Recruitment Opportunities

Shortages of workers and particular skills can create opportunities for recruitment businesses, employers, people considering entering recruitment and individuals deciding where their own skills or career could be in demand.

When Demand Hunt identifies unusually strong demand for particular workers or skills, this page helps you explore the different ways that demand might create an opportunity.

A shortage does not automatically mean there is a profitable recruitment opportunity or that retraining for a particular occupation is a good decision. The important questions are why the shortage exists, how persistent it is and whether there is a practical way to respond to it.

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Ways To Respond To Recruitment Demand

Worker and skills shortages can create several different types of opportunity.

• Recruit permanent employees for businesses struggling to fill vacancies.
• Supply temporary or contract workers where employers need additional capacity or cannot recruit permanently.
• Specialise in a particular sector experiencing persistent shortages or recruitment difficulties.
• Develop an existing recruitment business by expanding into another occupation, sector or geographical area.
• Start a recruitment business focused on an identifiable area of unmet demand.
• Train or retrain for skills that employers are struggling to find.
• Use evidence of demand when choosing a career or specialism, particularly where shortages appear persistent rather than temporary.

These are very different opportunities, so start by deciding whether you want to supply recruitment services or become one of the workers whose skills are in demand.

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Is There Really A Recruitment Opportunity?

A large number of vacancies does not necessarily mean there is an easy recruitment opportunity. Try to understand why employers are struggling to recruit. Consider:

• How long vacancies remain unfilled
• Whether the shortage is local, regional or national
• Salary and benefit levels
• Qualifications or experience required
• Whether employers are competing for a genuinely limited pool of workers
• Whether working conditions are contributing to recruitment problems
• Whether demand is seasonal or persistent
• Whether technological or regulatory changes could affect future demand

The underlying cause matters. A genuine shortage of qualified people may present a very different opportunity from an occupation with many vacancies simply because staff turnover is unusually high.

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Starting A Recruitment Business

Most UK recruitment agencies do not need a general licence simply to operate, but recruitment is regulated, and there are important legal requirements.

There is also an important distinction between an employment agency, which introduces people to employers for employment, and an employment business, which supplies temporary workers to hirers.

Rules cover areas including information that must be obtained from hirers and work-seekers, suitability for positions, fees, record keeping and how temporary workers are treated.

Before starting a recruitment agency or employment business, read the current UK Government guidance.

Employment agencies and businesses – GOV.UK

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Supplying Temporary Workers

Supplying temporary workers can be quite different from introducing candidates for permanent employment.

The employment business may be responsible for paying temporary workers and dealing with matters such as tax, National Insurance and employment rights.

Agency workers also have specific rights, including rights arising under the Agency Workers Regulations.

GOV.UK provides guidance explaining agency workers’ rights and the responsibilities of agencies and hirers.

Agency workers and their rights – GOV.UK

Make sure you understand these obligations before basing a business model on supplying temporary labour.

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Check Whether Your Recruitment Sector Requires A Licence

Some areas of labour supply have additional requirements.

Businesses supplying workers into regulated sectors including agriculture, horticulture, shellfish gathering and certain food processing and packaging activities may need a licence from the Fair Work Agency.

Do not assume that general recruitment rules are sufficient if you intend to operate in a specialist or regulated sector.

Fair Work Agency – GOV.UK

Other sectors can also have their own registration, safeguarding or regulatory requirements, so check the rules applying to the particular industry before trading.

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Choose A Recruitment Niche Carefully

Trying to recruit every type of worker for every type of employer can put a new recruitment business in direct competition with large established agencies.

Evidence of a persistent shortage may point towards a more focused opportunity.

A niche might be based around:

• A particular occupation or skill
• An industry or profession
• A geographical area
• Permanent recruitment
• Temporary or contract workers
• A combination of specialist skill and location

The attraction of specialising is that you can build knowledge of the employers, candidates, qualifications, pay rates and recruitment problems within a particular market.

However, make sure the niche is large enough to support a viable business.

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Understand How Recruitment Agencies Get Paid

Recruitment business models vary considerably.

Permanent recruitment agencies commonly charge an employer when a candidate is successfully placed, often with the fee related to the employee’s salary.

Temporary recruitment businesses typically operate differently. The hirer pays the employment business for the worker’s time and the employment business pays the worker, with the difference contributing towards employment costs, overheads and profit.

Before entering a market, establish realistic fee levels and calculate the costs involved in making placements or supplying workers.

A market can have severe recruitment shortages while still being commercially unattractive if employers are unwilling to pay sufficient recruitment fees.

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Cash Flow Matters In Temporary Recruitment

Temporary recruitment businesses can face a particular cash-flow challenge.

Workers may need to be paid weekly or monthly while business customers pay invoices considerably later. A growing agency can therefore need increasing amounts of working capital even when it is profitable.

If you are considering supplying temporary or contract workers, model the timing of wages, PAYE, National Insurance and customer receipts rather than looking only at the margin between the worker’s pay and the amount charged to the client.

See our Fund Opportunities guide if funding is needed to pursue an opportunity.

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Considering A Career Change?

Worker shortages are not only relevant to recruitment businesses.

Persistent demand for particular skills can provide useful information for people deciding what to learn, which qualifications to pursue or where their existing experience might be valuable.

Before committing to training or a career change, investigate:

• Qualifications and licences required
• How long training takes
• The cost of gaining the necessary qualifications
• Starting and experienced salary levels
• Working hours and conditions
• Where the vacancies are located
• Whether demand appears likely to continue

A shortage today is useful evidence, but a career decision should take account of the likely longer-term market as well.

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Research Careers And Qualifications

The National Careers Service provides information about hundreds of occupations, including typical salaries, working hours, entry routes, required skills and career progression.

It can be particularly useful when a Demand Hunt signal identifies an occupation you have not previously considered.

Explore careers – National Careers Service

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Look For Training Opportunities

You may not always need to fund lengthy retraining yourself.

Government-supported training routes include apprenticeships and Skills Bootcamps. Depending on the occupation and your circumstances, these can provide routes into skills for which employers are recruiting.

Find a Skills Bootcamp – GOV.UK

You can also search current apprenticeship opportunities.

Find an apprenticeship – GOV.UK

Availability and eligibility vary, so check the current details before making a decision.

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Check The Wider Employment Evidence

For a larger or longer-term opportunity, it is worth looking beyond individual job advertisements.

The Office for National Statistics publishes UK labour-market information covering employment, unemployment, vacancies, earnings and other indicators.

UK labour market data – Office for National Statistics

Official statistics will not necessarily identify a small emerging shortage as quickly as real-world demand signals, but they can provide useful context when assessing whether a wider labour-market trend supports what you are seeing.

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Need Finance To Act?

Starting or expanding a recruitment business can require working capital, particularly where temporary workers have to be paid before customers settle their invoices.

If you have identified a commercial opportunity and need funding to start or grow a business, see Fund Opportunities.

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Looking For Current Recruitment Demand?

Demand Hunt monitors evidence of unusual demand for workers, particular skills and other emerging UK opportunities.

See Demand Hunt Live for the current signals we are tracking.

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Is It Really A Service Opportunity?

If customers are struggling to find a business to provide a particular service, rather than employers struggling to recruit workers, see our Sell Services guide instead.