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How to Start a Staffing Agency in 13 Steps

Starting a staffing agency can be a rewarding business venture. It connects employers with qualified candidates. However, to be successful in this business, you will require careful planning, an understanding of the job market, and effective management skills. You can also start a staffing agency from home with limited resources. Here in this article, we have provided you with a step-by-step guide on how to start a staffing agency.

While businesses around the globe are growing at an exponential pace, the dearth of the right professionals continues to trouble most companies. A staffing agency is primarily a service-based business. Starting an employment agency needs proper planning. You will have to bridge the gap between what companies are looking for and the right individuals.

It’s the job of an employment agency to find the right personnel for a firm. Be it technology or finance, if a company doesn’t have the right workforce, it will never be able to perform at its full potential.

Here are the 13 Steps to Start a Staffing Agency

1. Evaluating the Market

You need to start with market research. Understanding the market is very important for any staffing agency. If you can’t understand the demand, how will you be able to deliver? So, start with where you wish to operate. Collect information like who’s your target market, where you wish to offer your services, which industries will you cater to, etc.

Industry knowledge is very important in this business. You will have to list your contacts accordingly and have to place the right candidates.

2. Working on Your Basics

Next up you need to start working on the basics. This will include what you want to offer, do you have anything better than your competition and why would a company or an individual get associated with you. It is crucial to define your agency’s niche, such as temporary staffing, permanent placement, or specialized roles.

If you are no better than what’s already available in the market, why would even someone choose you over already established employment agencies?

Work on what’s missing in the market. Better customer service, or unavailability of more options or others if are charging high. This will help market your employment agency against others.

3. Formulating a Business Plan

This is crucial. Starting a staffing agency will have will put you in a competitive. Either you already will have good employment agencies or someone else can come up with a similar service in the future. Both ways will help you to offer better services. Start with documenting a detailed business plan. This may include how you are going to finance your recruiting agency, what are the objectives, goals, and much more.

Explain your plan for why someone should choose your agency over the competition.

4. Name your Staffing Business

It is essential to find a catchy, memorable, and professional name for your staffing agency. In addition, the name must be able to reflect the types of recruitment services being provided to customers. Also, buy a relevant website domain relevant to the name you have selected.

5. Financing Your Staffing Agency

Starting an employment agency will involve some sort of investment. It may not be in the form of buying infrastructure, but creating one certainly will involve some costs. While there are different self-funding options available at affordable interest rates, you can also pitch your idea to some investors.

But unlike other businesses, starting a staffing agency doesn’t include a huge investment.

You can start to work from home or even in a small space in a shared office. The costs to start an employment agency primarily include:

  • staff
  • corporate insurance
  • marketing
  • staffing software
  • miscellaneous expenses

6. Legality & Regulations

Starting a staffing agency will include a legalization process. You have to abide by all the laws. You may need legal help. This will help you to be aware of all the rules and regulations related to the sector.

The laws will largely vary from country to country but mainly will include laws from the Employment Agencies Act and Employment Business Regulations. Instead of blindly relying on lawyers, make yourself aware of the operating laws.

7. Forming a Company

Before you approach any firm to help them find the right candidates, you have to be ready yourself. Register an official name for your company and register your business. Complete the process to make your business legally operational in your country.

If you are from the United States, for example, forming an LLC will fetch you some added benefits at an extra cost.

You should also apply for a business bank account to keep your business transactions separate. You may also choose to set up your accounting method to keep your finances ready in one place.

8. Create an Operational Plan

Now you need to choose how you want to operate. Whether you want to start your recruiting agency from home, or you are planning to get a small place. Will be you offering your services exclusively online or candidates can visit the office for training purposes? Once you start to take up assignments, you will create application pools and interviews.

You have to be professional in your approach to getting success in the staffing or manpower hiring business. Decorate your home office so that when you call candidates for an interview they get confidence.

Contact your phone company for a business line, and consider leasing or buying office equipment like a copy/fax machine, virtual phone system, etc. Office supplies are also necessary to run your business.

If you will only assess CVs and send the candidates directly to the companies, then you can work on an online-only model.

9. Hiring a Team

Now you need to get a team to work on it. Before you help others find the right people, you yourself need a good team. It’s better to go with people who already have some working experience in the field. Once you start to work on your industry contacts, you need to have a team ready to start the recruiting process.

You will need experienced recruiters as well as freshers to balance out a team.

10. Setting Up Your Recruiting Infrastructure

Starting a staffing agency will involve a valid setup of a recruiting process. You will have to invest in the right tools and as well right human resources. While the industry now primarily involves technology and the internet, you have to create your own setup. You need to create a process for receiving applications from candidates and finding candidates with proper credentials for a specific job vacancy.

There are different staffing software packages available on the internet. You can choose to invest in any of them to boost your services.

11. Build a Robust Candidate Pool

The most critical step in establishing a staffing agency is to have a database of the right candidates. You need to advertise job openings through various channels, including job boards, social media, and local newspapers. Screen and interview candidates to assess their skills, qualifications, and suitability for different roles. Furthermore, maintain a database of qualified candidates categorized by skills, experience, and job preferences.

12. Create a Website

It is almost mandatory to create a website for your staffing business in the present day. You must take adequate measures to make the website attractive and user-friendly so that users can move around and search for job openings easily. The website not only adds value to the company’s brand image but also attracts more job providers and job seekers to your online platform.

13. Getting Clients for Your Staffing Agency

You have to understand that your business already has competition. You have to win a client over others by placing yourself. For that, you need a well-detailed marketing plan. Start with chalking out companies that are in need of candidates. Most businesses now outsource their recruiting work to professional employment agencies.

You need to target candidates so that they use your platform to find companies and jobs. Start with social media marketing and then move to professional platforms like LinkedIn to find qualified candidates.

Frequently Asked Questions

What is the Staffing Agency?

A staffing agency or job placement organization matches employers to employees. Placements can be either short-term or long-term. Staffing agencies are compensated when they find a qualified candidate and the company hires the individual. The agency will be paid a percentage of the hired individual’s salary.

Is Staffing Agency Business Profitable?

This is a growing multi-billion dollar industry so there is lots of room to earn money. You get to work from home or in an office. You have the ability to own your own schedule and don’t have to answer to anyone. Additionally, running a staffing agency requires low start-up costs and low overhead.

You can make unlimited good money by just helping companies provide the right manpower. Say you find a job for someone “the candidate” who will be making $80,000 per year in salary.  One can charge the company 20% of the candidate’s $80,000 salary. You receive a check for $16,000 within 30-90 days.

The business of staffing is rewarding as you are giving back and flourishing the world’s global economic system by being a small business and helping other businesses find employees. You get to impact people’s lives every day by assisting them with finding employment.

Who Can Start Staffing Agency?

Anyone can start a staffing business with little to no experience in the industry. However, people with experience in staffing business operations will have added advantages. People with no experience need to work extra hard and gain experience as fast as possible.

How big is the staffing agency industry?

The staffing industry generated approximately $117 billion in sales in 2012: $104.8 billion from temporary and contract staffing and $12.2 billion in search and permanent placement services.

How many companies use staffing services?

Latest data reveals 90% of U.S. companies use temporary staffing services.

How many staffing companies are there in the U.S.?

According to the most current U.S. Economic Census data available, there were about 17,000 firms that were in business for a year or more during 2007. Those companies operated approximately 35,000 offices.

What accounts for the growth of the staffing industry?

America’s workforce is changing as more and more people are looking for the flexibility that temporary work provides.

Source: American Staffing Association, U.S. Bureau of Labor Statistics.

The staffing industry has experienced a major boom in the last few years worldwide. More companies now need the right individuals, while thousands of candidates are finding their dream jobs.