Retired Talent Agency's Perspectives - Example

Business Plan

Retired Talent Agency

XYZ Retired Talent Agency

Shanghai

Telephone:

Fax:

Email:

Table of Contents

I. Executive Summary:

The XYZ Retired Talent Agency, aims to exploit this business opportunity by locating talented and skilled professionals across various fields including Management, Finance and Accounting, Engineering, Architecture, Teaching and the likes, and helping them find feasible employment with firms in need of their skills, experience and knowhow. The customers comprise of firms and businesses as well as retired seniors. The services provided to both these sets of customers would be customised and tailored to suit their needs. This business is in its nascent stages and has been in existence in Western countries for a while now. There is an apparent demand for such services given the surge in number of retired senior employees over the age of 60 years. The trend is likely to gain momentum in the long run given that the senior citizens between the age group of 60 and 70 years are perfectly healthy and wiling and able to work. Also re-entering the active workforce would ease the burden on the government as well as on the normal tax payers and at the same time afford the elderly an opportunity to be independent and actively contribute to the economy through their expertise and skill.

II. General Company Description:

The Retired Talent Agency aims at locating and hiring talented and skilled professionals, well past their official retirement age (60 years), who are currently unemployed and are willing to regain meaningful employment. The Retired Talent Agency aims to hire retired professionals across diverse fields and help them seek gainful employment thereby contributing to the economy. The talent agency, proposed to be set up in Pudong District area of Shanghai, China specialises in matching skills with market demand and is specifically targeted at senior retired professionals. There is an acute need for a specialised personnel agency in Shanghai, given the rapid rise in unemployed elderly population and rapidly developing areas in and around Shanghai. The agency plans to bridge the gap between the demand for skilled working professionals and the lack of professional permanent placement agencies for the elderly. This retired talent agency specialises in recruiting skilled workers and matching them with prospective clients /firms thus enabling the firms to save valuable business resources required in hiring employees and at the same time enabling currently unemployed yet highly skilled workers with extensive work experience and willingness to work, seek employment in such firms.

Mission:

The mission of XYZ Retired Talent Agency is to offer customised employment solutions to both firms in search of skilled, qualified and experienced workers as well as retired employees looking for work. The agency will provide firms with skilled professionals with extensive work experience and at the same time provide the elderly unemployed workers an opportunity to seek gainful employment in safe and professional work places in need of their skills.

Vision:

To help improve the quality of life by matching skills with need. This business idea supports the agency's vision by providing a wide range of customised solutions designed to benefit both the employers and the employees.

Client profile:

The typical client comprises of firms /businesses as well as retired seniors (between the age group of 60 and 70) from across all major industry sectors including Management, Law, Architecture, Finance & Accounting, Engineering and the likes.

III. Products & Services:

The agency will provide prospective clients (firms) with skilled and highly qualified workers on a contractual basis as well as to fill permanent/ long-term positions.

Service Flow Diagram

Pricing & Fee Structure

1. Registration Fees

The clients (prospective employees as well as firms) will be charged registration fees, which are fully refundable. If the clients do not receive any job offer /interview in a month from registration, then the full amount would be refunded.

2. Agency Fees

- The firms will generally be charged flat 40 per cent of the candidate's annual salary.

- Special discounts up to 10 per cent will be offered to recurring clients.

The fees charged to firms, vary depending on the type employment contracts sought. The fees are divided into four categories, which include contractual/seasonal worker fees, transition fees, permanent placement fees as well as special service fees.

a. Contractual /Seasonal worker fees:

The temporary worker fees refer to firms seeking employees on a seasonal /contractual basis only.

These rates however vary depending on the type of industry /sector i.e., Construction, Finance & Accounting, Top Management Positions, Law (Legal Advisor), Medicine, Architecture etc.,

A flat 40 per cent of the annual salary payable to the employee will be charged from the firms for temporary positions.

b. Transition Fees:

For firms deciding to make the contractual worker positions permanent, the fees payable for permanent employees will be charged.

c. Permanent placement fees:

For employers looking to hire permanent employees, a pre-decided amount will be charged.

Refunds:

In case an employee resigns abruptly without prior notice, or is found to be dissatisfied with the job and resigns within a month of employment, the client (firms) shall be eligible and entitled to a full refund.

3. Special Service Fees

For professional assessment, psychometric testing, competency assessment, and transportation for prospective candidates to help them secure jobs in key positions in reputed firms

IV. Marketing Plan:

- Key Demographics:

Target Market Demographics

There are in all 4.36 million retired seniors, comprising of 30.2 per cent of the total population in Shanghai alone. The number of older citizens over the age of 60 rose by 219,000 during the year 2015, which is a 5.3 per cent increase over the previous year. Furthermore the number of senior citizens aged 100 and over has increased considerably. Nearly 12.1 people per resident in Shanghai today are over the age of 100 years. 24 per cent of such seniors are males while 76 per cent of them were females. Pudong New Area, Huangpu district and Xuhui district were identified as the areas with the most number of retired seniors (Global Times, 2016). The senior citizens are hence highly in favour of businesses and firms associated with the elderly and aimed at their needs and requirements (Shanghai Daily, 2015). The aim of the XYZ Retired Talent Agency is to capture at least 10 per cent of the total market share by appealing and reaching out to the retired seniors in the area.

Location

Shanghai is one of the most populous and largest cities in the world, with a recorded population of 24.16 million in 2016. The city has a low birth rate and most of the population is accounted for by migrants from around the country. Shanghai is also known for having the lowest natural birth rates in the entire world with fertility as low as 0.7 per cent (Country Digest, 2016). The country’s one child policy has further added to its woes whereby the population of older citizens far outnumbers those that of the younger working population.

Economics:

• Industry Demographics/ Facts

Although there are various recruitment and talent management agencies in Shanghai including those set up in Pudong district, there are however no talent agencies targeting the chosen demographic i.e., retired seniors. Most of the talent management agencies in Shanghai are aimed at providing recruitment and talent management services for young and aspiring working professionals and cater to the youth market.

- Size of the Market

Estimates suggest that approximately 30 per cent of the total population in Shanghai comprises of retired professionals above the age of 60 years. There is hence immense potential to tap this market, given the lack of competitors offering similar services as well as need for skilled and experienced professionals in the rapidly developing Pudong district region. The key aim of the XYZ Retired Talent Agency is to help place at least 10 per cent of this potential market in gainful employment and increase revenues for the firm in the process.

Competition:

There are various talent management agencies in Shanghai, especially in the Pudong district area, where the proposed business is planned to be set up. This includes:

Sr. No.

Name of the Agency

Services provided

Location

Type

Established in

1.

Hays Recruitment Experts Worldwide

Recruitment & Talent management

Beijing, Guangzhou, Shanghai

London based firm

1867

2.

Hudson Plc

Recruitment & Talent management

Shanghai

New York based firm

2001

3.

Monroe Consulting Group

Specialised executive headhunting search services

Shanghai

Shanghai based firm

2005

4.

Robert Walters

Career advice and recruitment services

Shanghai, Beijing and Suzhou

London based firm

1985

5.

Direct HR

Specialised recruitment services

Beijing, Ningbo, Shenzhen, Shanghai

Shanghai based firm

N.A.

*N.A = not available

Promotional Budget:

The initial budget for advertising and promotion is listed below:

• For running bus advertisements for a month - $ 15000
• For distributing pamphlets and cards to senior citizens - $1000
• For arranging meet ups at senior citizen clubs - $ 500
• For running newspaper advertisements – $ 10,065

A total of $26,565 would be used for promotional purposes of which $15000 would be before start-up and the rest $11,565 would be on going for a period of six months.

Advertisement in Newspapers

Sr. No.

Name of the Newspaper / Publication

Type of Advertisement

Rate (RMB)

1.

Oriental Daily News

Half-Page Color

7296

2.

China Press

Half-Page Color

16,900

3.

Sin Chew Daily

Half-Page Color

33,210

4.

Kwong Wah Yit Poh

Half-Page Color

9,805

Total

67,211

The total print advertisement expenditure in USD amounts to 10,065 RMB (See Appendix 5).

V. Operations & Resource Plan

The key focus is to establish a link between the untapped market potential and the demand for the same. In order to achieve that, the agency will be located on the Nanjing Road, Pudong District, Shanghai. It is an international shopping hub and one of the busiest and premier shopping streets in China. The street is named after the city of Nanjing and is well connected to the city's airports and subways (Travel China Guide, 2016). The close proximity to key sources of transportation makes it a highly convenient choice of location for the agency because it enables the prospective clients to easily access and contact the concerned people. Since the location provides easy walk-in access to the prospective clients this location would prove to be highly appropriate and profitable for the business. The businesses are thriving and the city attracts considerable foreign investment, which has resulted in its immense growth and redevelopment (Pagnotta, 2011). There is hence likely to be a higher demand for experienced and skilled workforce and employees who are able to contribute to the company's growth through their skills and experience. The major competitive strength of XYZ Retired Talent Agency is to help capitalise on the new trend, and help firms acquire a skilled workforce at relatively cheaper rates. Talent agencies catering to the needs of retired people have gained momentum in the West but are still a rarity in the Asian market, particularly China. This offers the agency a unique competitive edge over the other recruitment agencies, which cater primarily to the youth market.

VI. Management & Organization

Legal form of ownership

The XYZ Retired Talent Agency is a partnership firm, comprising of three partners. This type of ownership is chosen because the partners have a common goal and have pledged to raise the needed funds through personal contribution. Also, all three partners have faith in the business idea and believe in the futuristic goals and vision of the company.

Management & Organisation

The business will be initially managed by the three partners on a day-to-day basis. All three partners have diverse educational backgrounds and have diverse work experience thus providing them the unique insight into the job market for the target audience. Partner A will be responsible for managing the IT department of the business i.e., creating, updating and maintaining client database, and running day to day back-end operations and providing technical support. Partner B would be responsible for managing the accounting and finance aspect of the business, which includes creating and maintaining daily accounts, financial statements, and supervising, cost operations. Lastly, partner C will be in charge of handling the marketing and promotions aspect of the business, which includes promoting the newly launched business, contacting clients personally and developing a clear marketing strategy.

VII. Personal Financial Statement

The main aim of this agency for the first three years from setting up business is:

- To achieve a gross profit of 500,000 by the end of year one.

- To reduce expenses and increase revenues by 10 per cent by the end of year three.

- To expand customer outreach and achieve a diverse client mix targeting 60 per cent of the market segment in and around Pudong area.

- To capture 10 per cent of the total market by the end of three years.

In order to achieve the above-mentioned objectives, the partners aim to offer most efficient and high quality services to ensure greater customer satisfaction. The firm is a limited liability partnership venture and all three partners will be contributing to the total business capital need by way of personal contributions as well as bank loans.

Total Estimated Sales for Year 1467,000

Rent 42,000

Total cost of sales425,000

Overheads

Wages & Salaries 60,000

Insurance 36,000

Bank Charges 27,300

Light, Heat, and Power 14,400

Telephone & Internet 18,000

Advertising 180,000

Print, Post & Stationary 24,000

Motor & Travel 60,000

Miscellaneous 18,000

Total Overheads437,700

Net Profit(12,700)

Operating and regulatory environment

According to C 181 Private Employment Agencies Convention of 1997, the term private employment agency refers to all agencies, which offer one or more of the following services:

1. Acting as a link between employers and employees without participating in the details of the employment negotiation regarding wages and other terms and conditions of the job.

2. Hiring workers to work for third parties which are legally established firms.

3. Providing services, which are considered competent and valid by the determining authorities.

The term workers in this case refers to prospective employees or job seekers.

According to the current regulations related to staffing and recruitment, enterprises are free to hire employees by any means or channels. The recruitment and talent agencies operating within the country are required to offer vital services such as guidance to the enterprises with regard to staffing and recruitment, issues related to labour and social security affairs as well as other terms and conditions related to employment laid down by the firms. These guidance policies must be in strict adherence to the rules laid down by the national labor and social security department (Hong Kong Trade Development Council, 2016).

The agencies must supply valid evidence regarding its legal status, an approval certificate granted to such agencies allowing them to operate within the designated area, proof of business license as well as business registration, a written copy of the recruitment requirements proposed to be adopted and implemented while providing the services, as well as other details such as the terms of employment, social insurance coverage offered etc. All the requirements listed must be in accordance with the prescribed laws of the country. Foreign-owned enterprises aiming to set up an office without applying for incorporation of the agency shall not be allowed to directly recruit staff. Such agencies can only be allowed to recruit staff authorized by the state government (Hong Kong Trade Development Council, 2016).

With regard to the advertisements and promotional campaigns, the agencies can do so with prior approval from the local labor and social security department. Placing ads in the print or the mass media including radio, magazines or television without prior legal approval is strictly prohibited. However, owning an office premise for which the agency has legally paid the rent and launching and hosting their own website for the purpose of business, is allowed. Furthermore the agencies are strictly prohibited from engaging in illegal activities such as fraud, provision of false documents to ensure higher recruitment rates, demanding valuables from customers in exchange for jobs, or withholding their documents. Furthermore hiring of people under the age of 16 is also strictly prohibited and punishable by law. It would be the responsibility of the agency to properly verify the legal identity of their customers before placing them in firms for employment (Hong Kong Trade Development Council, 2016). Other relevant regulatory legislations such as Recommendation 188 which states that the private recruitment agencies are prohibited from placing their customers in firms whose workers are on temporary leave or on strike. Replacement of regular workers in strictly prohibited and shall be punishable.

Customer Acceptance:

According to statistics Shanghai is ranked 9th among the most competitive cities for white-collar jobs in the country. The city ranked ninth with a 47.0 index, indicating that there is a high demand for white-collar workers, or workers looking for employment in state-owned enterprises, public companies, and foreign-owned enterprises (Zhaopin, 2016).

The statistics further reveal that the demand for white collar workers is higher in technology sector, finance and management sector, construction, real estate and engineering sector, as well as education and professional service /consulting sector (Zhaopin, 2016).

These are also the key sectors targeted by the XYZ Retired Talent and Management Agency. Thus, the customer acceptance is likely to be positive and higher in the coming years.

The advancement in medical science and improved lifestyles has resulted in a significant and simultaneous increase in life expectancy rates worldwide. Governments in various countries, including China are now faced with the daunting task of supporting their rapidly rising ageing population demographic, which is a major public policy concern. Rising population of retired seniors is an acute problem in Asian countries where the percentage of older people aged over 60 years, to young working population is expected to hit 1.2 billion by 2050 (CNBC, 2015).

The demand for such agencies hiring retired talent is likely to grow considering the fact that the ageing population in China is continuously rising and the pressure on the young working population is growing to sustain and look after the elderly. The pension and retirement funds provided to the seniors is likely to be insufficient in the long run given the rise in inflation and constantly increasing cost of living. Furthermore since the Chinese cultural tradition entails the working-age population i.e., the younger employed generation take care of the grandparents / the elderly, this could no longer be possible in the long-run considering the increased number of retired seniors, which are likely to outnumber the working youth (The Wall Street Journal, 2015).

Thus, agencies offering specialised services such as employment opportunities for the retired seniors, is likely to gain momentum in the years to come since surge in elderly population and rise in life-expectancy has begun to put more burden on the pension funds. This agency is hence best suited for the current market and is best positioned to exploit the available market opportunities by offering sustainable jobs for the retired seniors looking for work.

VIII. Conclusion

The XYZ Retired Talent Agency is involved in the business of providing services to a niche market comprising of retired senior professionals. It aims at offering highly customized solutions to the target customer base by establishing a connection between the demand for experienced professionals and the growing rate of professional and contingent work force in the targeted age group. Research carried out by the proprietors of the business, indicates that there is a change in trend whereby the senior and retired professionals are now increasingly seeking work and evidence suggests that this trend is likely to catch on in the long run. Governments across the developed parts of the world are already considering increasing the retirement age, which is likely to create a market for agencies providing services to this demographic.