Setting up a recruitment consultancy? Try software as a service.

Whether you’re starting a new recruitment business or expanding an existing one, somewhere along the line you’ll have to consider how you’re going to provide the systems which will power your operation.

But before you start putting together a wish list of must-have features and functionality there’s a fundamental choice you need to make which will have a big impact on your budget and your resourcing. Do you set up and run your own IT infrastructure and software or do you buy the service in from a third party? Colleague Software has been providing fully integrated front and back office data management systems to the recruitment industry since 1994 and has an extensive list of UK and foreign clients including InterQuest, FDM, Networkers MSB and Square One Resources.

If you’re starting a new business you’ll no doubt want to manage your set-up costs very closely indeed. If your plan to get off the ground initially looks like two or three people, working out of a small office you probably won’t relish the thought of installing a server, buying all the software you’ll need to make it work and then taking on the role of IT Director when for some unknown reason, it doesn’t.

If you decide to keep everything in house even a small network catering for just a few users could cost several thousand pounds to set up and may require specialist knowledge to maintain. The licenses for the server software alone could easily run into four figures and that’s before you’ve added hardware and the integrated recruitment software which makes the whole package work together. Keeping your start up costs as low as possible and maintaining your personal focus on winning clients and placing candidates rather than troubleshooting IT problems should be your main priority and that’s why Software as a Service has become so popular with small start ups with big ambitions.

Software as a Service (or SaaS if you prefer your acronyms) is one of the fastest growing areas of the IT industry and in essence means that software applications are hosted by a service provider and made available to customers over a network, typically the internet. This is the alternative to the traditional model in which software is bought and installed on your own hardware.

A typical Windows based SaaS solution for a recruitment company will include Windows Server, Exchange Server, SQL server and Office all integrated with a specialist recruitment software package which enables all the components to work together and make tasks such as candidate data management and payroll operations simple and straightforward.

The key benefits of the SaaS approach from a technical point of view include easier administration because the service provider is responsible for making sure everything is working properly, automatic updates as software is improved and system compatibility because all users will be running the same version of the software. Some systems also provide high levels of anti-virus security which check your emails before they even get close to your network and there’s also the added benefit of being able to run your software from anywhere you can get a broadband connection.

From a cost management perspective the key benefit of an SaaS solution is that it usually doesn’t require a large initial outlay. Some providers now even install their systems with no initial charges what so ever and simply apply a monthly ‘per user’ fee. The other major advantage is that you are able to buy in your IT requirement on a per user basis and peg your IT spend directly to your need.

A SaaS solution is completely scaleable to your business whether you’re in a period of growth or retraction. You only pay for the users you actually need at the time and it’s flexible enough to be managed from month to month if necessary. And because it’s the service provider’s responsibility to make sure everything works as promised you don’t need to employ your own highly skilled IT technicians to keep your system in perfect working order.

David Seear, Chief Executive and founder of Korus Group, chose a Software as a Service package known as ‘Colleague Live!’ in April this year.

“I’ve used Colleague recruitment software pretty much since they started in 1995 so it’s a system I was already very familiar with. When I started Korus earlier this year I wanted to get the company up and running quickly and with as little initial outlay as possible. I considered buying in the IT set-up and running it ourselves but the costs would have run into thousands of pounds just for the windows licenses and servers so I talked to Colleague about their Software as a Service package and it made a lot of sense.”

David initially set up Korus with a two user package in April 09 and due to the company’s rapid success he quickly increased to nine users by September.

“Using Colleague Live! has been the ideal solution for us. When we’ve taken on a recruiter we’ve simply had to pick up the phone and add another license and they’re up and running almost immediately. The flexibility also means that our technology costs are directly related to our requirements. So far we’ve only increased the number of users but if we did ever need to reduce numbers our technology costs would come down proportionately too. If we’d chosen to set up our own IT infrastructure we’d have the added pressure of carrying start-up costs for a size of business we wanted to be, not the size of company we were at the time.”

For anyone looking to set up a new recruitment business, or expand an existing operation, Software as a Service offers a cost effective and scaleable alternative to investing in your own IT infrastructure and should definitely be considered before writing out any big cheques.