Here we will walk you through the essential basic steps in establishing your agency and provide supporting documentation to help you on your way.

Part 1

 Assess Viability

Recruitment Agencies can be very profitable businesses provided that you are able to deliver high service levels. The industry is highly competitive as the "barriers to entry" are quite low. The basic question to ask yourself is who your customers are going to be. It is useful to try and obtain prior commitments "in principle" from a few influential customers in your region or niche market.

Your assessment should project how many placements you think you will be able to make per month. This would be based on estimates of how many orders your customers will place with you, what percentage of these you expect to fill, and your capacity to process the positions.

To estimate customer orders, ask each prospective customer how many placements they expect to make each year, or as a rule of thumb divide their number of employees by 20. Then assume what percentage of placements will go through your agency.

The percentage of orders that you can expect to fill will vary based on your location, competition, your candidate quantity and quality, and how exclusive your arrangements with your clients are. Industry figures vary from 25% upwards.

Your capacity to fill orders will often be lower than your potential since the time spent in filling orders is often more than initially anticipated. If one takes into account the time required to process candidate information, stay in contact with candidates, and interview time, each agency employee may only be able to process as little as two placements per month, especially in the initial period when you are busy with sales activity and learning the process.

The main expenditures will be salaries, advertising, and systems.

Download the handy worksheet to draw up your initial plans.

Part 2
 Legal Requirements

  Company Formation

The requirements are the same as for any other type of company. Register as a close corporation or Pty Ltd.


If you wish to use any names which are different to your company name, then you would need to register these as trademarks.


Register for VAT, PAYE, UIF, and Income Tax as with any other company. If you plan to be a labour broker providing temporary and casual staff, SARS must be notified and you will receive a tax directive.

  Department of Labour

You need to register as an employment agency, and the Department will inspect your premises.

  Workplace Compensation

As soon as you employ other people apart from the owners then you need to register.  

Other prescribed requirements

You must comply with all normal labour law as per other types of companies, and display the basic Conditions of Employment on your premises.

  APSO (optional)





















More about starting your recruitment agency