Benefits of Expanding a Recruitment Agency in Multiple Countries

Recruitment agencies are among the first places leading enterprises to turn to when seeking to fill positions at their offices. Such agencies are highly valued and many industries would likely collapse if it weren’t for the recruitment assistance they provide. 

If you have been operating a recruitment agency for many years, you might be interested in growing your business in a new location. You can try setting up more offices in other parts of the country. However, you might be able to enjoy far more benefits by expanding your business to another country.

In this guide, we will go over the many benefits of expanding a recruitment agency to other countries.

  1. Getting New Clients

Running a recruitment agency in your home country can be especially challenging if there are numerous other agencies offering similar services. You can advertise your services on multiple platforms such as social media, websites, and on television. However, the presence of competitors will still limit your chances of getting new clients, and this can slow down your business’s growth.

You can avoid this issue by expanding your agency to another country where there is less competition. For example, you might be able to find dozens of businesses seeking a recruitment agency in a small European city. If you successfully manage to help these businesses, they may recommend your recruitment agency to other business owners. This will further boost the demand for your services and allow your business to grow.

  1. Access to a Fresh Labor Pool

Businesses trust recruitment agencies to provide them with qualified staff to fill job vacancies. However, this can be difficult to do if the labour pool in your current country lacks qualified workers with the skillset the business is seeking.

For example, one of your clients may urgently need to hire someone with specialized knowledge of artificial intelligence (AI). You can spend many hours scouring your database, but you might be unable to find anyone who possesses this specialized skill set.

This problem is less likely to occur in other countries where there are colleges and universities that offer programs related to AI. Such educational institutions produce many graduates with the skills your clients are seeking. Therefore, you will benefit from having access to a more valuable labour pool if you choose to expand your recruitment agency to another country.

  1. Tax Benefits

Running a recruitment agency can be a lucrative business, especially if you have a large pool of clients. However, such agencies are still liable to pay corporate taxes. Such taxes cut into your profits, leaving you with less at the end of the year.

If your recruitment agency is located in a country with a high corporate tax rate, your profit margins are likely to be slim. For this reason, you should consider expanding your business to a country with a more favourable corporate tax rate.

For example, Bulgaria has a corporate income tax rate of only 10%. This means you can benefit from lower taxes by expanding your business from a country such as America, which has a 21% corporate tax rate, to Bulgaria.

  1. Diversification

Many recruitment agencies expand to other countries for diversification purposes. This is a common tactic with businesses that do not want to be wholly dependent on the conditions of their current country. After all, it can be difficult to predict how market conditions will be in the future. It’s not uncommon for recruitment agencies to go out of business when the country’s economy is doing poorly. Therefore, having a set of operations going in another country can help keep the business going when times are tough in your home country.

You could also consider sending some of the staff at your local business to help run the one abroad temporarily. This can speed up the foreign business’s growth and help it achieve new milestones.

  1. Improving Your Agency’s Reputation

One of the most overlooked benefits of expanding a recruitment agency abroad is getting opportunities to improve your business’s overall reputation. Every business strives to build up a good reputation because it makes it easier to get more clients. However, your recruitment agency may have made some missteps in the past that negatively impacted its reputation. 

You can certainly focus on attempting to improve your reputation by going above and beyond for clients in the present. However, few people are willing to give a recruitment agency a second chance after a poor first experience. In this situation, the best way to improve your business’s reputation is to expand it to another country and do a good job there.

If you manage to build up a great reputation in another country, you can count on it having a positive impact on your agency back in your home country. You can then start promoting your agency as a multinational company to further boost its popularity.

  1. Lower Operating Expenses

Another great reason to consider expanding your recruitment agency abroad is to benefit from lower operating expenses. This advantage can be quite significant if your recruitment agency is currently operating in a country with a high minimum wage and rent rates.

There are plenty of European countries such as Hungary, Bulgaria and Latvia with low minimum wage rates and thriving economies. Consider expanding your business to one of these countries if you’re concerned about being able to pay your staff.

Similarly, European countries such as Denmark, Portugal, and Slovakia are known to have low office rental prices. This means you can reduce your operating expenses significantly by setting up an office in one of these countries.

Deciding Which Countries to Expand Your Recruitment Agency To

Now that we have seen the various benefits of expanding your recruitment agency to another country, you might be wondering which country to pick. Assuming you have chosen to limit your options to just Europe, you will still have dozens of countries to choose from including China, Germany, Hong Kong, Malaysia, Poland, Singapore, the Netherlands and the United States.

Some considerations to keep in mind when choosing the right country for your recruitment agency are mentioned below.

  1. Language

European countries are among the most developed in the world. However, there are very few where people speak English as a first language. You might be able to move to a European country and get by as a foreign worker with a limited understanding of the local language. However, setting up and operating a business in a country where you don’t speak the local language can be much trickier.

For this reason, it is best to choose a country where business is conducted in English. This includes Ireland, the United Kingdom, Germany, and the Netherlands.

  1. Tax Rates

European countries vary greatly when it comes to corporate tax rates. Germany has a corporate tax rate of 30% while Bulgaria has a corporate tax rate of only 10%. Knowing this, you might be tempted to expand your business to Bulgaria. However, it is important to note that less than a quarter of this European country’s population speaks English. 

For this reason, you should consider multiple factors in addition to the tax rate when you set out to pick a European country for your recruitment agency.

  1. Ease of Business Registration

You will need to ensure your recruitment agency acquires the right licenses and permits for the country you expand to. However, this can be more difficult to do in certain European countries.

For example, France forces business owners to jump through many hurdles to get a business license. Denmark on the other hand has streamlined the business licensing process to encourage people to start new businesses in the country.

  1. Competitors

If you’re planning to expand your business to another country to get away from the competition back home, you should ensure the country you intend to set up operations in isn’t already saturated with recruitment agencies. However, you should note that these agencies could also be concentrated in certain parts of the country.

So one major city in the country may already have half a dozen recruitment agencies, while another major city could have only one or two. Therefore, you should research what the competition will be like for various cities in the country you are considering.

  1. Work Visa Availability

If you intend to transfer staff members from your recruitment agency’s local office to the new office in another country, you will likely need to obtain work visas for them. Some countries readily give out work visas to foreign nationals, while others make the process challenging to protect local workers. 

How OpenaEuropeanCompany Can Help

As you can see, there are many benefits associated with expanding a recruitment agency to another country. If you plan to grow your recruitment agency by opening up an office in a European country, consider asking OpenAEuropeanCompany for guidance. We have helped many business owners expand their operations to Europe and can guide you through the process easily.

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