How to Start a Staffing Agency

How to Start a Staffing Agency


How to Start a Staffing Agency

If you’re looking to start a staffing agency, you’ve come to the right place. Since we’re going to show you exactly how to do it.

We’ll start with key staffing agency industry fundamentals like how big the market is, what the key segments are, and how revenues and profits are generated.

Then we’ll discuss keys to not only starting a staffing agency, but succeeding in it!

Importantly the most important step in starting staffing agency is to complete your business plan. To help you out, you should download Growthink’s Ultimate Staffing Agency Business Plan Template here.

How Big is the Staffing Agency Industry?

According to IbisWorld, there are 41,461 staffing agencies in the U.S., that generated $151.2 billion in revenue last year. This represents an annual growth rate of 2.4% over the past 5 years.

What are the Key Segments of the Staffing Agency Industry?

The Staffing agency industry provides temporary staff to a range of sectors.The two largest segments of the staffing agency industry are Industrial staffing and Office, clerical and administrative staffing. The remaining key segments of the industry include:

  • Professional and managerial staffing
  • Healthcare staffing
  • Information technology staffing
  • Engineering and scientific staffing

What External Factors affect the Staffing Agency Industry?

A number of factors affect the performance of the staffing agency industry. These drivers include:

  • Number of temporary employees – An increase in the number of temporary employees is beneficial to industry operators because they receive greater demand from businesses for these types of staff.
    The number of temporary employees is expected to increase, presenting a potential opportunity for the industry.
  • National unemployment rate – As unemployment increases, the industry is less likely to be able to source temporary staff for companies, causing revenue to decline.
  • Corporate profit – Corporate profit refers to the profit earned by businesses across all industries. An increase in corporate profit will have a positive effect on demand for office staffing and temp agencies because clients will be more likely to invest in their workforce when they have funds available.
  • Demand from construction – Construction companies are a major market for temporary workers and represent an important source of industry demand. The construction sector is expected to improve in recent years.
  • Demand from professional, scientific and technical services – Professional service providers are one of this industry’s largest markets.

What are the Key Customer Segments in the Staffing Agency Industry?

At about 40%, the industrial segment is the largest customer segment for the industry, followed by retail and other service-related businesses. Other professional markets, healthcare and technology make up the remaining customer segments.

What are the Key Costs of the Staffing Agency Industry?

Wages – IBISWorld estimates that wages will account for 69.8% of industry revenue in the recent years, up from 63.6% in the past five years. Labor costs are also high for the permanent staff employed by operators due to the need to provide personal, face-to-face service to clients and job applicants

Other costs – As a labor-intensive service industry, temporary staffing has a very low capital intensity. Depreciation and Marketing costs are also low for temp agencies.

Total purchase costs, which primarily include purchases of standard office and desk equipment, account for an estimated 14.9% of industry revenue. Other industry expenses include insurance premiums, interest and traveling, accommodation and entertainment expenses.

If you’d like to quickly and easily complete your staffing agency business plan, download Growthink’s Ultimate Staffing Agency Business Plan Template and complete your staffing agency business plan and financial model in hours.

How To Promote Your Staffing Agency

How to Grow your Staffing Agency

What are the Keys to Launching a new Staffing Agency?

1. Determine What Type of Staffing Agency You Want to Open
It is important to know which staffing service you want to focus on, as there are different types of staffing services and industries. You can choose between temporary staffing, long-term staffing and/or term-to-perm staffing

2. Write Your Business Plan
A staffing agency business plan is crucial to your success. It is the essence of your business and a poor and unrealistic business plan will not earn you any profits. A good plan will also attract potential investors or banks for financing.

3. Inquire on Government Licenses
In order to start a staffing agency, you have to file all necessary state permits and licenses.

4. Raising Capital for Your Staffing Business
Apart from the money allotted for office location and equipment, you will also need extra capital to cover unexpected expenses in the case of overdue invoices from your clients who are scheduled to pay your applicants.

5. Drafting Contracts
Talk to a business lawyer who can help you draft contracts for employment seekers and companies who will hire your service so that there will be a clear agreement with regards to their rights and responsibilities.

6. Find a location
You need a professional atmosphere in which to test applicants, interview likely candidates, train employees and hold the occasional business meeting.As you scope out possible territory, you should consider all of the following: lease cost and terms, accessibility and client proximity

7. Marketing and Advertising
Traditional advertising can be effective, as long as you do it well. To produce an effective ad, emphasize the benefits your clients receive from using your staffing service. Traditional advertising tactics include: direct mail, online advertising, newspaper and magazine ads and online listings/directories.

If you’d like to quickly and easily complete your staffing agency business plan, download Growthink’s Ultimate Staffing Agency Business Plan Template and complete your staffing agency business plan and financial model in hours.

What Makes a Great Staffing Agency

How a Staffing Agency Works

How a staffing agency works infographic

What are the Typical Startup Costs for a new Staffing Agency?

The cost of starting a staffing agency is dependent upon size and a host of other factors.Start-up costs can range from $58,000 to $127,000, and you should have a suggested operating capital of between $80,000 to $135,000 in the bank.

How much do Staffing Agency operators make?

Staffing agency operators and its employees receive varied pay amounts based on the success of their company. According to Payscale, the national average salary for a Branch Manager of a staffing agency is $46,000.

How to Grow your Staffing Agency

Ideas to grow your recruitment agency infographic

Helpful Videos

How To Get The Clients For Your Recruiting & Staffing Agency Business

Staffing Industry Analysts: Staffing Trends for 2015 and Beyond

Recruitment Marketing – Automation In Your Marketing To Get Clients

Additional resources in the Staffing Agency Industry

For additional information on the staffing agency industry, consider these industry resources:


How to Finish Your Staffing Agency Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Staffing Agency Business Plan Template you can finish your plan in just 8 hours or less!

Click here to finish your business plan today.


OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how Growthink’s business plan consulting services can create your business plan for you.

Other Helpful Business Plan Articles & Templates