Recruiting Agency

How Profitable Is A Recruiting Agency? (Updated for 2024)

Updated: July 13th, 2024

How Profitable Is A Recruiting Agency? (Updated for 2024)

So you want to start a recruiting agency?

And the first question that came to your mind was, “well, are recruiting agencies actually profitable?

Especially considering:

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a recruiting agency.

Let’s dive in!

Is a recruiting agency profitable?

Yes, a recruiting agency is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $3.24M per year with an estimated gross margin of 30%, you could expect to recover your investment within 10 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your recruiting agency.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your recruiting agency is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a recruiting agency worth it?

If you’re wondering if a recruiting agency is worth it, the answer is a big YES. With recruiting agencies, you have the potential to earn $3.24M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a recruiting agency to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful recruiting agencies case studies.

Examples Of Profitable Recruiting Agencies

Here are a few examples of profitable recruiting agencies, and a few more details about them:

1. DistantJob ($3.48M/year)

Sharon Koifman, president of DistantJob, came up with the idea for her remote worker recruitment agency after noticing that tech companies were outsourcing work to save money, but not getting the same level of communication and quality. She decided to specialize in finding the best remote workers who could follow a client's processes and culture, and teach her clients how to effectively manage remote teams. DistantJob now has $3 million in revenue and targets small to medium-sized tech companies.

Is it profitable? Yes
How much money it makes: $3.48M/year

How I Started A $3M/Year Remote Worker Recruitment Agency

DistantJob is a unique recruitment agency that specializes in finding full-time remote employees, and with $3 million in annual revenue, they offer small to medium-sized tech companies an edge over big competitors who are not willing to hire remotely.

Read by 11,800 founders

2. Devrize ($240K/year)

Jacob Fiore, the founder of a recruiting business called devrize, developed the idea for his business while working in the investment industry. He wanted to start a side hustle that aligned with his desire for endless financial gain, geographical flexibility, and control over his schedule. Recognizing the low barrier to entry in the talent acquisition industry, he started devrize as a contingent recruiter, focusing primarily on software engineering roles for venture capital-backed startups.

Is it profitable? Yes
How much money it makes: $240K/year
How much did it cost to start: $400

We Niched Down In The Recruitment Space And Are Generating $20K/Month In Revenue

A recruiting business founder shares how he found success by zeroing in on a specific niche (software engineering) and offering enticing referral bonuses ($8k for successful hires), resulting in 50% of placements coming from referrals and yielding $302,100 in revenue in Year 1.

Read by 1,865 founders

3. Search Remotely ($120K/year)

Christian Carella, founder of Search Remotely, saw the potential in remote work and the future of the industry. With nearly a decade of entrepreneurship and IT experience, he chose to create a marketplace where remote workers could find job opportunities and up-skill through online courses. Since its launch, Search Remotely has recruited over 100 customers and generates between $35,000-$50,000 in monthly recurring revenue.

Is it profitable? Yes
How much money it makes: $120K/year
How much did it cost to start: $10K

We Built A $420K/Year Remote Worker Platform [From Australia]

Search Remotely is a remote jobs platform that has recruited 100+ customers globally and generates between $35,000 - $50,000 in monthly recurring revenue by connecting remote workers, offering online courses and a platform with thousands of worldwide remote jobs.

Read by 3,897 founders

Learn more about starting a recruiting agency:

Where to start?

-> How much does it cost to start a recruiting agency?
-> Pros and cons of a recruiting agency

Need inspiration?

-> Other recruiting agency success stories
-> Marketing ideas for a recruiting agency
-> Recruiting agency slogans
-> Recruiting agency names
-> Recruiting agency Instagram bios

Other resources

-> Recruiting agency tips
-> Email templates for a recruiting agency

How much can you make with a recruiting agency?

With a recruiting agency, you can make an average of $3.24M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $400. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 10 months.

How much does a recruiting agency make a week?

Based on our data, average weekly revenue for a recruiting agency ranges around $27.3K. As such, you could see monthly revenues of $109K.

To know if your recruiting agency achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your recruiting agency.

How much do recruiting agencies owners make?

The income of a recruiting agency owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established recruiting agency is about $27.3K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a recruiting agency owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Recruiting Agency Profit Margins

Generally speaking, a recruiting agency can expect profit margin of around 30%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a recruiting agency, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, recruiting agency owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, recruiting agency owners can ensure long-term sustainability and profitability for their business.

Recruiting agency owner salary

The salary of a recruiting agency owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established recruiting agency, in a prime position, might see an average weekly salary around the ballpark of $8.19K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, a recruiting agency is quite promising if you plan on starting such. With a market size of $, you can enjoy a potential revenue of around $3.24M per year with a gross margin of 30%.

Considering this information, you can enjoy a return of investment within 10 months, especially if you have a monthly profit of $32.8K. Overall, the success of your recruiting agency also depends on your effort and knowledge about it. If you persevere with these things, you can ensure that this recruiting agency is profitable.

Make sure you have a proper recruiting agency plan and know how to get clients for your recruiting agency.