How to start a recruitment agency in the UK, and win your first clients.
Most guides stop at company registration and software. The part that decides whether an agency survives its first year is later: who your first 3 clients are, where your first candidates come from, and how you get found. This guide covers all of it, written by a recruitment marketer with 20 years in the sector.
To start a recruitment agency in the UK, you pick a niche you already know, choose a billing model, form a company, follow the Conduct Regulations 2003, set up a simple tech stack, and then spend your first 90 days on client and candidate acquisition. No general licence is required, but the rules on fees, contracts and pay are strict.
The 7 steps, in order
- Choose a niche you can talk about for an hour. A specialist is easier to find, easier to trust and easier to refer than a generalist. Pick a sector and a level, such as finance directors, care home managers or warehouse supervisors, where you already know the market and the people.
- Choose your billing model. Contingent permanent, retained search, or temporary and contract supply. The model decides your cash flow, your legal duties and your software, so decide it before you spend anything else.
- Form the company and cover the basics. Register a limited company with Companies House, open a business bank account, take out professional indemnity and public liability insurance, and register with the ICO as a data controller unless you are exempt.
- Write terms of business before you take a brief. Fee basis, payment terms, rebate or replacement period, and what happens if a candidate is introduced twice. Have a solicitor read them once.
- Set up the minimum tech stack. A domain and email, a CRM or applicant tracking system, LinkedIn Recruiter or Sales Navigator, and a way to log every candidate consent. Start lean and upgrade when volume demands it.
- Build the marketing foundations. A one-page website that names your niche, a LinkedIn profile that does the same, and a short list of target clients. This is the step most guides skip, and the one covered in detail below.
- Run a fixed 90-day acquisition plan. Weekly client conversations, a steady supply of candidates, and a measure of what is working. Details in the 90-day section.
Which billing model should you start with?
Your model sets how quickly you get paid and how much money you need to survive until you do. Be honest about your runway before choosing.
| Model | How you get paid | Cash flow | Main risk |
|---|---|---|---|
| Contingent permanent | A fee when your candidate starts, usually a percentage of first-year salary | Nothing comes in until a start date, then invoice terms apply, often 30 days | Several months with no income, and fall-throughs after offer |
| Retained search | Part of the fee up front or at set milestones | More predictable, but clients need convincing before they commit | Hard to sell with no track record |
| Temporary and contract | A margin on every hour worked, invoiced to the client | You pay workers weekly and wait for the client to pay you | Funding the gap, plus the full set of agency worker rules |
General model comparison. Fee percentages and payment terms are negotiated, so agree yours in your terms of business.
UK legal basics for a new agency
There is no single licence to apply for. Instead you must follow the Employment Agencies Act 1973 and the Conduct Regulations 2003. GOV.UK sets out the rules in plain terms, and they are worth reading in full before you sign anything.
| Area | What the rules say | What to do |
|---|---|---|
| Fees to work-seekers | You cannot charge a work-seeker a fee for work-finding services | Keep every fee on the client side |
| Paperwork | Work-seekers must receive a key information document and written terms before you start looking for work for them | Build both into your onboarding |
| Pay | Employment businesses must pay the temporary workers they supply for all hours worked, even if the hirer has not paid or authorised a timesheet | Model your cash flow on paying first and collecting later |
| Working time and wages | Workers must receive at least the National Minimum Wage and holiday pay, and must not be required to work more than 48 hours a week | Check rates and contracts against current limits |
| Restricting workers | You cannot stop someone working elsewhere or ending their contract with you | Keep restrictive wording out of your documents |
| Special sectors | Supplying labour in agriculture, food processing and shellfish gathering needs a Gangmasters licence. NHS supply usually needs framework accreditation | Check before you choose a niche in these sectors |
Source: GOV.UK, Employment agencies and businesses, checked 20 October 2026. This is a summary, not legal advice.
What changed in 2026
The Fair Work Agency opened on 6 April 2026, with National Minimum Wage compliance as its first priority. Also from 6 April 2026, tax law makes agencies jointly and severally liable for unpaid PAYE in some supply chains, which matters if you place contractors through umbrella companies. If you plan to run temporary or contract supply, take advice from an accountant who works with agencies before your first payroll.
A new agency rarely fails on paperwork. It fails when the first 3 clients do not arrive fast enough to cover the months before the first invoice is paid.
Winning clients and candidates: your first 90 days
This is the gap in most start-up guides. They say to use LinkedIn and your network, and stop there. A plan with numbers is more useful. This one assumes you are running alone and working a single niche.
- Days 1 to 14: define the offer. Write one sentence that names who you place, for whom, and what you do differently. Put it at the top of your LinkedIn profile and your one-page site. Make a list of 50 target employers who hire that profile repeatedly.
- Days 15 to 30: start conversations, not pitches. Contact the hiring managers on your list with a specific observation about their open roles or careers page. Ask for a short call about how they hire. Aim for 5 calls a week.
- Days 31 to 60: take your first briefs and publish proof. Work every brief with a shortlist in days, not weeks. Share one useful market insight a week on LinkedIn: salary ranges you see, how long roles take to fill, what candidates ask about.
- Days 61 to 90: tighten and repeat. Count calls, briefs, submissions, interviews and placements. Drop the activity that produced nothing and double the one that produced a second conversation.
Where your first candidates come from
Candidates choose agencies they can see. A short, honest job advert gets read, and a named recruiter with a visible track record gets replies. Write each advert as if for a single person, put the salary range in it, and make sure it can be found by Google for Jobs. Once you have a client, check how their own careers site treats applicants. The free tools include a careers site check, and what it finds is a useful opening conversation for a new agency.
Where your first clients come from
Almost all early business comes from three sources: people who already know you, employers you contact with a specific reason, and referrals from your first placements. Paid directories and generic job boards rarely repay a new agency. Your marketing job is to make the first group easy to remember, the second group easy to start with, and the third group easy to ask.
Do you need an applicant tracking system on day one?
You need a record of every candidate, every consent and every conversation from the first day, because UK data protection law applies from your first contact. That can be a simple CRM. Choose an applicant tracking system when you have enough volume that spreadsheets cost you time, not before.
If you want a hand with the marketing assets themselves, Studio generates a job spec, advert, search strings, outreach messages and a client sell sheet for each role from one brief. Solo is £149 per seat per month, with a 7-day trial that needs a card at sign-up. You can see how it fits in on the Studio page.
How AI changes the start-up playbook
AI tools now draft adverts, summarise calls and screen CVs for a small team. They do not replace the relationship with a hiring manager, and they do not tell you what to say to the 50 employers on your list. Use them to protect the hours you spend on conversations. For a wider view of where automation helps and where it should not be used, read our guide to AI automation, and for how employers and agencies get named in answers from AI assistants, see how to get cited by AI assistants.
Mistakes new agencies make
- Starting as a generalist. If you cover everything you are remembered for nothing.
- Underestimating the wait. A permanent search can run for months before it turns into cash, so plan your runway before you leave a job.
- Copying a template of terms. Terms that do not cover rebates, introductions and payment dates cause the disputes that cost the most.
- Treating marketing as a logo. A website and a profile that name your niche do more than a brand identity.
- Measuring activity, not outcomes. Calls made matter only if they become briefs, and briefs matter only if they become placements.
Frequently asked questions
Do I need a licence to start a recruitment agency in the UK?
Not a general one. You must follow the Employment Agencies Act 1973 and the Conduct Regulations 2003. Specific sectors are different: supplying labour in agriculture, food processing and shellfish gathering needs a Gangmasters licence, and supplying staff to NHS settings usually needs framework accreditation.
How much money do I need to start a recruitment agency?
Set-up costs are modest: company registration, insurance, a website and basic software. The larger number is working capital. Permanent agencies may wait several months for a first invoice, and temporary agencies fund wages before the client pays, so plan your runway before you leave employment.
Can I start a recruitment agency from home?
Yes. Many UK agencies begin as a single desk at home. The rules that apply are the same as for any agency, and you still need a registered company, insurance, written terms of business and a compliant way to store candidate data.
How do recruitment agencies make money?
Permanent and retained agencies charge clients a fee, usually a percentage of the candidate’s first-year salary. Temporary and contract agencies take a margin on each hour worked. Under UK rules, you cannot charge work-seekers a fee for finding them work.
Do I need a niche?
You do not need one to start, but it makes everything else easier. A niche gives clients a reason to remember you, gives candidates a reason to reply, and lets you build a network that refers business back to you.
How long until a new agency makes its first placement?
It depends on the model and your network. Founders with an existing client base can place within weeks, while those starting from scratch should expect the first 3 months to go on building conversations. Plan your finances for longer than you hope.
Starting an agency and want the marketing set up properly?
Tell us your niche and where you are in the plan. We will tell you what to build first, and what can wait. If you already run an agency and want to see where your own marketing is leaking, that’s the work we do for agencies, and it starts with a diagnosis.
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Sources: GOV.UK, “Employment agencies and businesses”; FCSA reporting on the Fair Work Agency launch and joint and several liability, April 2026. Checked 20 October 2026. General guidance, not legal advice.