Starting your own temp staffing agency is a great choice to start your entrepreneur journey. It is not necessary to have a Human Resources degree to promote work opportunities in your community. It is enough to be a people person with experience in a certain industry.
And if you have some decent management skills as well, nothing can stop you from starting your own business. Having some financial resources can help you accelerate the progress, but you can easily start your own staffing agency on a shoestring budget.
There are more and more emerging industries that demand qualified professionals on an ad-hoc basis. Hospitality, property management, event staffing, healthcare, etc. The standard formal recruiting processes are no longer suitable for getting people to work on contingent schedules.
If you thoroughly know your industry, you can cater a much better service than any large staffing firm would. Understanding staffing industry and the specific skills needed for the niche is a major strength for recruiters when communicating with both workers and employers.
The best job agency is NOT the large job agency with a full office space, huge contact list and a large number of clients. Talent quality is always better than quantity. Industry insiders are easily able to identify qualified candidates and assess their skills. And this makes them the best staffing agents.
How to start a temp agency
If you are now looking to launch a full staffing company or agency, start with some market research and getting to know the field. Participate in community events, or host a Facebook group of your own. Get to know as many jobseekers in your field as possible. Network with the companies who may be interested in a convenient staffing service.
And certainly don’t forget that good competition research is the key to success. How are jobseekers currently finding work? What could you improve for them?
Most staffing companies are too busy with the administrative tasks of their day to day to understand the competitive landscape. If you take some time to understand where they’re dropping the ball, you can easily build a service that attracts clients.
How can I be profitable with a temp staffing agency?
A profitable business is one that generates more income than it spends on business expenses and costs. If you’re starting out with no money, it’s obvious advice to keep all expenses to a minimum. But it’s not possible to earn money without spending money, so earning enough to keep you in the positives is key.
And the best way to earn that money is to build a really good service business – one that your clients and workers absolutely love to collaborate with.
Choose an area you know well
Focus on a specific industry or job category. Becoming an expert in a target market or niche can help you attract clients seeking specialized talent, allowing you to charge premium rates.
You should choose something you know thoroughly well. When you understand the industry you’re serving, potential clients will have more confidence in your ability to provide them with suitable temporary staff who possess the required skills and expertise. Familiarity with the niche also helps you better match candidates to client needs. You can accurately assess their qualifications and make sure they are suitable to fulfill the work.
Both clients and candidates appreciate working with someone who understands the nuances, terminology, and challenges. If you have a solid understanding of the work, the communication errors are less likely to happen, you can aanticipate and address common challenges, providing proactive solutions that add value to your services.
Maybe you’ve worked in an industry as an employee or an independent contractor? Here are some ideas for areas where temp staff is always needed:
- Healthcare professionals – nurses, medical assistants, or therapists for hospitals, clinics, and healthcare facilities.
- Event staff – event planners, coordinators, ushers, and catering personnel for concerts, conferences, weddings, and other events.
- Cleaning personnel, janitors, housekeepers, and custodians for residential, commercial, and industrial spaces.
- Landscapers, gardeners, outdoor maintenance workers, and groundskeepers for businesses and homeowners looking to enhance their outdoor spaces.
- Construction workers, contractors, project managers, and tradespeople for construction companies.
- Retail associates, waitstaff, bartenders, and hotel personnel for the retail and hospitality sectors.
- Educators, tutors, teaching assistants, and substitute teachers for schools and educational institutions.
- Caregivers, companions, and support staff for elderly care and assisted living facilities.
- Administrative assistants, receptionists, data entry personnel, and office managers for various industries.
Solve a real problem for your clients
Research gives you insights on what could be better, faster or easier with your staffing agency vs. without your services.
For example, the most common complaint among clients who rely on temporary staffing agencies is… well, reliability! When a worker is not motivated, they are unlikely to prioritize work. These workers may come in late or not show up at all.
Taking care of this kind of hassles on behalf of your client removes a major burden off their shoulders. You can set up motivating team dynamics to upgrade temp reliability, and remain available to re-source additional workers last moment.
The second major issue with temp agencies is often the quality of work. It’s a known prejudice that temp agency labor is unqualified and low quality. Prove them wrong, and dispatch well-trained and well-equipped workers who put an effort in their performance. This isn’t easy, but can be achieved with smart recruitment, comprehensive training, and some focused people management.
Be a stellar employer in your industry
There are three core aspects that guarantee a more reliable and committed temp workforce. If you’re able to nail all of these, you’ll have a major competitive advantage before the large staffing firms that are servicing multiple industries. They are usually unable to offer a motivating level of attention towards their workers.
Sense of belonging: Make them feel like an integral part of a community, even if they work occasional short periods. Actively fight for their fees and benefits, so that they are treated equally at their place of work. When they identify you as their leader and protector (instead of just a side business owner that earns a profit from their work), they are likely to put an extra effort towards each gig you bring their way.
Skills development: Offer opportunities for skill enhancement or training to enhance their value and employability. You should focus on industry-specific training that is a motivating opportunity to upgrade skills and hourly fees, but don’t overlook basic skills such as communication, health and safety, or conflict resolution. If you’re able to provide these at quality level, and not as a meaningless lecture, they can be a major upgrade for both your staff and the client experience you are able to provide.
Reliable payroll: Ensure timely and accurate payment to temp workers. If a client is late with their invoice, don’t make your temps suffer. Figure out ways to cover payroll before the fees roll in. It only takes a single story from a frustrated worker who didn’t get paid on time to ruin your reputation as an employer!
Actually caring for your team of workers can truly distinguish your staffing agency. Adding a personal touch and fostering peer support is uncommon in our industry, but it shouldn’t be. Brainstorm ideas to elevate your staff experience – you could even implement a 360-degree feedback to evaluate your temporary staff’s performance.
Level up with administrative expertise
Because you’re contracting people to work, make sure you know your local labour and business laws and requirements. These vary according to location and may require some time to process. So it’s better to start with these details as soon as you decide on the name of your agency.
You may want to hire some help for drafting documents that are specific to your business or legal entity. But as most agencies tend to be registered as private limited companies like LLC / LTD / GmbH, depending on where you’re registered – then for general advice you can look for free consultations and support from your local officials.
Most common requirements to consider when starting your own staffing agency:
- Licenses and permits: do you require any paperwork to operate as a staffing agency in your chosen industry
- Worker classification: it is important that you properly classifying workers as employees or independent contractors based on legal criteria.
- Wages and benefits: depending on the worker classification, you may need to consder minimum wage laws, overtime regulations, and provide appropriate benefits.
- Worker contracts: lawful employment contracts outline important terms and conditions, but are still clear and easy to read and understand.
- Client paperwork: how much do you need to know about your client to trust them with your staff; and what is the commission structure to keep you in the business?
- Tax regulations: how to properly handle tax withholding, reporting, and payments as a lawful business
- Record Keeping: what are the local demands for keeping accurate records of employee hours, wages, and other relevant information.
- Safety and insurance: what is the strategy to cover workplace injuries or accidents.
- Anti-discrimination : as a recruiter, how to avoid discrimination based on factors like race, gender, and religion
- Privacy : what is needed for respecting employee privacy rights and adhering to data protection regulations when handling their information.
Obsess a little with your business process design
Spend a lot of time on designing and thinking about your own business plan and processes. It is much easier to run a small business, when your processes are reasonable and easy to use.
Map out client and worker journeys from first contact to post-staffing. Write down the steps – what are the touchpoints and procedures you should remember to do. Use a CRM tool to organize your business activities and a staffing app to keep track of the staff. This way you can make sure that every one of your clients receives the same quality of service.
For example – the first step in getting quality workforce to join your agency is designing good recruitment listings. A good ad is an honest explanation about what the job actually entails. Excellent candidates can pass on your advertisement if they cannot imagine themselves doing the tasks. So be really clear! Instead of requiring “communication skills” you may explain that the job requires picking up the phone and making cold calls.
When your you start a staffing agency that facilitates short term work, you will want to make all standard processes as automatic as possible. Recruiting for a single day should not take you the same time and resources as sourcing a full-time employment opportunity. Consider pooling your talent network into an online community where they can also help each other navigate your processes.
You can certainly start with the old-fashioned spreadsheet of contacts. But should your business grow – take a look at this article listing many suitable apps you can use for your agency. But no matter which digital tool you choose, remember that it will only work if your processes make sense. So spend some time on refining the how-what-and-when is happening when you sign a new client, or onboard a new candidate.
How we can help
Starting a staffing agency without a budget requires dedication, perseverance, and resourcefulness. Leveraging free resources can also help you establish a foundation for future growth. Zelos Team Management is a very simple staffing app that is perfect for distributing short-term placements in your internal community.
Zelos is free to use at low volumes, and you can easily create an account and start your project right away.