If you’re reading this, the chances are you’re an experienced construction recruitment consultant – and if so, this blog is aimed at you. We’ll walk you through exactly what you need to think about to start your own construction recruitment agency.
You may focus on the blue-collar market, the white-collar market, or a combination of the two. You may be part of a large agency and feel that now is the right time to branch out on your own. Or perhaps you’re in a smaller agency and, having had hands-on exposure to the inner workings, you’re ready to go solo.
Whatever your background or journey – this is where we talk about how to start your own construction recruitment agency. Isotope has supported a great number of recruiters who’ve made this leap, and we’ve learned a few things about what works and what doesn’t.
Our aim is to talk you through what you specifically need to think about – not through buzzwords or vague metaphors, but with honest, practical advice from a team who’ve been there and done it.
How am I going to pay my temps?
This is one of the most frequently asked questions from recruiters looking to start a construction agency. Most know there must be a solution that doesn’t involve draining personal savings to fund temps while waiting on client payments – but what is it?
The answer: your agency needs to engage with a factoring and payroll provider. Isotope works with around 95% of lenders in the market, allowing us to recommend the best and most suitable solution for your agency’s needs.
Our role is to match you with the right provider – not the one that suits us. We offer a genuine choice of options to ensure the fit is right for you.
One key hurdle in construction is the CIS (Construction Industry Scheme). This has major implications for payroll and funding, and any aspiring construction recruiter needs to understand it. Isotope will ensure the models we suggest can address CIS-related challenges.
CIS is specific to construction and affects everything from funding models to margins. It’s essential to understand how it works.
Initially, we recommend agencies operate using a ‘principal model’ – where a principal with gross status invoices the client and pays the worker, and your agency receives the margin.
As your business grows, we recommend registering for CIS as a subcontractor to work towards gross status. To achieve this, you’ll need:
Once gross status is achieved, the agency can register as a contractor – meaning you’ll verify workers, make deductions, and submit returns to HMRC. Isotope will support you with this, just like we do with VAT returns and PAYE submissions.
Compliance is a big issue in construction. Nearly half of construction workers are self-employed, and one-fifth of all UK self-employed work in construction. That makes IR35 and other compliance considerations critical.
We’ve supported agencies across blue- and white-collar markets and seen how workers often prefer to be paid via LTD companies due to tax benefits. On the white-collar side, technical project-based roles are common – making IR35 especially relevant.
Recent research showed a third of large construction firms are unaware of IR35 changes. Educating clients and candidates is essential. We help by creating branded factsheets explaining how payment and compliance are changing – saving our clients time and confusion.
Clients must assess each role and determine if it falls inside or outside IR35 – and you’ll need to guide them. But you’re not alone: Isotope is already preparing the tools and insights you’ll need to stay ahead of the curve.
Does your recruitment skill vanish when you go solo? Of course not. So why reduce your fees just because you’re a “startup”?
There might be times when it makes sense to offer a discount – for volume, loyalty, or strategy – but don’t let being new force you to undercut your value. In construction, this is especially important due to CIS deductions and funding costs.
Competing on price alone isn’t sustainable. Large agencies have economies of scale. You have your niche, your knowledge, and your network. Use them. Be honest and transparent with clients about your pricing – it builds trust and ensures you’re not left with razor-thin margins.
We help our clients understand their margins with calculators and guidance. For example, a £1.50 margin may sound okay – but after deductions, it may leave little to no profit. Whether it’s a fixed markup or percentage, the structure matters.
As a recruiter, you’ve thought about margins before. But as a business owner, it’s a whole new ball game. Let’s talk about what margin works best for your goals. Think of us as your personal Bruce Forsyth – just without the dance moves!
Health and Safety is critical in every sector, but especially in construction. Prospective clients will expect you to understand it inside out. (Content continues…)
