The Essential Checklist for U.S. Expansion for Recruitment Agencies
So, you’re thinking of expanding your agency to the U.S. staffing market, we are not surprised! The opportunity potential is huge, for example the U.S. staffing market surpassed $150bn in revenue in 2019, of this, $130bn was in temporary staffing. The U.S. is home to the largest staffing market in the world but still remains unsaturated in comparison to the UK.
Did you know that there is the same number of agencies in the U.S. and the UK, yet the U.S. market is far larger? To put this into perspective, California’s GDP alone is more than the whole of the UK’s GDP. So, if you are an ambitious recruitment agency willing to seize this huge opportunity to expand your business outside of the saturated UK recruitment market, the U.S. is for you! We have put together this checklist to help get your U.S. expansion plans rolling.
What do you need to get in place before you get started?
1. Have a strategy
Expanding to the US will take significant time and resources so you must have a strategy in place. Think about what your goal is and how much you are willing to invest. You would be surprised at how many companies try to expand to the U.S. with no real plan in place. We also advise that you speak to your network and businesses within your industry who have previously expanded to the U.S. to learn from those who have been there and done it. Check out our interviews with Andy Hallett on his experience launching operations in the U.S. and key lessons learnt.
2. Location
Pick a location. The US market is huge and each state operates separately, almost like its own country. If you are going to operate in America from outside of the U.S. initially, it’s essential to pick a target market that best suits your business so you can focus your efforts on running your business effectively.
When picking a location, it’s important to consider access to talent, lifestyle, costs, your budget, marketing opportunities and key industries within your chosen state. Do your research to ensure your product/service is in demand in that state and how much living and business costs such as taxes and renting office space will cost you in your desired state. Check out some great business incentives offered by different states and cities here.
3. Niche
Whichever way you pronounce it, picking your ‘niche’ is an important question to ask yourself when considering expanding to the U.S. The U.S. market is huge and without knowing your target it can be overwhelming. Research your market, know the market size, its associated value, the opportunities for growth, and your competition. In order to penetrate the market and build a reputation, you must know your niche, this could be by vertical or even by location.
4. Learn the terminology
Learn the terms and acronyms before speaking with clients. You might have the best team but if they can’t speak and relate to U.S. clients then they won’t make much progress. There are some key differences. For example, the term ‘runner’ isn’t used in the U.S., and day rates are very rare. American businesses tend to like working with other American businesses, so avoid using non-U.S. terminology with your prospective clients where possible. Also, knowing how to speak with your candidates is really valuable. They’ll want to know about a range of new items including healthcare options as well as compensation.
5. Update your process and documents
Your contracts are not transferable, you’ll need new contracts when expanding to the U.S. and T&Cs, so get help from an expert. You’ll also want to know the correct way to set up your business entity, get a U.S. bank account, and obtain the correct business insurances. America is notoriously litigious, so it pays to get it right the first time.
Finally, understand your tax implications, this is extremely complex but also very important when expanding your business to the U.S. If you do not manage you business tax correctly when expanding to the U.S., this can result in huge implications for you and your business, so get help from an expert.
So, if you are considering expanding your recruitment agency into the U.S. we highly recommend that you check off the points above on your list before you get started. If you need any help with expanding your business to the U.S. or have any questions about what the process involves, get in touch and we will happily answer your queries.
Disclaimer: All information written here is for general informational purposes only and is not intended to be a substitute for professional and/or legal services.