUMMARY
The purpose of this project is to open a recruitment agency for the implementation of a range of recruiting services in a city with a population of more than 1 million people.
The Russian labor market is becoming more mature, and therefore the popularity of recruitment services is growing. Today, almost all companies that are looking for employees use the services of recruitment agencies. Recruitment agencies in the labor market act as intermediaries between employers and job seekers, providing the first with the selection of a candidate according to the stated requirements, and helping the second to find a job.
Thus, opening a recruitment agency is considered a promising line of business. The advantages include a relatively low initial investment, low operating costs, the possibility of doing business at home, and ease of organizing a business.
For the implementation of the project, a room is rented in a business center. The office area is 12 sq.m., and the rental price is 15,000 rubles. The office is equipped with the necessary furniture, the use of which is included in the rent.
The target audience of the recruitment agency are companies that are interested in the selection of qualified employees.
The initial investment is 480,000 rubles. Starting investments are aimed at purchasing office equipment, software, an annual subscription to a regional database of employers and job seekers, as well as the formation of a working capital fund until the project reaches payback. The main part of the required investments falls on the purchase of equipment, the share of which is 48%. Own funds will be used to implement the project.
The financial calculations of the recruitment agency take into account all the income and expenses of the project, the planning horizon is 3 years. It is anticipated that after this period, business expansion will be required. According to the calculations, the initial investment will pay off after 9 months of work. It is planned to reach the planned sales volume on the 10th month of operation. In this case, the net profit will be 158,000 rubles / month, and the annual net profit for the first year of operation will be more than 893,000 rubles. Profitability of sales in the first year of work – 34%.
2. DESCRIPTION OF THE INDUSTRY AND COMPANY
The development of the Russian economy has led to the formation of a complex labor market system. The search for specialists has become an important task for many companies, which recruitment agencies help them to cope with. Acting as an intermediary between employers and job seekers, recruitment agencies are engaged in the professional search for suitable employees for companies and employment. Currently, almost all companies interested in finding personnel use the services of recruitment agencies.
The Russian labor market is becoming more mature: the structure of personnel services, the balance of supply and demand is changing. The popularity of services for the selection and provision of personnel is growing every year. At the end of 2016, the turnover of the recruitment services market amounted to 6.5 billion rubles. The total number of vacancies submitted to agencies decreased by 18%, while the average cost of services increased.
Today in Russia there are 1,200 recruitment agencies employing more than 15,000 people.
It should be noted that 2016 was not an easy year for the recruitment services market: the unstable economic situation had a negative impact on the industry, which provoked a slight decrease in the market volume (by 5.8%). Many companies have abandoned the services of recruitment agencies in order to optimize costs, while others have tightened the requirements for hiring staff, which has complicated the work of agencies.
The main trends in the recruitment services market:
– an increase in the number of “difficult vacancies” with high requirements for experience, competence and narrow specialization;
– the impact of globalization on the labor market – more and more employees are looking for not only in other cities, but also abroad;
– cooperation with freelancers and employees who can work remotely. The remote work market is actively developing in Russia. The number of vacancies offering such work is about 35% of the total share of advertisements;
– gradual automation of all HR processes. So far, this trend has not become widespread in Russia. According to statistics from the HeadHunter portal, today only 18% of companies invest in the development of this area. However, 50% of companies are ready to allocate a budget for the automation of HR processes.
High competition in the industry forces companies to narrow their specialization. The current market structure is:
– recruiting agencies. They are looking for employees by order of enterprises and firms. Specialization can be narrowed down to providing services to employers from a specific business area;
– specialized agencies. These are narrowly focused organizations that select workers of a specific specialization;
– job search agencies. This direction provides services to job seekers in the selection of work;
– headhunters – agencies that are looking for highly qualified employees.
More than 80% of the total number of recruitment agencies is occupied by recruiting organizations. They work on the order of the employer and select personnel for a vacant position according to certain parameters. The employer pays the agency a remuneration, which is 10-20% of the candidate’s annual salary.
When opening your own recruitment agency, you need to understand the structure of the market and decide on the specialization of your organization. To do this, you should know which industries most often use recruitment services. At the end of 2016, the most active clients of recruitment agencies were:
– retail trade, restaurants, hotels – 17%
– consumer goods – 16%
– industrial production (fuel and oil refining) – 15%
– IT, telecom – 14%
– industrial production (everything except consumer goods) – 12%
– medicine – 11%
– finance, banks, investments, insurance – 10%
– transport and logistics – 8%
– consulting and service – 6%
– construction and real estate – 6%.
From these statistics, it can be seen that companies from a wide variety of industries resort to the services of recruitment agencies.
If you want to open a business with minimal investment, then a recruitment agency may be a suitable option. If desired, you can organize work at home, saving on office rent. In this regard, the amount of initial investment in a recruitment agency can vary from 250 to 500 thousand rubles. As practice shows, the average payback period for a recruitment agency is from 3 months to 1 year. However, despite the seeming simplicity of the business, there are certain difficulties. Firstly, the market is considered highly competitive: in order to win your consumer, you will need to work hard for results and credibility. Secondly, the income from recruitment services is rather unstable. Thirdly, there is a risk of unscrupulous employers or applicants, as a result of which it is the recruitment agency that may suffer.
Table 1 summarizes the key advantages and disadvantages of a staffing agency to consider when planning a business.
Table 1. Advantages and disadvantages of opening a recruitment agency
| Advantages | Flaws |
| – low initial investments;- low payback period;- the market does not depend on seasonality;- ease of business organization; – low costs in the course of operation;- no need for a large staff;- activity is not licensed;- the ability to choose different business formats | – high level of competition in the market;- unstable income;- the risk of dishonest employers and employees |
Thus, we can talk about the attractiveness of this business. A recruitment agency is a specific business. It is not difficult to open such a business, it is much more difficult to turn it into a successful and profitable enterprise. For a recruitment agency, the business qualities of an entrepreneur, his acumen and determination are important. Practice shows that profit can be achieved already in the second month of the agency’s operation. If you want to open a business without investments and have sufficient organizational skills, then a recruitment agency will become an attractive business line for you.
3. DESCRIPTION OF THE SERVICES OF THE RECRUITMENT AGENCY
This business project involves the opening of a recruitment agency that provides recruiting services. For potential employers, the agency can provide the following services:
1) CV screening. It involves working with databases, during which applicants’ resumes are selected mechanically with filtering by education, age, work experience and other parameters.
2) Selection of a candidate for a position. A better approach to finding a candidate for a position that involves an interview.
3) Refresher courses for personnel.
4) Evaluation and testing of personnel. This procedure is of interest to companies that want to improve the efficiency of their staff and get a reference for each employee. Personnel assessment is an indispensable tool for managing a company’s human resources, which allows you to assess the potential, motivation, professional suitability and other parameters of an employee.
5) Personnel leasing is a form of cooperation with employees when the company is not required to conclude an employment contract with an employee. In this case, the recruitment agency itself concludes a temporary contract with the employee.
6) Outstaffing – a process in which the agency does not select employees, but draws into its staff the already existing staff of the client company.
7) Outsourcing – the transfer by a company of certain business processes or production functions to be serviced by another company on the basis of an agreement.
8) Headhunting is a type of service with the help of which the agency is engaged in the selection of highly qualified specialists and their luring to the customer company. At the same time, the main task of the agency is to find a way to build relationships with the candidate and create conditions under which he will be ready for an offer.
9) Employment of personnel dismissed from the customer company – a service in which the agency conducts a procedure for the employment of personnel dismissed from the customer company within a certain period and under certain conditions.
The main function of a recruiting agency is to search for employees for vacancies in companies that are clients of the agency. The key tasks of a recruitment agency are to correctly assess the requirements of the customer company and promptly select suitable candidates for the vacancy. In order for the agency to work effectively, it is necessary to have a large client base. Then, having received an order, the agency will be able to quickly provide the employer with several options at once. If the waiting time is delayed, then the client will simply turn to another recruitment agency.
In general, the scheme of work with the agency’s customer is as follows: the agency accepts an order from the employer to search for personnel, fill vacancies on time. If the specialists are approved by the employer, then after a trial period of 1 month, the company pays the agency a remuneration, the amount of which is determined as a percentage of the annual salary of the hired specialist. Remuneration depends on the level of the vacancy.
The algorithm of the recruiting agency:
- Receiving an order from the employer
- Determination of requirements for a future employee
- Work with the database and selection of suitable options among applicants
- If there are no suitable options in the database, you should place ads on the Internet.
- Selection of several worthy candidates. When evaluating candidates, the agency must verify the accuracy of the information they provide. Since there is a risk of receiving false information from the candidate, which entails losses
- Organization of interviews for selected candidates with future employers
- Receipt of payment for services after the expiration of the probationary period of the hired employee (1 month)
- In the event that the selected candidate is dismissed during the probationary period at the initiative of the employer, the agency undertakes to provide a free one-time replacement of the employee.
This project involves the creation of a recruiting agency that provides the following range of services: screening, recruitment from the external market, mass recruiting, staff leasing, outstaffing, outsourcing.
In the future, it is possible to expand the range of services: organize a business school, provide consulting services, engage in personnel training.
4. SALES AND MARKETING OF THE STAFFING AGENCY
The target audience of the recruitment agency are companies that are interested in the selection of qualified employees.
Practice shows that the promotion of a recruitment agency is the most difficult stage in starting a business. The recruitment agency promotion strategy is quite specific, since direct advertising is ineffective in this case. Strong competition in the recruitment services market determines the important role of the reputation and advertising of a recruitment agency. Therefore, the basis of the marketing plan is a thorough study of the advertising campaign and methods of work.
It is impossible to engage in a business related to the selection of personnel without active, full-fledged advertising. At the first stage, promotional activities are aimed at informing potential customers about the opening of a recruitment agency. The main requirement for this promotion is a target orientation at a minimum of costs. To determine the target audience, one should study the business environment of the city, identify the most promising industries and companies. Informing can be carried out through several channels: sending information to potential customers by e-mail, cold calls with offers of their own services, presenting their agency with a portfolio or advertising booklet, participating in various business events, promoting a website on the network.
In addition, an important stage of promotion is the formation of competitive advantages, because after receiving information about your services, the client must understand why it is worth choosing your agency. Competitive advantages may include:
– convenient location of the office;
– low cost of intermediary services;
– special conditions for regular customers;
– maximum operational efficiency;
– wide database.
An advertising campaign for a car service workshop is carried out using the following tools:
– creating your own website. Many experts agree that the creation of a website and promotion through the Internet is the most effective tool for promoting recruitment agencies. Firstly, this tool simplifies the process of interaction with potential customers. Secondly, it enhances the business reputation of the organization. Thirdly, it facilitates the interaction of the recruitment agency with both parties: both with the customer company and with applicants. The website of the recruitment agency should indicate the list of services provided and their cost, working conditions, contacts. The cost of such a site will be about 30,000 rubles. In order for a site to be visited by a large number of users, it is necessary to bring it to the TOP of queries. For this, Internet tools such as SEO and SMM promotion are used. The cost of these services may vary.
– Advertising in the media. You can place an ad in a newspaper or business magazines. 1 modular placement of an advertisement in the press for ½ page will cost an average of 3,000 rubles.
– cold calls and mailings. You can independently select a database of potential customers to inform them about your services. In case of a positive reaction to the advertisement, it is necessary to conduct a presentation of the recruitment agency or provide advertising material that contains all the necessary information.
– posting ads and handing out leaflets. This tool is aimed at attracting the attention of potential job seekers.
An indicative plan for the promotion of a recruitment agency is presented in Table 2. According to the calculations, it is planned to spend 75,000 rubles on the promotion of a recruitment agency. The main part of advertising activities is planned for the first months of the agency’s opening. In this case, you can not save on advertising. Effective and competent promotion in the market is the key to the success of a recruitment agency.
Table 2. Advertising budget of a recruitment agency
| Event | Description | Costs, rub. |
| Creation and promotion of your own website | Creation and promotion of your own business card website on the Internet. The site should contain contact details, a list of services provided and their cost, working conditions, an online application form | 50,000 |
| Advertising in the media | Placement of ads in business and news publications | 15,000 |
| Cold calls and mailings | Distribution of information to potential customers, distribution of presentation materials and commercial offers | 10,000 |
| Total: | 000 rub. |
An active marketing strategy allows you to accelerate the payback process of funds invested in opening a recruitment agency and provides the necessary level of sales. Usually, the agency has from 2 to 10 orders per month. The average income of a recruitment agency is 80-100 thousand rubles in the first months of work (if 3 orders are completed within a month). In the future, the profit is 100-200 thousand rubles. It is important to note that the first month of work passes with zero profit, since the customer pays for the services after the trial period.
5. PRODUCTION PLAN OF STAFFING AGENCY
How to open a recruitment agency from scratch? The algorithm for opening a project involves the following steps:
- Register a business as an LLC or sole proprietorship.
- Create a database
- Launch agency promotion
- Find an office
- Purchase the necessary equipment
- Hire agency staff
Let’s dwell on each point in more detail.
1) Formation of the database. This step is the most important and time-consuming step. The efficiency and quality of recruiting services depend on the vastness of the database. When forming a database of a recruitment agency, the following recommendations should be taken into account:
– the database is accumulated by selecting the monitoring of various ad sites with the search for suitable resumes and vacancies and entering information into the program;
– use of software designed to work with databases of recruitment agencies. At the moment, there are many programs that allow you to work with such databases: E-Staff Recruiter, Experium, 1C: Recruitment Agency, EFSOL: Recruitment Agency, Asper, OrangeHRM and others;
– You can purchase ready-made databases. It is possible to purchase access to the databases of employment sites (avito.ru, hh.ru, job.ru, work.ru) both in the format of an annual subscription at a cost and a monthly subscription, which will allow you to evaluate the effectiveness of the product. For example, the cost of an annual subscription to the HeadHunter database is 98,000 rubles in the Rostov region, and 583,000 rubles in Russia. Paid databases are constantly updated, so that the agency will always have up-to-date information.
It takes 2-3 years to form an extensive database.
Documentation is very important in the work of a recruitment agency, which also allows you to maintain a database. Table 3 shows the main documentation that is used in recruitment agencies.
Table 3. Basic documents of the recruitment agency
| No. | Document | Characteristic |
| one | Contract for the provision of recruitment services | The contract regulates the relationship between the agency and the customer. Separately, the issues of guarantees and liability, as well as confidentiality and dispute resolution, should be spelled out. The more detailed the procedure for the relationship between the parties, the less the risk of disputes. It is recommended to show the contract template to a lawyer to make sure that the document is drawn up correctly. |
| 2 | Application for selection | This document specifies the requirements of the customer to the candidate and the general conditions of his work. The application is the same full-fledged document that needs to be sealed and signed by the parties. It is more convenient to sign one contract, to which applications are then supported as annexes. |
| 3 | Questionnaire for the applicant | In case the applicant does not have a resume, the agency should have a template application that the applicant can fill out. These questionnaires are processed and later entered into the database. |
| four | Forms of reporting of managers of the recruitment agency | Managers’ reporting allows you to track the structure of their work and evaluate the effectiveness of work on vacancies. |
| 5 | Management reporting on the activities of the recruitment agency | Management reporting allows you to systematize the work and includes: monthly reporting of managers; monthly reporting on vacancies that are in work; monthly financial statements. Maintaining these reports will allow you to control all work processes |
| 6 | Employment contract with a recruitment agency manager | Standard contract between employer and employee |
| 7 | Job description of the recruiting manager | The instructions describe all the functions that employees perform |
| eight | Resume standard | The agency must have a standard resume form that is sent to the client. Therefore, all CVs of suitable candidates must be re-formulated in accordance with this template and processed (in particular, the contact details of the applicant must be removed) |
| 9 | The structure of the conclusion based on the results of the interview | Some customers request not only a resume of a candidate, but a resume with a detailed conclusion from a recruitment agency. The conclusion should state why the candidate is approved by the agency, why it recommends the candidate, etc. For such a conclusion, a template is also required. |
Maintaining this documentation will greatly simplify the work of the agency.
2) Office search. A recruitment agency does not need a large office – an area of 10-15 square meters will be enough. m. It is desirable that the office is located in a business center or in close proximity to it. Typically, offices in business centers are already equipped with furniture and all necessary communications, which reduces initial costs. It is better to locate the office in a busy area – ideally in the central part of the city.
Moreover, the work of the agency can be organized in the home office, thereby saving on renting a room.
For the implementation of the project, it is planned to rent an office space of 12 sq. m., located in the business center. The office is equipped with the necessary furniture. The rent is 15,000 rubles per month.
3) Purchase of equipment. To ensure the activities of a recruitment agency, it is necessary to purchase equipment. To equip the office, you will need a minimum set of furniture, computers, MFPs and telephones. To organize a small office where three people will work, you will need three computer tables, several office chairs, and a filing cabinet. The total cost of furniture will be 45,000 rubles. If you rent an office with furniture, this cost item can be excluded. The cost of office equipment will amount to 80,000 rubles. You can also save a little on technology by using your personal computer for work.
In addition, professional database compilation software must be installed on the computers. The cost of annual use of the software will be an average of 50,000 rubles.
4) Recruitment. At the initial stage of the business, for the functioning of a recruitment agency, it will be enough to have two employees on the staff. It is good if employees are generalists, because when working with personnel, you will need the professional qualities of a marketer, sales manager, sociologist, and psychologist. Their salary is 10-30% of the concluded deals, i.е. the average salary of a personnel manager is 25,000 rubles.
In large recruitment agencies, the staff also includes psychologists, lawyers, a system administrator, and an accountant. Some of these functions can be performed by a manager, some can be delegated to third-party specialists in the event of such a situation. In this project, the entrepreneur performs the functions of an accountant, system administrator and manager. Cleaning of the premises is the responsibility of the business center staff and is included in the rent, so there is no need to include a cleaning lady in the staff.
When choosing employees for a recruitment agency, one should be guided by the following requirements: higher education, developed sales skills, experience in working with an array of information, computer skills, knowledge of the basics of personnel selection, communication skills, competent oral and written speech, activity, initiative.
6. ORGANIZATIONAL PLAN OF THE RECRUITMENT AGENCY
When planning how to open a recruitment agency, it is necessary to take into account the legal norms of business legalization. Recently, the activities of recruitment agencies are not licensed.
The initial stage of opening a recruitment agency is registering a business with government agencies. To conduct commercial activities, an LLC is registered with a simplified taxation system (“income” at a rate of 6%). To register a legal entity, you must pay a state duty of 3,000 rubles. The costs of registering a business include the costs of printing and opening a bank account.
In addition to registering as a taxpayer, you must register with social funds. It is also necessary to open a bank account for mutual settlements with clients. It is recommended that you seek the services of a lawyer to draft a sample recruitment agency contract. The cost of legal services will be about 1-2 thousand rubles.
Types of activities according to OKVED-2:
– 74.50.1. “Employment Services”
– 74.50.2. “Recruitment Services”
The staff of the organization includes two managers-recruiters, whose duties include:
– selection of mass and linear personnel;
– continuous monitoring and evaluation of the labor market. Maintaining a database;
– direct search for candidates;
– conducting interviews;
– questioning, assessment of personnel in terms of competencies and knowledge of the professional sphere;
– preparation of interviews with the management team, coordination of deadlines, organization of a meeting with the candidate;
– processing resumes and application forms of candidates.
The work schedule of the recruitment agency is from 9:00 to 18:00, days off Saturday, Sunday.
Table 4 shows the staffing and payroll of a recruitment agency. The total wage fund is 97,500 rubles.
Table 4. Staffing and payroll
| Job title | Salary, rub. | Quantity, pers. | FOT, rub. | |
| Administrative | ||||
| one | Supervisor | 27 000 | one | 27000 |
| Industrial | ||||
| 2 | recruiter manager | 27 000 | 2 | 54000 |
| Total: | RUB 75,000.00 | |||
| Social Security contributions: | $22,500.00 | |||
| Total with deductions: | $97,500.00 |
7. FINANCIAL PLAN OF THE RECRUITMENT AGENCY
The financial plan takes into account all the income and expenses of the recruitment agency, the planning horizon is 3 years. It is assumed that after this period, expansion of the business will be required.
To launch the project, it is necessary to calculate the amount of start-up investments. To do this, you need to determine the cost of acquiring equipment and software, advertising and the formation of working capital to cover losses in the initial periods.
In accordance with financial calculations, the project requires the attraction of funds in the amount of 480,000 rubles. The main part of the required investments falls on the purchase of equipment – 48%, the share of expenses for the first month of rent – 3%, working capital – 31%, advertising – 16%, and other items of expenditure – 2%. The project is financed by equity. You should pay attention to the amount of working capital – this should be a sufficient amount, since the organization will receive the first income only from the second month of work.
The main investment cost items are shown in Table 5. The Equipment cost item includes office equipment, software, and the acquisition of access to the regional database of applicants.
You can reduce the amount of initial investment by refusing to purchase a ready-made database and cutting advertising costs. In this case, the starting capital of a recruitment agency can be from 300 to 500 thousand rubles. However, it should be understood that by saving on advertising and the database, the agency complicates the work process and runs the risk of being left without sales in the first months. Therefore, it is recommended not to save on these items in order to ensure income from the start of the business.
Table 5. Investment costs
| Name | Amount, rub. | |
| Real estate | ||
| one | Rent for 1 month of work | 15,000 |
| Equipment | ||
| 2 | Office equipment | 228 000 |
| Intangible assets | ||
| 3 | Launch advertising campaign | 75 000 |
| four | Business registration | 10,000 |
| working capital | ||
| 5 | working capital | 150 000 |
| 6 | Expendable materials | 2000 |
| Total: | 480 000 |
Expenses include rent, advertising, depreciation, payroll and other expenses (Table 6). The amount of depreciation is determined by the straight-line method, based on the useful life of fixed assets in 5 years. Fixed costs also include tax deductions, but they are not taken into account in the table, since their size is not fixed and depends on the amount of revenue.
Table 6. Fixed costs
| Name | Amount per month, rub. | |
| one | Rent | 15,000 |
| 2 | Advertising | 5000 |
| 3 | Depreciation | 3 800 |
| four | Utility payments and the Internet | 5000 |
| 5 | FOT | 97 500 |
| 6 | Other | 3000 |
| Total: | 129 300 |
Thus, fixed monthly expenses were determined in the amount of 129,300 rubles.
8. PERFORMANCE EVALUATION
The investment attractiveness of this project can be judged on the basis of simple and integral performance indicators. The change in the value of money over time is taken into account using the discounted cash flow method.
The payback period for a recruitment agency with an initial investment of 480,000 rubles is 9 months. The average sales volume per month is 7 orders. Based on this, the net monthly profit of the project upon reaching the planned sales volumes will be 158,000 rubles. It is planned to reach the planned sales volume for the tenth month of operation.
The annual volume of net profit for the first year of operation will be more than 893,000 rubles. Return on sales for the first year of operation is 34%. The return on investment is 28%, and the internal rate of return exceeds the discount rate and is equal to 15.6%. The net present value is positive and amounts to 995,546 rubles, which indicates the investment attractiveness of the project.
The recruitment agency’s financial plan takes into account the optimistic sales forecast that can be expected due to access to the database and the high effectiveness of the advertising campaign.
9. RISKS AND WARRANTY
To assess the risk component of the project, it is necessary to conduct a risk analysis. The risks of a recruitment agency are quite specific and require the development of specific measures to prevent them.
– high competition in the market. Customer companies prefer to turn to trusted agencies that have a certain weight in the market, since initially the customer and the agency treat each other with distrust. Thus, the presence on the market of stronger agencies that have managed to prove themselves is a negative factor for the new agency. At the same time, standard measures of competition will not always be effective – for example, reducing the cost of services. The customer will not save on a service that requires guarantees and high quality. Reducing this risk is possible by creating your own customer base and creating competitive advantages: an extensive database, operational efficiency, convenient conditions for the customer and a loyalty program for regular customers.
– an increase in the cost of rent, which will lead to an increase in fixed costs and may affect the financial condition. It is possible to reduce the likelihood of risk by concluding a long-term lease agreement and choosing a conscientious landlord.
– sales seasonality. Seasonality in the work of recruitment agencies is not pronounced, however, it should be borne in mind that the less active months are December, April, July and August. This is due to the fact that during these months people are the least looking for work. This does not apply to employers’ applications, but a decrease in the number of candidates complicates the work of the agency and carries the risk of non-fulfillment of the order. To minimize the risk of seasonality, it is necessary to actively work with databases.
– information risks. The human factor has a huge impact on the work of the agency. In the process of work, the following problems may arise: the applicant provides false information about himself; the employer took the candidate on probation and then hired him informally, hiding this from the agent. In the first case, the agency must verify all information provided by the applicant. In the second case, the agency must execute all transactions in writing and within the framework of the law, carefully prescribing the client’s obligation to pay, or requesting an advance payment for their services.
– business underfunding. The specifics of the activities of recruitment agencies is that the agencies plan their budgets based not on the absolute amount, but on the degree of probability of receiving it. To minimize the risks of underfunding, a recruitment agency needs to legally correctly draw up all contracts.
– delay in payment under contracts. This risk is quite serious and can lead to financial problems. To minimize this risk, it is recommended to clearly define the relationship of the parties and methods of dispute resolution. In particular, provide for sanctions against the customer in case of non-compliance with the terms of payment for services.
– the risk of the theft of the “database” of employers and job seekers by the employees of the agency when they are dismissed. To minimize the risk of database theft, it is necessary to provide personalized access to the database (user identification when logging in, the use of a “electronic key”), as well as the use of reliable software when creating the database.
– negligence of employees, leading to losses, lack of motivation, which leads to low work efficiency. Unsatisfactory performance of agency employees can lead to low sales and financial losses. To avoid this, systematic control, financial motivation, and standardization of personnel work are necessary. The easiest way to reduce this risk is at the recruitment stage. It is necessary to carefully select employees and offer them favorable working conditions that can attract experienced employees.
Generalized data on the analysis of the risk component of the project are shown in Table 7. Thanks to the quantitative risk assessment, it is possible to establish what managers should focus on and what measures should be taken to minimize losses.
Table 7. Quantitative Risk Analysis
| Name of risk(risk groups) | Probability of occurrence (0-1) | The significance of the risk for the activities of the enterprise (0-10 points) | Risk assessment (item 2*item 3) |
| Reaction of competitors | 0.9 | 9 | 8.1 |
| Rental problems | 0.2 | one | 0.2 |
| Seasonality of sales | 0.3 | 2 | 0.6 |
| Information risks | 0.9 | eight | 7.2 |
| Business underfunding | 0.6 | 7 | 4.2 |
| Delay in payment under contracts | 0.5 | eight | 4.0 |
| Risk of database theft | 0.4 | eight | 3.2 |
| Staff problems | 0.4 | eight | 3.2 |
According to the above calculations, the most serious risks are the risk of competitors’ reaction and information risk. In the first direction, it is necessary to pay special attention to the formation of competitive advantages, and in the second – to carefully check the information about each customer and candidate.
Thus, in the work of a recruitment agency, a well-functioning system for searching and recruiting personnel, a system for attracting customers, the ability to quickly respond to changes, know the trends in demanded positions and carry out high-quality work on the formation of a database are important.
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