How to Start a Recruiting Business and Earn $10-20k Per Hire

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jon chintanaroad

Starting a recruiting business can be a lucrative side hustle, especially if you love playing matchmaker.

Jon Chintanaroad knows the recruiting business inside and out, having worked for staffing agencies before starting and selling his own recruiting business.

Today, he helps hundreds of other people start and expand their own profitable recruiting businesses at Recruiting Accelerator.

Tune in to episode 568 of The Side Hustle Show to learn:

  • Jon’s best practices for acquiring new clients and finding candidates
  • what he calls “stealth mode”
  • how to set yourself up for success

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Why Start a Recruiting Business?

Jon started his own recruiting business after he was laid off from his staffing company.

When he called his clients to break the news, they suggested that he start his own recruiting business so they could continue to work with him.

How Much Do Recruiters Make?

Recruiters typically charge 20% of the new hire’s salary, Jon told me. That means placing a $100,000 hire could earn $20,000 … but that fee got split between Jon, his boss, the salesperson who got the client, and the agency.

Jon felt he was working very hard for only a small slice of the pie. He realized the only way he could make the whole pie was to do it on his own.

With a couple months’ worth of savings stowed away, Jon decided to take the leap.

how to start a recruiting business

Getting Started

Jon honed in on client acquisition — the area most recruiters struggle with the most.

Clients are the companies that pay recruiters. Most recruiters are good at finding candidates but have a harder time finding clients who need candidates.

Jon stuck to small to medium-sized businesses. He called this the sweet spot:

  • If the company is too big, they probably already have an internal army of recruiters
  • If they’re too small, they may not be able to afford a recruiter

At first, Jon did a lot of manual outreach. He’d comb lists like the Inc. 5000, pick companies in industries he was familiar with, and reach out to their hiring managers on LinkedIn.

Although that’s what most recruiters do to get started, it was very time-intensive. He could easily take half a day reaching out to just 10 companies.

So he rebuilt his strategy from the ground up, using automation tools to prospect for clients both through LinkedIn outreach and cold email.

Personalizing the Client Outreach Process

While automation tools streamlined Jon’s process, he still made sure to personalize his outreach messages.

Build Mini Campaigns

Instead of running generic outreach campaigns, Jon recommended running “mini campaigns” with specific messages.

For example, he’d create a list of VP-level executives with a keyword like “cloud security”. Then, he’d mention in his initial message that he specializes in placing cloud engineers with a focus on cybersecurity.

“Because you’re only targeting those specific hiring managers with those keywords, it tends to build resonance,” Jon said. Plus, this strategy typically has a high response rate.

Use Video Messages

Jon also sends out personalized 30-second video messages.

He uses a tool like Vidyard or Bomb Bomb to record a template video message and add a pre-recorded name to the message.

To further personalize the message, he’ll include visuals like screenshots of the prospect’s LinkedIn profile and their company’s careers page.

Jon used to create the videos manually but has since automated the process with AI.

Best Practices for Getting Recruiting Clients

Jon shared some of his best practices for acquiring new recruiting clients.

1. Pick a Niche

When you pick a niche, prospective clients will see you as a specialist and not just another generic recruiter.

It’s hard to get traction if you recruit for virtually any type of role, Jon said.

2. Reach Out to People with Hiring Authority

C-suite executives usually aren’t hands-on enough to be involved in the hiring process, but hiring managers don’t always have the authority to onboard vendors or agencies.

Jon said you’ll want to reach out to three people in any company:

  1. The Vice President of the role
  2. The Director of that department
  3. The highest-ranking human resources (HR) person, typically the HR Manager or Talent Acquisition Manager.

3. Do Both Cold Email and LinkedIn Outreach

Everyone’s on LinkedIn, but not everyone checks their LinkedIn inbox.

On the other hand, people check their emails every day, but emails can get flagged as spam by filters.

“When you do both LinkedIn and email … then you tend to catch [clients] over time,” Jon explained.

4. Take a Candidate-Focused Approach

If a cold email or message gets a bite, Jon provides the prospective client with at least two candidate profiles he thinks might fit the client’s needs.

The candidates don’t necessarily have to be real in that they’re actively looking for a job or that Jon had already reached out to them beforehand. Instead, he presents them as profiles he’s identified based on the job description provided by the prospective client.

If they decide to schedule a call for further discussion, Jon will then find live candidates he’s spoken to and tell the prospective client that he’s in early conversation with the candidates.

This type of candidate-focused approach is a great way to keep the prospective client from grilling you about your credentials as a recruiter, which is especially helpful if you’re just starting your recruiting business.

5. Go “Stealth Mode”

If you have a day job in recruiting but do recruiting yourself as a side hustle, you’ll want to avoid a conflict of interest.

You can do that by following Jon’s “stealth mode” best practices:

  • Keep your business out of your LinkedIn profile.
  • Keep your name and picture out of your business website.
  • Keep your outreach messages relatively vague in case the prospective client knows your boss or coworkers.

6. Don’t Overthink Your Web Presence

Jon prefers to not include his website and LinkedIn profile links in his outreach messages to avoid sounding like a marketer.

He also doesn’t do a lot of content marketing. “In recruiting, you only need 3-5 clients to be absolutely busy,” he added.

How to Find Recruiting Candidates

Jon typically uses LinkedIn to find candidates. Once he’s exhausted that, he’ll use Google almost like a hidden resume database.

By using Boolean modifiers, he can refine his search and pull up things like PowerPoint presentations from keynote speakers at cloud security conferences or conference attendance spreadsheets.

But contrary to popular belief, the hard part about recruiting isn’t finding candidates — it’s engaging with them.

That’s because as much as 70% of candidates are “passive job-seekers” — they’re not necessarily looking for a new job or actively applying, but they’re open to it if the right opportunity comes along.

The key to engaging candidates is having the right message, and Jon likes to start with what he called a “softening statement.” That could be something like, “I’m not sure this would even interest you…” or “Not sure if the timing is right …”

Outreach messages from salespeople and recruiters typically sound very optimistic and upbeat. Jon tries to be the opposite of that by taking on a more skeptical and curious approach to gauge whether the candidate has career pain points.

Common pain points might include:

  • A long commute
  • Lack of career advancement
  • Concerns about the future of the company

These pain points give Jon an in to introduce the job opportunity and eventually connect the candidate with the client.

As part of his search process, though, Jon always asks candidates whether they’ve applied to his client’s company, been presented there by another recruiter, or submitted their resume there directly.

If they answer “yes” to any of those questions, he can’t work with them. “We only get paid as recruiters to present people who are brand new,” Jon told me.

The Recruiting Business Sales Cycle

To fill an open position for a client, Jon said the math often breaks down like this:

  • Reach out to 100 people
  • Talk to 50 of them
  • Present the 3 best to the client
  • Have 1 get hired

Once he finds those 3 candidates who are qualified for the position, excited about it, and ready to interview, Jon will do a candidate presentation.

That involves writing an introductory email to the client’s hiring manager that lists the:

  • Candidate’s qualifications
  • Pain points they have at their current position
  • Times they have available to interview

If the client says “yes” to a candidate, they choose a day and time for the interview.

If they say “no,” Jon asks them for feedback so he can refine his search and get candidates who might fit the client’s needs better. Jon gets paid after a candidate gets hired.

To make sure there are no hiccups, he coaches candidates on how to give their two weeks’ notice and decline counter offers should they receive one.

On the client’s side, Jon provides a one-page contract that states he’ll get paid a percentage of the candidate’s salary and that he guarantees the candidate will stay for 90 days. If things don’t work out within 90 days, he’ll either replace the candidate or give the client a refund.

What’s Next?

Having built a team to help run, Jon is focused on improving the training.

Currently, he’s working on the 3.0 version of his recruiting training program, which involves new AI tools and tips for how to hire and train a virtual team of recruiters.

Jon’s #1 Tip for Side Hustle Nation

Spend money on information.

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Nick Loper

About the Author

Nick Loper is a side hustle expert who loves helping people earn more money and start businesses they care about. He hosts the award-winning Side Hustle Show, where he's interviewed over 500 successful entrepreneurs, and is the bestselling author of Buy Buttons, The Side Hustle, and $1,000 100 Ways.

His work has been featured in The New York Times, Entrepreneur, Forbes, TIME, Newsweek, Business Insider, MSN, Yahoo Finance, The Los Angeles Times, The San Francisco Chronicle, The Financial Times, Bankrate, Hubspot, Ahrefs, Shopify, Investopedia, VICE, Vox, Mashable, ChooseFI, Bigger Pockets, The Penny Hoarder, GoBankingRates, and more.

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