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How To Start A Temp Staffing Agency?

When operated correctly, temporary staffing agencies can generate massive revenues and grow at a rapid pace. This is an industry that offers a great opportunity to those who are willing to work for it. Still, very few make it to the top due to the extreme competition and mistakes made by new startups.

However, you don’t have to worry about anything as we have listed below the steps to start a successful and profitable temp staffing agency. Read through the article!

Step 1: Assessment Of Your Skill Set

There are certain skills that you need to be able to do well in this industry. Here’s a list of the five most essential skills:-

  •   Communication skills
  •   Screening and recruitment skills
  •   Management of human resources
  •   Sales and Marketing
  •   Basic knowledge of worker rights

If you lack any of these, try learning them before starting the firm or you can partner with individuals who are experienced in the following. This reduces the risk of failure and gives you a cushion to work harder.

Step 2: Select The Right Industry

It’s better if you play on your strengths. Starting a staffing agency begins with choosing the right niche. Here’s how you can decide which industry is right for you to find recruits:-

  •   If you have already had experience working in some particular industry, try utilizing your connection there.
  •   Learn and understand how the supply and demand cycles of the industry you choose work.
  •   Check our local job boards and look for patterns or themes in them. Make sure that you are adding value to both the client and the recruits.

Our advice would be that you should develop your distinct niche initially, rather than trying to target the entire industry segment.

Step 3: Know Your Startup Costs

Determining your startup cost is an essential step, to begin with. This cost can be divided into two parts- Establishment and Operational costs.

Establishment costs are those expenses that are required to set up the foundation of your firm. Mostly, these are one-time costs and are required to be paid even before starting the operations.

Whereas operational costs are those expenses that are needed for the proper functioning of the business. These include expenses made to find employees, and clients, and provide your services.

Step 4: Choose An Appropriate Company Name

As they say- the first impression is the last impression and your company’s name is the first thing your potential clients will notice.

  •   Choose the most relevant name for your business and check whether or not it’s trademarked or already being used by someone else.
  •   If not, then register the name of your company.
  •   Also, get your domain name ready.

There onwards, you’ll have to get all the licenses and permits.

Step 5: Get Legal Protection

You may not think of it when your business is in the initial stage, but trust us when we say this, forming a legal business entity will prevent your staffing agency from being personally liable if you get sued.

Also, while selecting a legal business entity, like a LLC, DBA, or corporation, remember that they will have an immediate impact on your decisions and choices.

Step 6: Receive All Permits And Licenses

Study more about your business and figure out what kind of permits and licenses, you’ll need in order to start your firm. The permits required vary from place to place and niche to niche. So, do some research on what permits you need before starting your staffing agency in that particular location.

Step 7: Hire The Right People

Recruiting the right people is all about understanding the qualities of individuals and asking them the right questions during the screening process. Remember your reputation depends on how good or bad the employees perform, so never ignore this aspect.

Make sure to look for these qualities:-

  •   Their attitude towards colleagues and work.
  •   Their ambitions and goals
  •   Their problem-solving skills
  •   Their communication skills
  •   How presentable they are
  •   Their work history
  •   Their dependability
  •   Their ideas and thoughts

You can recruit your employees through traditional methods like Linked In, referrals, job postings, or try new techniques depending on your niche.

Step 8: Get Proper Insurance

We’re no experts to educate you on insurance, but one thing can’t be denied, insurance is extremely important for temporary staffing agencies. Consult an insurance agent who understands all of these policies and can guide you. Generally, the most common policies are:-

  •   Liability insurance
  •   Business owners policy
  •   Employee theft and crime coverage
  •   Key employee insurance
  •   Umbrella policies
  •   Property coverage
  •   Commercial general liability insurance
  •   Worker’s compensation

Depending on the niche, you will need some or all of the insurance policies.

Step 9: Build A Website

After giving your business a name and registering your domain. Now it’s time to build a great website for your company. Create your website so that the user can get a clear idea of what are your services while they navigate through your site.

Having a well-designed website can give you a competitive edge over the competitors. You can also look up to already successful players in the business for reference. Here’s one such staffing agency you can take inspiration from:-

Award-Winning National Staffing Agency, Executive Search Firm and Temp Agency


Step 10: Set Up An Accounting Department

Maintaining proper records of all financial transactions in a systematic manner will greatly help your business in more than one way. You will find it helpful in knowing the profitability of your business, there will be more transparency and trust among business partners, and you’ll find it helpful in filling annual taxes.

You can hire an agency for this or devote a department of accountancy in your own firm to do the job for you.

Step 11: Open A Bank Account Dedicated To Your Business

You need to understand that your business is a different aspect of your life. And for you to strike a balance between your personal and professional life, the separation between the two is essential. Moreover, merging your personal bank account with your business activities will lead you to trouble.

The consequences can be disastrous. For example, if you get sued, all your personal assets such as your car, home, and other valuables will be at risk. Additionally, having a separate business bank account makes the accounting process much more convenient.

Tip: There are many banks that offer benefits to new entrepreneurs, so do your research and open your account in the right bank.

Step 12: Start Marketing Your Business

Finding and recruiting talented individuals is tough but what’s even harder is finding customers. Still, if you target a niche industry while you’re starting your business from the scratch, the chances of you getting clients increases exponentially.

You should ask yourself some questions like why should someone work with you instead of your competitors? What are your strengths? And once you have figured out the answers, then only start looking for clients.

You can advertise your firm on the following platforms and get clients:-

  •   Via Social media
  •   Through print media (Newspaper)
  •   Word of mouth
  •   Cold calling
  •   Networking

Be creative while marketing and always have a creative value proposition that sets you apart from the rest of the competition. Form a marketing plan and try ways in which you can execute it effectively.

Final Thoughts

There are many temporary staffing agencies and for you to stand apart from the competition, you must find a way that differentiates your firm from the rest.

Having said that, it’s your work that speaks for you. So in the end, everything comes down to how good your screening skills are and the quality of talent you are recruiting. You must have good communication skills and experience in sales and management. Enlisting talented individuals and placing them in reputed firms will also improve your retention rate in the future.


Thank You For Reading!

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