How to Start a Staffing Agency in UK USA (Business Plan)

Staffing Agency

Do you have these questions in your mind?

  • How to start a staffing agency?
  • What are the Pros and Cons of a staffing agency?
  • What are the types of staffing?
  • How does staffing agency make money?

 

In this article, you will find answers to all your questions. So grab a cup of coffee and let’s get started.

Table of Contents

What is a Staffing Agency?

With a Global Estimated value of over 650 billion U.S. dollars, the Staffing Agency industry is one of the most booming and trending industries in the world right now. 

Businesses take the help of staffing agencies for the purpose of recruiting and selecting suitable candidates for their business. It also helps people looking for a job by assisting them to connect with a different company in their field. 

A staffing agency’s main objective is to fulfill the hiring requirements of businesses and match job candidates with requests.

 

TIP: The best way to kickstart your Staffing Agency business is to network and make connections to different businesses. It’s an essential skill in this industry.

It would help if you had an open and curious mindset during a conversation. You make better networks when you ask genuine questions and share authentic stories about yourself.

Staffing Agency

Is owning a Staffing Agency right for me?

Here are some facts to consider when deciding if this business is meant for you:

The Pros of a Staffing Agency
  • Flexibility
  • Scalable
  • Meaningful business connections
  • High customer retention rates
  • High margins
  • Pick & choose the clients you work with
  • Control of workload
  • Unlimited income potential
  • Amazing perks and discounts
  • Greater Income Potential
  • You establish yourself as an expert
  • Can build a solid foundation of clients
 
The Cons of a Staffing Agency
  • High employee turnover
  • High overhead expenses
  • Time commitment
  • Difficult to build trust with your customer
  • Impatient customers
  • Learning Curve
  • Answering Phones
  • Takes time to see results & make money
  • More challenging to earn passive income

How much investment do you need for your Staffing Agency?

You can start a Staffing Agency with a small capital, with the main costs being things like obtaining licenses and purchasing other stuff like furniture and staff.

A Staffing Agency startup cost can be between $3K to $250K. 

Your startup costs may differ as per the choice of your business model.

The types of costs you will have to take into account are:

  • Office space/ rent
  • Equipment and supplies
  • Insurance
  • Legal set-up expenses (entity foundation, contracts, etc.)
  • Website development and set-up
  • Software such as payroll, HR, training, etc.
  • Employee and freelancer costs

How can a Staffing Agency Help Businesses?

1. Reduce overhead and overtime pay

2. Fills the need for short-term staff

3. Saves time on training, time, and reduces hiring risks

4. Handles onboarding and payroll

5. Industry market knowledge

6. The ability to try out an employee before extending a full-time offer

Staffing Agency

How much does a Staffing Agency make?

In general, a Staffing Agency makes money by charging fees to clients for the services they provide. 

 

They typically charge 25% to 100% of the hired employee’s wages. In addition, the three Main Ways to Staffing agencies charge their recruitment fees.

 

1. Temporary worker fees

They fall under the responsibility of the recruitment agency, meaning the agency that pays the candidate. 

 

2. Temp-to-perm fees

If temp workers employed by the agency want to take on a temp worker full-time, the agency is entitled to charge a transfer fee. 

 

3. Permanent placement fees

Fees for permanent hires tend to fall into one of two camps:

 

  • Contingency Recruitment Fees
    This is where an agency only gets paid once a candidate is accepted for the job.

  • Retained Recruitment Costs
    Rather than simply paying a fee upon a successful placement, a retainer fee is staggered throughout the process and essentially rewards an agency for its time. 

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Staffing Agency

Steps involved in a Staffing Agency

Staffing Procedures: The Steps Involved

 

  • Personnel requirements: 

The primary stage in staffing is to plan the manpower inventory that a corporation needs.

  • Recruitment:

After the announcement of the wants, the corporate invites and solicits applications in response to the invitations sent to the qualified applicants.

There are two types of the recruitment process:

1. Internal Recruitment

2. External Recruitment

  • Selection: 

This can be the personnel screening stage, in which the solicited applications are weeded out and qualified individuals are appointed.

Steps are taken within the order of the worker selection process:

1. Preliminary interviews

2. Application blanks

3. Written Exams

4. Job interviews

5. Examination of the potential employee’s health 

6. Letter of Appointment

  • Orientation and Placement: 

Orientation programs are to acquaint the hired candidates with their new workplace after the screening process.

  • Training and Development: 

Training is often provided by the activity’s nature and potential for expansion to assist them in growing and developing inside the corporate.

In general, there are two approaches to present training:

1. On the task training

2. Off-the-task training

  • Remuneration: 

Remuneration could be a form of financial incentive offered to employees in exchange for their efforts in work.

  • Evaluation of performance: 

A performance evaluation is conducted to keep track of or keep a record of the actions, attitudes, and opinions of employees toward their occupations.

  • Promotion and transfer: 

Promotion is described as a non-financial incentive within which the worker is moved from a lower position with fewer obligations to a better position with more responsibility. 

 

Top 10 online tools and resources for staffing agency business in USA & UK:

1. LinkedIn Recruiter
2. Glassdoor
3. Indeed
4. Upward.net
5. ZipRecruiter
6. The Ladders
7. Recruitee
8. Workable
9. SmartRecruiters
10. Breezy HR

Staffing Agency

Service List for a Staffing Agency

A staffing agency provides a wide range of services to job seekers and companies looking to hire employees. Some standard services provided by a staffing agency include:

 

  • Providing temporary employees to companies to cover.
  • Helping companies fill full-time, permanent positions.
  • Providing employees for a specific project or contract period.
  • Offer temporary employees an option to become permanent employees after a specified period.
  • Managing payroll and tax responsibilities for temporary and contract employees.
  • Outsourcing all or part of a company’s recruitment process to the staffing agency.
  • Assisting companies in finding and hiring top-level executives and managers.
  • Providing on-site staffing managers to handle employee relations, performance management, etc.
  • Evaluating job candidate’s skills and abilities through pre-employment testing.
  • Ensuring compliance with local, state, and federal laws and regulations and managing potential risks for the company and employees.
  • Career counselling and job search support for job seekers.
 

Services rate card in a Staffing Agency

A staffing agency provides temporary or permanent workers to clients. The rate card lists the agency’s charges for its services, including the cost of placing temporary and permanent workers and any additional fees or charges that they may apply.

 

The rate card may also include information on the types of workers the agency provides, such as skilled tradespeople, administrative staff, or technical specialists. It may also include information on the industries that the agency serves, such as healthcare, manufacturing, or finance.

 

Here is a list of information included on a staffing agency’s rate card:

 

  • Rates for temporary and permanent worker placements
  • Fees for additional services, such as background checks or drug testing
  • Types of workers that the agency can provide
  • Industries that the agency serves
  • Discounts for long-term orders or volume placements
  • Payment terms and conditions, including billing frequency and late payment fees
  • Any other charges or fees that may apply
Staffing Agency

Trends and Challenges in a Staffing Agency

Trends in a Staffing Agency:

1. Increased demand for temporary and contract workers

2. Growth of the gig economy

3. Use of technology

4. Focus on diversity and inclusion

5. Increased regulation 


Challenges in a Staffing Agency:

1. Shortages of Skill

2. High Competition

3. Lack of Speed

4. Transparency

5. Unrealistic Employer Expectations

Here are some ways you can market your Staffing Agency:

1. Be creative in marketing, display, and promotions.
2. Having an incredible work environment.
3. Having a good success rate in the recruitment department.
4. Researching and networking with upcoming brands needing your service.
5. Re-Branding yourself with a new and qualified set of employees every time.

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Staffing Agency

Licenses needed in a Staffing Agency

Some standard licenses that may require for a Staffing Agency include the following:

 

1. Business license: 

Most businesses, including staffing agencies, must obtain a license to operate legally. This may include a state business license and any local licenses or permits that may be required.

 

2. Professional or occupational licenses: 

Depending on the industry in which the staffing agency operates, it may be required to have specific professional or occupational licenses. For example, a staffing agency that provides healthcare workers may need a healthcare license.

 

3. Employment agency license: 

Some states may require staffing agencies to have an employment agency license to operate legally. This license is issued by the state’s department of labor or a similar agency.         

TIP: You can contact your local staffing agencies and look for internships to gain experience in recruiting and selection processes. This will provide you with an idea about the industry and help you in making further connections / clients.

Staffing Agency

Buy an existing business or franchise model or start from scratch

Buying a Staffing Agency franchise of a recognized brand is a good idea; however, it is expensive also. Franchisor will benefit you will all the existing brand image, customer loyalty, advertising, market research & strategies.

In addition, you will get guidance from the franchisor about training the workforce & ambiance of the premises.

List of some of the top staffing agency franchises in the United States:

  • Randstad
  • Adecco
  • Manpower
  • Robert Half
  • Aerotek
 
List of some of the top staffing agency franchises in the UK:
 
  • Hays Recruitment
  • Reed Specialist Recruitment
  • Michael Page International

Conclusion

A Staffing Agency is a complex and multifaceted process requiring great organization, attention to detail, and creativity. 

As a professional staffing agency, you should aim to help businesses in recruiting and select the right individuals needed for their businesses. Therefore, follow all the proper steps and consider all the suitable measures in the selection process.

It takes dedication and skills to become a good staffing agency. So, if you can handle all the responsibilities of employing the right people for their jobs! Just go for it!

Want to Save Time in your Business Launch?

  • How to Create a Business Plan
  • What is Market Research, USP, Niche & Positioning
  • How to find a suitable name for your business
  • How to create your brand image (Logo + Branding)
  • How to Register Your Business
  • How to Register for Taxes
  • How to get Licenses / Permits
  • How to Open a Business Bank Account
  • How to Get Business Insurance
  • Which Payment Processing Terminal (POS) to buy
  • How to get Funds for your Business
  • How to do Sales & Marketing – Offline & Online
  • Why have a Website / Blog / Social Media
  • How to build & train your Dream Team
  • How to provide Excellent Customer Service
  • Buying an Old Business Vs Franchisee Vs Own Brand from Scratch

Handpicked inspirational Youtube videos for you

Meet The Next Billion Dollar Start-Up That’s Revolutionizing Nurse Staffing | Forbes – YT Channel ‘Forbes’ 

What is a Staffing Agency? – YT Channel ‘Your Employment Solutions’ 

What Its Actually Like To Work As A Recruiter – YT Channel ‘WayUp’ 

A. 3 Main Ways to Staffing agency charge their recruitment fees

1. Temporary worker fees

2. Temp-to-perm fees

3. Permanent placement fees

Fees for permanent hires tend to fall into one of two camps:

  • Contingency Recruitment Fees
  • Retained Recruitment Costs 

A. You can start a Staffing Agency with a small capital, with the main costs being things like obtaining licenses and purchasing other things like furniture and staff.

A Staffing Agency startup cost can be between $3K to $250K.

A. The Pros of a Staffing Agency
  • Flexibility
  • Scalable
  • Meaningful business connections
  • High customer retention rates
  • High margins
  • Pick & choose the clients you work with
  • Control of workload
  • Unlimited income potential
  • Amazing perks and discounts
  • Greater Income Potential
  • You establish yourself as an expert
  • Can build a solid foundation of clients
The Cons of a Staffing Agency
  • High employee turnover
  • High overhead expenses
  • Time commitment
  • Difficult to build trust with your customer
  • Impatient customers
  • Learning Curve
  • Answering Phones
  • Takes time to see results & make money
  • More challenging to earn passive income

A. Trends in a Staffing Agency:

1. Increased demand for temporary and contract workers

2. Growth of the gig economy

3. Use of technology

4. Focus on diversity and inclusion

5. Increased regulation 

Challenges in a Staffing Agency:

1. Shortages of Skill

2. High Competition

3. Lack of Speed

4. Transparency

5. Unrealistic Employer Expectations

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