How to Start a Staffing Agency in 12 Steps [+All Necessary Tools]

Though the COVID pandemic has harmed each of us in several ways, for some, it opened new doors for their careers. During the pandemic, many left their 9-5 jobs and opted for better alternatives to get financial independence.

This created a great opportunity for starting a new business. We got you if you, too, are thinking of starting your staffing agency startup. We will elaborate on all the steps and procedures you need to follow to make your imagination your new reality.

In this article, we will briefly explain how to start a staffing agency. So, let’s dive into it.

What Is A Staffing Company?

Do you want to know what a staffing company is and what are the requirements to open a staffing agency? Well, a Staffing Agency/Employment Agency is a recruiting team that finds the best-fitted employees with the required skills per a certain organization’s demands.

The staffing agency does all the work, like posting for job availability, screening all the applications sent by job candidates, conducting interviews, and selecting the best candidates for organizations with temporary or permanent jobs.

Sometimes, a staffing agency has a close relationship with the HR or manager of an organization. They help by giving suggestions to the whole team on screening candidates.

12 Steps To Start A Staffing Agency

Here are the 12 steps to start a staffing agency.

Step 1: A Profound Research on Staffing Agency

First, you need to know the topic thoroughly based on which you will invest your life income, efforts, and a lot of time. You have to ensure that this is what you want to invest in. You can start by understanding the needs of job seekers—as you will connect them with companies.

Source: Glasdoor

Step 2: Choose Your Kind of Niche or Industry

Try to research and choose the kind of industry you want to be related to with your staffing agency. Considering an industry where you have prior experience can help you start your new staffing business quickly.

If you have experience recruiting at an IT firm, this specific niche will help you know what skills or qualities you are looking for in your candidates. This process gets easier than choosing a place you are entirely unaware of. There are plenty of other niches that you can explore (and it also matters what you have experience in): fashion, marketing, market research, e-commerce, education, health. The more you focus on one niche, the better your services will be.

Step 3: Evaluate Your Budget First

Before choosing a prime location for your office set-up, or buying other stuff, first you must check your budget. Sit down and evaluate your budget to get a rough idea of how much money you need to carry out your daily operations. You can start with this article from Indeed.

When getting into the business world, you must first ensure that your business plan will give you more profit than the amount you spend on it. Estimate your cash flow and plan your expenses before purchasing stuff in a rush.

Listing some factors you need to keep in mind when projecting your cash flow:

• Office Set-Up: First check its location while setting up your office. Location plays a vital role here. If it’s near the main road or bypasses, it’s a bonus. You have to keep a fixed amount aside for the monthly rent cost if you rent your office and for electricity and other regular things.
• Technology: You need decent computers for your worker for more efficiency. Invest in good software that will train your workers according to the industry and keep them updated.  Good examples here include: SignalHire when it comes to real-time verified contact info of leads, Monday.com or Slack.com for daily management and messaging, Calendly for scheduling meetings with clients, Trello or Asana for project management, etc.
• Employee Salaries: Based on your employees’ skills and work spirit, you can calculate their salary depending on the size of your agency and workload. Remember, you must also make your employees happy to get your desired outputs.

Step 4: Give Your Agency a Catchy Name

You must develop a unique name for your staffing business that will be relevant and catchy. Coming up with a good name is one of the critical starting points for your business. Develop a business model that can be identified for your staffing business and the services you will be providing. You can come up with a catchy slogan, also. You can start with this article from Forbes (you can also research company naming guides that you find on the web).

Step 5: Develop a Marketing Strategy

You must make a strategic marketing plan to attract your target employees and new potential clients. After starting your Staffing business, you must promote it to those searching for staffing agencies. When it comes to the marketing plan, use this guide from Neil Patel to delve into key details.

You can start by making a user-friendly website where candidates can check out your new post or job vacancy updates. You can have portals for them to sign up and submit their CVs.

You may have few clients in your starting period, so you need to pinch them. You can take the initiative of sending companies your business profile and briefing them on your agenda and what’s special about your agency so that they will consider working with you.

We suggest a vital tool here, SignalHire, that can be used for recruiting purposes. Professionals and businesses use this tool from all around the world for their searches. You might already know that SignalHire provides valid personal and work emails and phone numbers.

If you have issues with your budget, you can reach out to some investors through the contact information provided by SignalHire by sending them drafts of your business plan. You can find some investors willing to invest in your startup.

Step 6: Get a License and Insurance

Once you are done with collecting funds and setting your business plan by finding a location for your office and all, make sure you have the correct business licenses and permits. Here, make sure you study the local laws of your country/state/region or hire a consultant for this matter—use this resource to find details on various states in the US. Have your insurance done for your business plan. Invest in insurance for your agency. We are no experts in this field, so contact an expert insurance agent quickly.

Source: Verak.in

Step 7: Hire Your Employees

Now, here comes the central part of your business. You need the right set of workers to make your vision come true. To get your staffing company moving, you need to hire qualified employees with the proper working mindset and skills required for your niche. You can use SignalHire to find real-time verified contact info when it comes to professionals.

While recruiting your employees, use ask a set of questions to verify if they will be able to work for your agenda. Do more questions until you are satisfied and know that they meet your criteria. Remember that your workforce will be essential to success, so invest time and effort into finding the right people.

Step 8: Protect Your Agency and Use The Necessary Tools

You must take strong security measures to protect your staffing company from external threats. In your business, you have to deal with confidential information and take steps to protect your clients’ and candidates’ information.

There are some small measures that you can easily consider:

• Invest in good software that will protect all your sensitive data and keep away from malware and viruses.
• Check your employees’ details thoroughly before recruiting them. It’s imperative to prevent information leakages of your business plan or agendas to your rival companies.
• You can make a separate business bank account.

There are some tools mentioned that we think you can check:

• Cyma payroll software solution. This tool is very flexible for volume payroll processing and is designed for its unique markets that process complex payrolls.
• Zoom.ai is an artificially intelligent assistant that can handle repetitive administrative tasks and reference checks.
• SignalHire. We already discussed the usefulness of this tool in this article. You can access valid and verified phone numbers and email ids of prospects, clients, and potential employees.

Step 9: Grow Your Employment Agency

Setting up tools and desks and hiring employees will not do; you need to grow your business. You can look to advertise your company in hoardings, or you can use social media to promote your business ideas.

Make a business account and post about your business plans and agendas. Tell in detail what unique work you bring to the table for the candidates and clients. Make it exciting and look worthy. Appoint content creators and social media account managers if needed. You can also do paid promotions. Have a LinkedIn account ready so clients and candidates can keep updated.

Step 10: Talk to Your Hiring Managers First

Before setting interviews with fresh candidates, you need to talk to the hiring managers and get to know the qualities and skills they are looking for in their employees.

What criteria must they fulfill to get the job, or must any specifications be checked during the interview? Ask ample questions to HR to get a brief knowledge of what kind of employees they are looking for. Your task will get easier while screening the job candidates.

Step 11: Make Sure You Understand How This Business Works

Understanding how such an agency makes money is, of course, one of the essential inquiries when starting one. The following information is necessary for you to know, unless you are providing staff out of the goodness of your own heart:

For staffing agency profit margins, there are various models. The way it works is that staffing firms “lease” workers to businesses by deducting a fee from their pay and charging the hiring firms a hiring fee as well.

The fee charged to both the employer and the employee varies depending on the location, the industry, and supply and demand. As a result, some industries in difficult-to-reach areas may have higher profit margins for staffing companies than an industry with fewer candidates but a more accessible location. Depending on the aforementioned things, the margins a hiring agency obtains may range from 30 to 70%.

Your price and profit margin are two of the most crucial factors to consider while figuring out how to launch a staffing agency. These being said, make sure you scale organically—reinvest your profits and continue to add clients to your portfolio as your company grows.

Step 12: Stand Out

There is minimal talk about doing things differently, but this is one of the most important aspects of becoming successful in this industry (and in any service industry, for that matter).

If you are just starting out, money might be an issue, so you might not be able to hire a market research team from the beginning. Therefore, spend time to understand your competitors and find your edge. What are their weak spots? Is it customer service? Is it long waiting times? Is it pricing? Is it their attitude? Is it their business process? Even offer to buy services from a competitor to understand what you can improve in your newly-formed company.

This is essential because you are in the business-to-business world, and you will get most of your clients based on recommendations. Deliver a fantastic experience and huge value, and aim to make your customers believe they got a deal for working with your company. Underpromise and overdeliver by finding something unique that you can offer.

Conclusion

If you have thought of starting a staffing agency startup, here’s your sign. After these brief discussions, the process of how to start an employment agency will be your cup of tea. Keep these points mentioned above to set up a successful staffing agency. And we all hope for a better future for your staffing company.