Skip to content

How to Set Up a Successful Temporary Recruitment Agency in the UK

Setting up a temporary recruitment agency in the UK can be a lucrative business venture. With industries ranging from construction and healthcare to IT and education frequently requiring temporary staff, there is a consistent demand for efficient and effective staffing solutions.

Understanding the Recruitment Industry

The recruitment industry in the UK is extremely competitive, with a significant portion of the market focused on temporary staffing. Temporary workers, ‘locums’, or ‘temps’, are often hired to cover short-term needs, providing flexibility for companies dealing with seasonal peaks, employee absences, or special projects. Understanding the dynamics of this industry is crucial for anyone looking to establish a temporary recruitment agency. It may seem very simple to set up an agency, with a view that ‘agencies just send out CVs and get paid lots of money for doing nothing’, but you don’t see what is going on behind the scenes to attract the candidates and clients into the agency in the first place. It can take months to get your first placement..

This article will guide you through the process of setting up a successful temporary recruitment agency, covering key steps such as market research, legal considerations, operational strategies, and marketing.

Step 1: Conduct Market Research

Objective: Identify your niche and understand your competition.

  • Industry Needs: Research which sectors have the highest demand for temporary workers. Sectors like healthcare, education, IT, and construction are traditionally high-demand areas.
  • Competition Analysis: Evaluate what services competing agencies offer, their pricing structures, and their market positioning. Understanding what your competitors do well can help you identify gaps in the market.
  • Target Market: Define whether you’ll service small local businesses, large corporations, or specific industries. Knowing your target market will shape your business strategies.

Step 2: Legal Requirements and Registration

Objective: Ensure your agency complies with UK employment laws and industry regulations.

  • Company Formation: Register your business with Companies House. Most recruitment agencies operate as limited companies.This is to limit the risk if it all goes wrong, legally or financially.
  • Recruitment Legislation: Familiarize yourself with key regulations, including the Employment Agencies Act, the Conduct of Employment Agencies and Employment Businesses Regulations, and GDPR for data protection.
  • Insurance: Obtain the necessary insurance policies, including professional indemnity insurance and public liability insurance. The insurance for running a temp agency can be punitive.

Step 3: Business Planning and Finance

Objective: Develop a comprehensive business plan and secure funding.

  • Business Plan: Outline your business goals, strategies, and financial forecasts. This document will be crucial if you need to secure loans or investments.
  • Funding Options: Consider how you will finance your startup. Options include business loans, angel investors, or personal savings. Alternatively plan to spend very little and set up in your back bedroom!
  • Budget Management: Plan for initial expenses such as office space, staffing, marketing, and technology.

Step 4: Establish Operational Infrastructure

Objective: Set up the internal systems and processes to run your business efficiently.

  • Office Location: Decide whether you need a physical office space or if you can start from a home office. Consider accessibility for clients and candidates. Or operate fully online and don’t spend a penny.
  • Technology: Invest in a reliable recruitment software system (Applicant Tracking System or ATS) that supports candidate sourcing, tracking, and management. This is perhaps something to do once you have a bit of income. In the meantime, use Microsoft Excel.
  • Staffing: Initially, you may need a small team to handle recruitment, compliance, and business development. There again, if your mum has a few hours a week, she can probably help out with a bit of database administration for very little money.

Step 5: Sourcing Candidates

Objective: Build a pool of qualified candidates to fill temporary positions quickly.

  • Recruitment Methods: Utilise job boards, social media, and other online platforms to attract candidates.
  • Screening Processes: Develop a thorough screening process that includes interviews, skill assessments, and reference checks.
  • Database Management: Maintain an organised database of candidates to quickly match them with potential employers. This can take years.

Step 6: Client Acquisition

Objective: Secure contracts or contacts with companies needing temporary staff and build lasting relationships.

  • Marketing Strategies: Use digital marketing, networking events, and cold calling to reach potential clients. Cold calling doesn’t work very well in certain sectors and will just annoy your clients..
  • Service Offerings: Clearly communicate what sets your agency apart, such as specializing in a niche market or offering faster placement times.
  • Client Meetings: Regularly check in with clients to assess their satisfaction and adjust your services as needed.

Step 7: Marketing and Branding

Objective: Establish a strong brand presence both online and offline.

  • Branding: Develop a strong brand identity, including a professional logo and a user-friendly website.
  • SEO and Online Marketing: Optimise your website for search engines to attract both clients and candidates. Use social media to engage with potential applicants and clients.
  • Networking: Attend industry conferences, seminars, and local business events to build relationships and promote your agency.


Setting up a successful temporary recruitment agency in the UK requires hours of careful planning, compliance with legal standards, effective operational strategies, and robust marketing efforts. By focusing on a specific niche and continuously adapting to market needs, you may thrive. There again, you may join the overwhelming percentage of new agencies that bomb in their first or second year. The key to success in recruitment is building strong relationships with both clients and candidates, ensuring reliability, and maintaining a flexible approach to the evolving job market.

Here are five examples of well-regarded temporary recruitment agencies in the UK – if you start an agency now, maybe you will join this list of the top performers in a few years’ time!

  1. Adecco UK
    • Website:
    • Description: Adecco is one of the largest recruitment agencies in the world, providing temporary staffing solutions across a wide range of sectors, including office, industrial, and technical sectors. They cater to both small and large companies, offering flexible workforce solutions.
  2. Hays
    • Website:
    • Description: Hays is a global leader in specialist recruitment, proficient in providing temp services for various professional sectors such as IT, finance, construction, and healthcare. They offer both short and long-term temporary staffing, focusing on matching the right talent with the right opportunities.
  3. Randstad
    • Website:
    • Description: With a strong presence in the UK, Randstad specializes in temporary and permanent recruitment. They provide specialized staffing services across education, IT, healthcare, and other industries, emphasizing a personalized approach to meet both client and candidate needs.
  4. Reed
    • Website:
    • Description: Reed is one of the UK’s leading recruitment agencies, known for their extensive database of candidates and a broad spectrum of job sectors including finance, education, and technology. They offer a comprehensive range of temporary staffing services, helping companies manage workforce flexibility.
  5. Manpower UK
    • Website:
    • Description: Manpower is a world leader in workforce solutions, known for their expert handling of temporary recruitment across diverse industries like manufacturing, administrative, and call center roles. They are known for their reliable worker placement and management services.