12 Essential Steps to Start a Staffing Agency in 2024

With the growing global economy and globalisation, business activities are increasing more than ever.

It is now easier than before to start a business and expand it with the help of the internet. But of course, with business activities at an all-time high, there is also an increased need for staff.

Finding reliable and credible employees is also a task that not all startups and giants specialise in staffing. Staffing agencies are needed here to fulfil the requirements of organisations so they can focus on their business goals instead of worrying about recruitment and hiring.

If you are considering starting a staffing agency, you are doing the right thing. It will not only solve the talent shortage issues and reduce unemployment but also earn you a fortune through commissions and service charges.

Starting a staffing agency is a business, too. Like any other business, you need to do your homework before kick-starting. This blog will guide you on how to start a staffing agency. You'll learn a total of 12 steps that lead to success.

12 Essential Steps to Start Your Successful Staffing Agency

With each passing year, the world is moving towards betterment with advanced technologies and better innovations. These steps will help you start and flourish your staffing agency in 2024.

1. Evaluate Your Capacity

Who are you; why do you want to start a staffing agency? Evaluate your specialization, education, knowledge, network, and background before doing anything. You need to see if you have it in you that a staffing agency takes to start or not. For example, if you are a civil engineer with zero knowledge of HR, you are a mismatch which calls for a great deal of homework. If you have a vast network, it can count as your resource. Be rich in resources like connections, knowledge, experience, mentors, and much more to begin.

2. Choose a Niche

What kind of staffing agency do you plan to open? There are many different scopes of agencies that help in headhunting, sending contract-based employees, and providing IT staff augmentation services. Moreover, see which industries you want to cater to that have employee shortages and job scarcity. For example, actuaries are very hard to find, with only 70,000 qualified actuaries in the world but in great demand. So, you might want to work as a staffing agency in the actuarial science industry. The niche selection depends on you. So, conduct thorough research before choosing any niche from the unsaturated ones.

3. Research as Much as You can

Research every aspect surrounding a staffing agency. It will include your competitors, need, labour market, and economy. Researching will give you sound knowledge about what you are getting yourself involved in. It will also set a direction for your next steps. For example, if you are looking for licenses, then your research will lead you to firms that will help you with legal advice.

4. Develop a Solid Business Plan

Developing a solid business plan is like mapping out a route for a road trip—it helps you figure out where you’re going and how you’ll get there. 

Start by sketching out your business model. Think about what your staffing agency will do, who your clients will be, and how you’ll stand out from the competition. 

Next, dive into the financial strategies. This part is all about the numbers. You'll need to plan how much money you'll need to start up and keep things running smoothly.

Don’t forget to really dig into your finances. Look at potential earnings, but also consider the costs—things like office space, software, and salaries. 

Lastly, imagine where you want your business to be in a few years and set some growth projections. These goals will guide your decisions and help keep your business on track. Think of your business plan as a roadmap that leads you to success, keeping you organised and focused as your agency grows.

5. Build a Strong Network

Building a strong network is like having a solid foundation for your staffing agency. Think of it as creating a support system where you connect with recruiters and other industry experts who can help you thrive.

These connections are invaluable; they can offer insights, share advice, and sometimes even send clients your way. Start by reaching out to people you already know in the industry and attend networking events whenever you can. 

Make it a point to stay in touch, perhaps by sharing industry news or meeting up for coffee. Remember, the stronger your network, the more support you'll have as you grow your business.

6. Setup Your Staffing Agency

Nowadays, the internet has become a prominent medium in the recruiting process. More than 90% of workers apply for jobs online. You need to set up an office or a portal if it is a virtual staffing agency. From selecting the right web-based software to hiring staff and connecting with clients and candidates, a digital guide can provide the roadmap you need to get started and succeed in today's competitive recruitment landscape.

7. Establish Legal Frameworks

Establishing legal frameworks is a crucial step when starting your staffing agency. Think of it as setting the groundwork to make sure everything you do is on the up and up. 

You'll need to register your business first—this is how the government recognises you as a legitimate entity. Then, there's licensing; depending on where you're located and the type of staffing services you offer, different licenses might be required. 

Compliance is another biggie. It covers everything from employment laws to worker's compensation. Making sure you're compliant not only keeps you out of trouble but also builds trust with your clients and employees. It's all about playing by the rules to create a smooth-running, reputable business.

8. Determine Your Service Charges and Terms and Conditions

After doing all the math, you need to set a monetary target that you need to achieve. By knowing your goal, you will be able to set a service fee which is usually around 20%-30% of a new hire's first-year salary. You also need to set appropriate terms and conditions so neither the candidate nor the client breaks the contract. For example, there is a risk of a candidate breaching a contract to avoid paying your commission. To avoid such problems, you can put conditions like a ban from your agency in such instances or an imprisonment term. You need to consult a lawyer to help you set a contract.

9. Setup a Website

A website will be the face of your business. Make sure to establish a user-friendly website for candidates and clients to easily connect with you and know more about your agency on your website. 

Only setting up a website is not necessary; the site should have strong security that allows users to share their information like login credentials or any payment details. To do so, the site owner should get SSL certificate and install it on the website that protects the information and ensures users about their data protection.

10. Invest in Technologies

A survey by Career Builder found that 67% of hiring managers believe that staffing companies must use the latest technology.

To flourish in 2024 and beyond, you need to invest heavily in technologies with time. But in the beginning, invest in software to find candidates and employers that require your services once such software is an applicant tracking system that will lead you to the candidates looking for jobs in your niche.

11. Implement Efficient Workforce Management

Implementing efficient workforce management is all about using the right tools to keep things smooth and organised. Think of it as having a digital assistant that helps you manage your staff and their job placements with ease. 

These tools can handle schedules, track hours, and even ensure everyone’s where they need to be, all from one platform. To carry out all these things smoothly best employ scheduling software available in the market.

It’s like having a command centre that helps you keep an eye on everything at once, ensuring that no detail slips through the cracks. This not only makes your life easier but also boosts the productivity of your team.

So, investing in comprehensive workforce management tools is a smart move for any staffing agency looking to streamline operations and keep everything running like clockwork.

12. Market Your Staffing Agency

A survey reported that marketing increased revenue by 38.4% for some companies. In this scenario, your staffing agency is the product that you should advertise. Market everywhere possible and allot a higher budget to marketing. People will come to you only when they know you, so this is essential.

Final Wrap-UP 

So, here we learn the steps that will help you to start a staffing agency. And yes starting a staffing agency is a promising venture, but it requires meticulous planning and execution.

So, whatever you have learned here is just theory, but executing this is as difficult as pulling the thread from a needle's eyes or threading a needle.

Don't forget, you're not just building a business; you're helping people find their dream jobs and companies find their perfect employees. That's a pretty amazing thing!

So, focus on building trust and delivering quality service. 

With persistence and a clear vision, your agency can grow into a thriving business that helps both clients and job seekers achieve their goals.

With dedication, hard work, and a customer-centric approach, you can successfully navigate the competitive landscape of the staffing industry.

The key is to stay organised, be patient, and always keep learning. The staffing industry is always evolving, and being adaptable will help you stay ahead of the game.

So, are you ready to dive in and start your staffing agency journey? The world of work is waiting for you. Good luck, and have fun!