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What is your retirement plan? If you own your own recruiting firm, you don’t have an employer contributing to a pension plan or 401(k), so all you have is Social Security, your own retirement savings, and your business.

But if you are strictly a direct-hire firm, you may find that your business is not all that sellable when it comes time to retire. After all, direct-hire firms do not have a steady stream of revenue to attract buyers.  At best, you may have a client list to sell, but will that be enough to secure a comfortable retirement?

If contract staffing was part of your business model, you would actually have a sellable business.  You would have active contractors working at clients, and those contractors would continually be generating income for your business.  Plus, because you would be in continuous touch with clients, your pipeline would be filling with even more new contract job orders. That steady income makes a recruiting firm much more attractive to potential buyers. Some recruiters have actually added contract staffing not so much because they need the extra income now, but as part of an overall exit strategy.

And in the meantime, they enjoy the following additional benefits of contract staffing:

  • Increased sales
  • Ability to become a sole-source provider to clients
  • Contract-to-direct conversion fees
  • Ability to overcome clients’ hiring freezes and budget constraints

It’s never too early to plan for retirement, so if you do not yet have an exit strategy in place, you may want to consider adding contract staffing to boost your recruiting firm’s value.

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