The first step is to have a comprehensive business plan. Once you have decided on a name for your company, you have to register the business.
There is a governing body Association of Personnel Service Organisations (APSO) that acts as the governing body for the industry and provides credibility to the agency.
However, it’s costly to and complex to register with them. You don’t have to be a member of APSO to start a placement agency, but it is beneficial.
Seda (Small Business Development Agency) will be able to advise and guide you through this process and they do not charge for their help.
“As most of the staff that works for placement agencies are employed on a contract or temporary basis, you have to apply for an IRP30 through the South African Revenue Services.
The reason for this is so that the contractors that the agency places are safe-guarded and that PAYE and UIF are paid on their behalf,” explains Janine Lombard, director of ABC Resourcing.
Do your research
It is very important to understand and be familiar with the Labour Law of South Africa. Obviously you do not have to understand the entire act, but you must be aware of what minimum wages are, how to conduct hearings and dismissals and understand how to register for PAYE and UIF.
For a placement agency to be successful, an honest workforce is crucial. To achieve this you have to run screening and background checks on your candidates as you do not wish to compromise your reputation because you haven’t done your homework.
“It is a good idea to do a criminal and educational check and obtain references where possible. Companies such as Kroll can do this on your behalf, but you can do them yourself.
Even if the candidate has good references you must test their skills to ensure that they are competent”, says Lombard.
Normal domestic workers minimum wages for those who work more than 48 hours a week:
- Urban area: R6.88 per hour; R309 per week; R1340 per month
- Rural area: R5.63 per hour; R253 per week; R1097 per month
If you place staff on a permanent basis a fee is payable by the client when the worker starts.
It can be anything from 7% to 14% of annual salary plus VAT, covered by a three month warranty and you must have a set of terms and conditions which the employer must sign and accept.
If you are setting up a small office, the law is clear that in this kind of business you must have a separate interview room and a separate office.
Before you send a candidate to an interview, you must prepare a resumes and letter of introduction for the potential employer. You must draw up an employment contract for your candidates and or clients to sign.
The CCMA will be able to assist you in this regard.
Dealing with the client
Interview the client and find out exactly what they are looking for so that a comprehensive job specification can be gathered. From this you should be able to short list candidates that are suitable for the client.
Discuss and inform the client of your terms and conditions and make sure that you have an agreement in place that the client signs when accepting a candidate from your placement agency. In terms of the contract the successful candidate would be subject to a probationary period of up to 90 days.
The contract falls within the parameters of the Basic Conditions of Employment Act and clearly outlines all duties and obligations for both parties.
Preparing candidates for interviews
The responsibility of the owner is to set up appointments with prospective employers for candidates and finalising agreements between parties (employment contract). Prepare the candidate carefully for the interview.
Explain that they must be well spoken, polite, smartly dressed and guide them so they know the right questions to ask:
- What time they start and finish work
- Discuss tea breaks
- How they should answer the telephone
- What their duties and responsibilities are
Establishing a client base
Any new business has to be advertised and a marketing plan must be in place in order to attract business.
Take a small advertisement in the local newspaper offering your services, drop pamphlets from door to door in the area in which you intend to operate.
“In order to attract big contracts with large companies it is very important to have BEE accreditation.
This can be obtained through SEESA who offers clients professional, round the clock employment law support and representation in labour, BEE, skills development and facilitation and all employment matters”, advises Lombard.