Connecting People to Jobs: 7 Proven Steps to Start a Temp Staffing Agency

Staffing agencies collectively rake in billions of dollars in fees every year. That’s especially true when labor markets are hungry to fill job listings which was certainly the case in 2019.

While the world is experiencing rough waters now, rest assured that employers routinely call on the help of staffing agencies to fill slots and that demand is sure to grow in the months ahead.

If you’re mulling over the prospect of starting a temp staffing agency of your own, know that in doing so, you’re giving yourself access to a massive opportunity to make serious money. You’re also giving yourself access to ample headaches if you don’t know what you’re doing.

To add clarity to the temp agency startup process, below, our team lays out a few integral steps you should plan on taking as you get started!

1. Understand What a Staffing Agency Does

This probably sounds like an obvious step, but believe us when we say that a lot of people with staffing agency ambitions don’t have a good beat on what agencies do. That lack of understanding can serve as a barrier to success.

Know that staffing agencies are organizations that lease temporary employees to employers. Most of those leased employees do turn-key work like clerical tasks. In some cases though, leased employees are highly specialized.

Employers like using leased employees because they don’t have to pay them benefits and don’t have to go through the headaches that come with formal hiring. Staffing agencies collect a monthly fee for each employee they lease.

2. Appreciate That Riches Are in the Niches

As the owner of a temp staffing agency, you don’t want to sell yourself as a company that fills roles for every industry. To find success in this line of business, you want to focus on a single industry to start and then slowly expand your scope if demand allows.

For example, your temp agency might be the premiere agency to fill clerical jobs in the film/TV industry.

By knowing your niche and selling it to prospects, you can expect to pop up on people’s radars first when they need the kind of help you specialize in providing.

3. Get Your Startup Expenses Sorted

There are a handful of expenses you’ll probably need to cover as you get your agency off the ground. For starters, there’s your office.

While offices seem to be going extinct, we’re confident most temps will want to meet you in person before trusting you to aid them in their job placement. In addition to your office lease, you’ll need to invest in computers, office supplies, legal services for contracts, explanations on PEO workers comp, and on other complicated topics.

Make a complete list of everything you’ll need to buy before you open your doors. Then, gain access to the cash required to make those investments.

4. Start With Cash in Your Pocket

After you invest in all your startup expenses, your business’s available cash may be bordering on empty. That’s not a good thing for two reasons.

For starters, you never know when an unexpected expense is going to crop up that you need to be able to cover. Second, when you start invoicing clients for their leased employees, most will have 30-days to pay you.

So, if you paid your temp $1000 for their services at the beginning of the month and then invoiced your client $1200 to cover that salary plus your fee, you wouldn’t see that $1200 for a month. Without any backup cash, you’d have to survive the month at negative $1000 which would be a feat.

5. Build Employee Sourcing Funnels

As a temp staffing agency, your product is people. Where are you going to source your product from?

That’s a question you’ll need to figure out before you open your doors.

Staffing agencies like sourcing clients via various means of targeted digital marketing (Facebook ads, PPC on Google, etc.). They also find a lot of success by hunting down people in person on college campuses, at trade schools, and near unemployment offices.

6. Network With Companies for Placement Opportunities

Having all of the people to lease in the world won’t net you an income if you don’t have anywhere to place them. That’s where networking comes in.

Seeing as how you have a niche, figure out which lines of business would most likely need temp positions filled within that niche and start making connections with them.

This can be done over LinkedIn, at bars/restaurants in business districts, and anywhere else you can think of. Get creative about your networking avenues and you’ll find that you’ll quickly start to pick up momentum.

7. Consider a Payroll Service

As we quickly illustrated in our fourth point about startup cash, having funds available can get tricky when you’re running staffing agencies. A way to wiggle out of tight spots is to engage the help of a payroll services provider/factoring company.

These companies will pay out invoices you’ve sent to clients immediately, less a small fee, so you can get cash in your pocket today rather than in a month.

You Now Know What It Takes to Start a Temp Staffing Agency

Our team has walked you through 7 key steps that go into starting a temp staffing agency. We hope that after having read through these tips, you feel confident in your ability to get organized and move towards your business ambitions.

If you still feel hazy on how to proceed, we welcome you to explore more guidance in our blog!