Entrepreneurship Finance Recruitment

How much profit does a single recruitment consultant make for a recruitment agency?

Recruitment is an industry where an individual consultant can generate a very high margin for a company, but how much of that goes into an agency’s back pocket?

In this article, we’ll give you an insight into the P&L of a single consultant, what you generate for the company yourself at different billing levels and in different models.

Let’s take a senior recruitment consultant in a boutique with a good commission scheme who is relatively settled 3 quarters into their new role, earning a base of SGD $5,000 per month, performing at the higher end billing 5x their base salary.

This is someone who is most likely above their sales target, as a sales target can typically be set anywhere between 3.5 – 5x base salary.

The commission scheme in the example is based on a threshold of 2.5x quarterly base salary at 30%. The calculation: threshold = 2.5x 15k (base salary) = threshold of 37.5k. Billings of 75k – threshold of 37.5k = 37.5k which is commissionable. 37.5k * 30% = 11.25k.

Quarter 3

Ordinary CPF$850$850$850
Additional Wage CPF$0$0$1,913
Google / Microsoft$17$17$17
Medical insurance$500$500$500
Visa fees$500$500$500
Misc costs$1,000$1,000$1,000
Total costs$9,662$9,662$22,825
Monthly gross profit$15,338$15,338$2,176
Quarterly gross profit$32,852

Very profitable, almost too good to be true hey? That’s because it is! Let’s drill down into this.

The P&L above gives you the numbers for a senior consultant performing well, most likely on the verge of promotion. However, you must consider how long it took for the consultant to become profitable.

Let’s go back 2 quarters to the consultant’s first quarter and look at a run up of 2 months to get their first deal signed.

Quarter 1

Ordinary CPF$850$850$850
Additional Wage CPF$0$0$0
Google / Microsoft$17$17$17
Medical insurance$500$500$500
Visa fees$500$500$500
Misc costs$1,000$1,000$1,000
Total costs$11,062$9,662$9,662
Monthly gross profit-$11,062-$9,662-$9,662
Quarterly gross profit-$30,386

Where is the revenue? It’s not on the P&L because the candidate only signed the deal in month 2, has a 1 month notice and requires an EP, so the invoice can’t be raised until month 4.

That means the same consultant has run at a loss of -$30,386 for the first quarter of their employment.

Let’s look at the second quarter for the consultant.

Quarter 2

Ordinary CPF$850$850$850
Additional Wage CPF$0$0$0
Google / Microsoft$17$17$17
Medical insurance$500$500$500
Visa fees$500$500$500
Misc costs$1,000$1,000$1,000
Total costs$9,662$9,662$9,662
Monthly gross profit$15,338$15,338-$9,662
Quarterly gross profit$21,014

The consultant has generated 50k in their first 6 months, which is a common minimum target amongst most agencies. Looking at the gross profit of the consultant over their first 6 months (-$30,386 for Q1, and $21,014 for Q2), they’re running at a loss of SGD $9,372.

As you can see from the P&L over each quarter, the profit really only starts to kick in for Q3 and that’s only if the consultant is on target.

Over the three quarters, the consultant has generated SGD $23,480.

Breaking down each line on the P&L

RevenueFee income of consultant
SalaryBasic salary
CommissionCommissionable income
Ordinary CPFCPF paid by the agency on ordinary wages (base salary)
Additional Wage CPFCPF paid by the agency on additional wages (commissionable income)
Google / MicrosoftFor emails and storage
ATSRecruitment software (e.g. Vincere, Bullhorn etc.)
LinkedInLinkedIn costs (Recruiter Lite, Job ads etc.)
ZoomVideo calls
EquipmentLaptops, mouse, business cards etc.
OfficeCoworking or private office
EntertainmentCandidate, client meetings or team events
Medical insuranceHealth insurance, dental etc.
Visa feesOngoing visa application fees, EP renewals etc.
AccountancyOutsourced accounting services to consolidate financial statements, payroll costs etc.
Misc costsOther misc costs

Net profit and tax

As a disclaimer, this example is focussed on gross profit and not net profit. It does not include corporate tax. If the agency is operating in profit, you can deduct another ~17% (this is the standard flat corporate tax rate in Singapore, but the figure will change depending on your jurisdiction).

Where is all that profit going?

It’s true, high performing recruiters are very profitable for an agency. As you’ve seen, there is a ramp up period before becoming profitable, but why do they not earn more commission if the profit in a good quarter is so high?

Preparing for a bad quarter

This is one quarter of profit, but the recruiter is still relatively new to the business in quarter 3 and may not have a profitable quarter 4. It can take a year or two to get to a level where billings which are consistently strong every quarter. That profit is there to support the consultant during a bad quarter.

Non-billing functions

The P&L above is based on a boutique. They do have non-billing costs such as equipment, visa fees, accountancy etc. If you’re working for a global agency, they will have much higher costs to support consultants that reduce the profit per consultant. Some examples of these costs are non-billing support, such as office managers, marketing managers, learning & development, non-billing managers, senior leadership and so on.

The more investment in non-billing functions, the higher the cost per consultant. Larger firms with a strong platform can enable you to bill more, and they can counteract their higher costs for non-billing functions by reducing earnings on commission schemes.


The P&L is based on one single consultant who is performing well. In reality, there will be other recruiters in the business not performing as well, running at a loss. The company needs the profit to invest in supporting others in the business.

The typical split between strong performers, average performers and underperformers is a third each. The boutiques will have a higher percentage of consultants performing well because they tend to hire more experienced recruiters, whereas the global players will have a lower percentage performing well because they need to train consultants.

Building cash reserves

During times of uncertainty in the market, major events can disrupt business as usual and take a hit on profit.

The best example of this was Covid-19. For a period of roughly 3 – 6 months, hiring nearly came to a standstill and agencies had to eat into their cash reserves to grind through.

Another example could be the economic outlook in 2023, the shift in market will affect the billing of consultants and a company must be prepared with cash reserves to deal with that.


Last but not least, growth! Unless it’s a lifestyle business, the agency can use the profit to invest back into the business to hire new consultants, launch new desks or even offices.


The P&L above is purely illustrative and does not include every cost a recruitment agency incurs on one consultant. The jurisdiction in which an agency is registered to will also have an effect on costs when it comes to net profit, such as tax, pension funds and so on

I am by no means an accountant and my knowledge only goes as far as running management accounts for a small business!

Do you want to learn more about recruitment entrepreneurship?

As the Co-Founder of Vocay, I have overseen the P&L of a small business and I love blogging about entrepreneurship, especially in the field of recruitment. My business partner, Roger Smart, built Charterhouse Partnership from zero to 180 recruiters across 5 offices and he also writes articles about his entrepreneurial experiences.

If you’re interested to learn more about recruitment entrepreneurship, and if you found value in this article, please consider subscribing or following us on LinkedIn to have new articles for recruiters like this delivered directly to your inbox.

I also specialise in recruiting recruiters for agencies in Singapore, so please feel free to connect with me on LinkedIn for a chat.

Entrepreneurship Recruitment

How to scale a recruitment business from startup to over 100 recruiters

In our entrepreneurship publication, we have explored whether now is a good time to start your own agency, how to start your own business and what potentially could attract top billers to your brand new startup.

You now have an agency licence, a home or serviced office, a CRM and a website – it doesn’t sound like much, but it’s everything you need to build the foundations of what could be the next big brand in your recruitment market.

It’s going well: you’re two months in with interviews scheduled, your first few clients and you’ve projected your first placement by the end of month three. You’ve now closed it with a sigh of relief whilst you wait 30 days to be paid.

It’s at this point where your mentality starts to shift. Your client hasn’t paid within 30 days and you are getting slightly nervous about your cash flow as you enter day 40. The client pays on day 50 and you’re already experiencing some of the first planning challenges of being an entrepreneur. It’s an exciting evolution and you are starting to talk to recruiters about joining you on your journey.

How do you take your expansion from the stage of a 3-man band to over a hundred people over the next decade? Find Recruiter reports that 94% of agencies in Singapore employ less than 10 people. Of course, there are a number of lifestyle businesses but why is it that some businesses never grow beyond this point and why do some grow extremely quickly?

I will draw very heavily from my personal experience. I have built a recruitment business from one person, to over 150 recruiters across 5 offices in 4 countries. I have no problem admitting that I got a great deal wrong and hopefully my lessons learnt can help you in your journey.

Here are 4 important ways you can scale your business:

Cash is king and balancing risk with reward

Having cash to scale is a prerequisite to building a recruitment business. You may start with close to nothing in the bank, or you may start with a small investment from a private individual or PE fund. Either way, you will need to build a model where you are able to generate enough cash in order to hire the best people in the market.

I started Robertson Smart (known as Charterhouse today) with a relatively small level of investment, and it’s fair to say the prevailing months were a rollercoaster. I had two choices: take the safe route of hiring a few recruiters and wait until they became profitable, or take a risk and scale faster. I did the latter. I won back the initial investment within 9 months and we were well on our way, scaling far quicker than many of our competitors.

Have a crystal clear vision

Looking back, I never imagined that having a clear vision would be one of the most important ways you can scale a business. I’m not sure if I had a vision on day 1. Rather more of a desperation to focus on the things in front of me, making my first placement so I could pay my rent in Dubai and taking things one step at a time.

Over time, I began to grasp how important having a vision was. It became very apparent to me that a business needs a strategic plan and people need to buy into what you’re looking to achieve together. You will look back in ten years and recognise the seeds of your business were sown on day one. What you do in year one will impact you in the future. Most of my war stories come from the very early days of setting up from scratch and some of the decisions I made then stuck with me until my last day at the firm.

I’m suggesting that in your first year, you look into the future. What do you want the business to look like in three years, five years and even ten years? Focus on where you want to be on a personal and commercial level, and work backwards from there. You don’t necessarily need this on day one, but as you begin to expand and attempt to attract the best or right people in the market, it’s crucial.

What are your ambitions? Do you want to build a business with over 100 recruiters and 5 offices? Do you see yourself as a fee earner forever, or do you want to hire people better than you to replace yourself as you progress?

There are, of course, no wrong or right answers here, but having a clear vision will help you make decisions today. These are the decisions that will realise your ambitions and stick with you as you grow.

Training & leading from the front

Training begins at induction, no matter how experienced a recruiter may be. In the early Robertson Smart days, it was common for us to hire industry professionals, such as lawyers or bankers, who had zero recruiting experience. It was vital then that we adopted a ‘big company’ approach even if we were just 6 recruiters.

At Robertson Smart, we developed a personal induction and training program. I’m sure there are a few recruiters out there who remember the RS-TIM! The training and induction manual was given to every new starter and accompanied them throughout the first three months of induction. As we began to open additional international offices, we shot a series of training and induction videos that could be accessed by a company PC. It sounds normal now, but back then any access to internet and video content was very limited. I don’t mind saying that I think our training materials were quite exceptional at the time, and one of the important factors behind helping people develop into great recruiters eventually leading to scale.

Naturally, a founder is the ground zero of a business, a mentor that should lead from the front. All of that is vitally important as the business expands. However, once you get to a certain size in an office, or you open up an international office, then you begin to get spread very thin. Training then disseminates the message of the founder across the growing business which assists in maintaining cultural consistency. It’s a great economy of scale.

Motivation, people & culture

I had motivation, people & culture top of mind. It was extremely clear to recruiters why they would join Robertson Smart or Charterhouse over other firms. By having a consistent and clearly communicated culture, an agency will begin to attract a team who are equally similar in motivation, attitude and outlook. This will most certainly assist greatly in being able to scale. If your cultural values are inconsistent and all over the place, then don’t be surprised that your business is too.

Hiring the right people with motivation and commitment is a vital component of any recruitment business. If the recruitment leaders are hugely passionate, constantly positive and the business appears to be on the up, then this is the fuel in the engine. At this point, you are beginning to grow. You have hired fifteen recruiters in Dubai, the same number in Singapore, so it’s time to tackle Hong Kong. Tell me that is not an exciting story to share with your current and potential team members.

I think we very effectively used motivation to scale the business. Monthly, quarterly and annual incentives and trips made it a fun place to work. We weren’t shy in spending money but it was always connected to achievement. To celebrate achieving SGD 1 million from the launch of Singapore, we took the whole team and partners to an island resort in Bintan for the weekend – all expenses paid. People began to hear that we were a fun place to work and that we paid very competitive commissions.

How far I scaled

We managed to scale from just me to 150 people in Dubai, Singapore, Hong Kong, Sydney & Melbourne. We were driven by a clear strategic vision coupled with the development of a positive and healthy culture backed up by huge levels of enthusiasm, ambition and motivation.

This perhaps makes it sound far easier than it actually was. We hit many road bumps along the way. We had recessions, as well as booms. We had the 1997 Asia financial crisis, the tragedy of 9/11 in 2001 and, of course, the SARS epidemic in 2003. All of these events hit us very hard but the 4 factors above remained consistent throughout.

I hope this has been useful to any recruitment entrepreneurs considering expanding their businesses and I’m very interested to hear about any comments with regard to the factors above. Please let me have your thoughts on LinkedIn and I’m looking forward to an interesting discussion.

If you’re exploring recruitment opportunities in Asia, please do not hesitate to connect with me on LinkedIn for some advice and career opportunities.

Entrepreneurship Recruitment

How to start a recruitment agency in Singapore

Back in May, I wrote an article about whether now – during COVID-19 – was a good time to start your own recruitment agency. Since then, a number of startups have sprouted up across the Hong Kong and Singapore markets. The volatility in the market has stabilised as we head towards a long road to recovery and arguably there is no better time to start an agency than today.

In this guide, we explore the considerations and steps that you, a budding recruitment entrepreneur, need to take if you’re ready to launch a new firm from scratch. We cover the journey from both a planning and operational perspective, so you can take necessary action to get things moving.

In the past and in the present day, I’ve launched recruitment agencies in both Hong Kong and Singapore. I’ll be talking about my experience starting with Singapore first and Hong Kong next week.

Step 1: Business plan, financial and cash flow projections

Before getting ahead of yourself, writing up a comprehensive business plan is key to keeping your thoughts and ideas structured. With the amount of information you need to consider before you start to trade, there’s no doubt it will be overwhelming at times. Having a plan keeps you accountable and organised within a specific time frame.

Within your business plan, you should have your financial projections ready to go, including your cash flow document which I think is one of the most important documents of all. Cash is king when running a business, and when you’re battling time, keeping yourself honest with this document will help you sleep at night in the early days.

It’s highly likely you will produce less revenue than you project and spend more money than you forecast. My rule of thumb when it comes to cash flow is writing a 20% variance above your projected figures.

Whilst planning is essential, it’s important to avoid getting carried away by writing pages and pages of documents that you won’t read. Keep it short and sweet. Place emphasis on action to stop falling into the trap of over-planning. 

Step 2: Secure your funding

Once you have your plan ready to go, securing your funding is the next step to recruitment entrepreneurship. If you’re not completely self-funded or if you haven’t secured funding yet, then kick this off now.

You may be relying on a chunk of investment, a facility from a bank, crowdfunding or perhaps you and a partner have invested equal amounts into the business. There are lots of creative ways you can start to raise capital, but one thing is for sure: more often than not, it will take longer than anticipated to secure.

Keep in mind when planning your funding that a significant deposit of paid up capital in the bank account will certainly assist in any EP applications you may make.

When it comes to compliance with company formation and opening a bank account, you’ll need to provide back-up documentation. It takes time and will distract you from the important task of kicking off revenue generation. 

Step 3: Company formation

Singapore is renowned for its transparent company registration and formation process. You will need the services of a law firm or a company formation agency.

There are lots of options in Singapore at different price points. My advice is to shop around, but ideally you want to obtain references – preferably from individuals involved in the recruitment industry. 

The good news is that the cost is not astronomical. Forecasting the cost should also be very predictable thanks to the high level of transparency throughout the process. I know of a service that costs around SGD $4,000 for the basic company formation, and returned a successful EP application. I would happily recommend the firm I used if you want to contact me directly. You could pay a lot more, but you don’t need to in my opinion.

Step 4: Open a bank account

Opening a bank account is easy; the formation company is highly likely to include assistance in this step if you paid for it, as per your package. Formation agents will arrange everything for you and the bank representative will come to see you in their office. A formation agent I’ve worked with in the past recommended OCBC, and the process was speedy, simple and painless.

Step 5: Obtain a recruitment licence

You need to obtain a recruitment licence from the Ministry of Manpower (MOM) before you begin to operate as a recruiter. This is where things get a little more complicated as you need to appoint a Key Appointment Holder and determine whether you need a Comprehensive (all, local or non-FWD) or Select licence.

A Comprehensive (all) licence allows you to perform recruitment with no restrictions on the size of placements you make. On a Select licence, you can only place candidates who are earning more than SGD $4,500 a month.

Choosing a licence will determine if you need to take a CEI exam (if you haven’t already) and how much investment you need to make for the licence. A Comprehensive licence requires a SGD $60,000 security deposit, whilst a Select licence requires a Banker’s Guarantee of SGD $20,000.

In most cases, to keep costs low, you can start on a Select licence and see if you need to upgrade in the future.

This can seem quite daunting initially and if you dont research this properly, you won’t fully understand the differences between the licence types. The good news is that everything you need to know can be found on the MoM website which I would recommend investing some significant time into reading.

Step 6: Employment pass (if applicable)

This step only applies to non-Singaporeans or non-PRs. This is one of the trickier steps in the process because obtaining an EP, even if you’re the founder or the first employee of the business, is not guaranteed.

I would strongly recommend consulting with a company formation agent or lawyer, who will advise on the documentation that you need to provide to give you the highest chance of getting an EP approved. They do this for a living and will be able to guide you through the pitfalls and challenges of the approval process. 

To set the expectation, the application process will probably take longer than anticipated, especially taking into account the current economic climate. Consider the possible outcome of a rejection along with an appeal. Often you will be asked to provide additional information to support your application.

Preparation and research is the key.

Step 7: Find an office

You’ll find that almost every startup opts for a serviced office. In Singapore, there is a massive choice and you, as the consumer, have many options to look at including coworking and private office solutions.

Firstly, decide where you want to locate your business. Consider the needs of your future staff as well as the convenience factor for visiting clients and candidates. Both are vitally important, especially as we start heading back to the office over the next few months.

Flexibility and negotiation. Negotiate hard (especially now), retain flexibility and avoid longer term fixed commitments. If you are setting up on your own, consider coworking access at a WeWork or Spaces solution to keep costs low. You can even consider Compass Serviced Offices, founded by a former recruitment entrepreneur, Andrew Chung.

Step 8: Start billing!

Your company is formed, you have obtained your bank account, recruitment licence, your employment pass and you finally have an office. This is only the beginning. You’re now ready to get on with the important stuff and start your journey as a recruitment entrepreneur.

If you’re a recruiter, please subscribe for future guides and how-to’s that will be sent direct to your inbox every Thursday.

Disclaimer: This article is written with an intention to provide basic advice, but we stress we are not legal professionals, so please seek advice from a formation agent or qualified lawyer.

Entrepreneurship Recruitment

Is now a good time to start your own recruitment agency?

Singapore is 2 weeks away from the conclusion of circuit breaker and Hong Kong restrictions are gradually being relaxed. Whilst it’s too early to predict whether this slow yet positive trajectory for COVID-19 recovery will continue, is now a good time to take the plunge and start your own recruitment agency?

It could very well be. Some of the best search and recruitment firms that we know in the market today were born in the aftermath of SARS, such as Kerry Consulting. Some also launched after the global financial crisis in 2009/10, such as Argyll Scott. It is, however, important to analyse the implications of the virus in your market and region.

I’ve been involved in over 10 international recruitment startups and have learnt crucial lessons along the way. I’ve compiled a list of 7 things to think about when considering if now is a good time to start your own recruitment agency.

Timing, ramp-up and runway

A golden rule for me: never plan on collecting a single dollar in less than 180 days from launch. 

You must allow time to ramp-up, no matter how well-connected or experienced you are. Whilst you may have a strong network, it still takes time to re-engage with the market and sign terms under a new brand no one has heard of before.

This point is more relevant than ever in today’s market as you must also account for less hiring activity and drawn out interviews. The caution to hire and logistics of video calls will create longer processes.

Almost always you will bill less and spend more than you had planned, so this is why it’s important to consider if you have enough runway to make the investment.

Job supply in your market

No one can be sure about when the economy will recover from COVID-19 as there are still too many uncertainties. It is, however, important to know that your market has some level of job supply or is expecting a hiring surge post-recovery.

Some markets such as E-Commerce are performing well. Although competitive, current hiring activity and expected hiring activity post-recovery would suggest this is a good market to get started in. Other markets such as Hospitality and Travel are in decline for obvious reasons. It will take a lot longer for these industries to recover and for this reason they may not be the best markets to get started in.

Another consideration is whether your client base is dominantly regional or international. If your client base is mostly Europe or US headquartered, these regions are still in the midst of the crisis and any decision they make on resuming hiring in Asia comes from the top down. If your clients are SEA or Asia based, the case trajectory is stable and it’s likely hiring could resume faster.

There’s no doubt the first few months will be extremely challenging whatever market you choose, but post-recovery is a great opportunity for new recruitment businesses, and may just very well be the catalyst for your success!

Candidate supply in your market

Whilst it depends on the industry you’re working in, there is a surplus of great talent available in the market today, far more than normal. This is a positive for new recruitment businesses, especially when the economy recovers and hiring starts to surge.

On the other hand, the most sought-after candidates in today’s market may still be employed. These candidates will naturally be more cautious when moving jobs over the coming months, even post-recovery.

Finding recruiters for your business

Finding great recruiters to join a startup has always been very challenging and one of the biggest barriers to scaling a recruitment business.

There are recruiters available in the market today that you never imagined would be. Ever. Now is a great time to tap into a pool of very highly qualified recruitment professionals who may be more open to the risk of a startup.


A start-up in theory starts at zero so the only way is up. Your competitors are likely to be in a disrupted state due to some very tough decisions they may have had to make over the last few months.

Although disrupted, competition shouldn’t be underestimated. Some of the better recruitment brands have pulled together strongly and are powering through the current state of the market. 

Clients are also less likely to use agencies during these times due to cost savings. If they do resort to using an agency, you may find it challenging to win business over proven suppliers.

Competition is certainly something to consider but in my experience it’s not a force to be reckoned with, it’s a force you have to go up against. There’s a reason why there are over 3,000 registered agencies in Singapore.

Cost negotiation

Use the downtime to strongly negotiate lower costs when it comes to serviced offices, suppliers and other overheads.

Consider taking a flexible and creative approach to hiring staff, such as a ratchet increase of salary based on target achievement or tenure.


A recession or crisis can be the best time to start a company. Governments can sometimes be more lenient when they are looking to attract businesses and create jobs. Not always the case as sometimes more restrictions can be imposed. It depends on the country but it certainly should be a consideration in your plans.

There are huge challenges and risks associated with starting your own recruitment agency during COVID-19 and it’s not for the faint-hearted. However, should you be willing to take the risk, you may reap the rewards in the years to come.

Good luck! If you found this advice useful, please subscribe by entering your email below and you’ll be the first to know about new articles.