Temporary Staffing Agency - How exactly to Start

The temporary staffing industry continues to expand, with yearly double-digit growth being commonplace. Companies think it is convenient and cost-effective to work with a temporary staffing agency to satisfy unforeseen demand, fill short-term vacancies, and help with changing workloads because of restructuring or mergers. Additionally, employers are enticed by the idea of "test driving" new employees to reduce risk and ensure a good match for permanent positions.

Many a job seeker has reaped great rewards from temporary staffing. Skilled but yet-inexperienced workers are able to get a foot in the door at prestigious companies, where a weak resume could have made it very difficult to be considered. Similarly, "drifters" (those who tend to rapidly drift from job to job) could be suffering from an overly-long resume. Temporary staffing services can be ideal for drifters, because they get the chance to focus on short-term projects and move on minus the negative repercussions. Retirees and college students are also very common candidates. A retired nurse could find enjoyment and further income from the temporary medical staffing firm. A computer science major can gain valuable experience dealing with a technical agency.

Only a small number of personnel must handle recruiting and clientele. Even the largest international firms tend to function with small, mostly-independent branch offices serving specific regions. This modular structure means it really is quite possible for a one-office temporary staffing agency to compete effectively with established firms.

Overall, the triple-benefit to clients, associates, and entrepreneurs has contributed to the phenomenal growth of the temporary staffing industry. Due to these advantages, it will remain an integral part of the employment process through good times and bad.

Start Up Costs and Financing Sources:

$5,000 to $25,000

The startup and operating costs of a temporary staffing agency are lower than many other businesses. The essential requirements are a small office with the typical supplies, some type of computer system with general accounting software and database software for organizing contracts, and individuals skills to utilize clientele and associates. It would not be impossible to start a temporary staffing agency on a shoestring budget of several thousand dollars.

The biggest business expense is payroll. It's quite common for associates to be paid by the agency before the agency is paid by your client. An account should be maintained with sufficient funds to cover payroll costs until bills are paid by the clients.

It is difficult - but not impossible - to obtain help from venture capitalists in covering portion of the costs of establishing a temporary staffing agency. A well-researched, forward-looking business plan is vital.

Pricing Guidelines for Service:

Associates are paid per hour, and the agency covers its costs by charging a premium to the total amount billed to your client. The exact quantity of the premium differs from case to case and may change from 5% to 50% or more. Some associates are prepared to work for less and some clients are willing to pay more, which when properly matched can result in very decent profits for the temporary staffing agency. The contract usually spells out a set fee to be paid to the agency when litigant decides to permanently hire an associate.

Marketing and advertising:

A competitive hurdle for small startups is that larger agencies curently have established reputations and brand recognition. This is really a minor obstacle due to the localized nature of the business enterprise. It is not necessary to wage a national marketing war to get exposure for a new agency. A cheap and well-directed advertising campaign can quickly build a valuable reputation within the local operating region of the startup.

Essential Equipment:

An office (perhaps a house office) should be built with the typical office supplies and at the very least two telephone lines.

A minumum of one computer system with accounting software and a database for monitoring projects is mandatory. A printer is used for printing invoices and job listings, and a high-speed Internet connection connects the agency with online job search sites.

Many temporary staffing services have computers with tutorial software open to help associates to teach their keyboarding and basic office software skills. These computers are also used to test the abilities of applicants.

Income Potential:

Many billions of dollars are spent on temporary staffing services each year. A small, single-office agency can earn profits in the tens of thousands of dollars. The large, international firms rake in millions each year.

Target Market:

A temporary staffing agency is the middleman between two distinct markets: clients and associates.

It is usually not a difficult matter to reach a huge selection of applicants with simple help wanted advertisements. More focus will probably be placed on connecting with client companies and convincing them your services will help their businesses.

Certain industries seem more receptive to temporary staffing. Finance institutions and other office-centric companies are constantly seeking qualified office support staff. Factories frequently need labor for light industrial work, product assembly, and shipping and receiving tasks. Hospitals and clinics use temporary medical staffing to employ transcriptionists, certified nursing professionals, and other support staff. Increasingly, high-technology companies hire computer programmers, database specialists, and systems engineers on a temporary basis through agencies focusing on technical placements.

Tips for Success:

Develop a niche!

In larger markets, providers of temporary staffing services have found it useful to branch into niches such as temporary medical staffing, legal, financial, or technical fields. Embarca focused nature of the agencies allows recruiters to build a pool of highly-educated, trained, and experienced associates who are able to provide the best service to clients inside a particular industry.

A hospital executive would feel more comfortable contracting nurses from an agency dedicated to temporary medical staffing than from the one-stop-shop that also places welders, janitors, and filing clerks. This confidence also helps associates to command better wages than they could otherwise receive through a general-service temporary staffing agency.

Automate!

Much of the task of running a temporary staffing agency could be automated by software applications. Well-designed database software can ease the process of matching qualified associates with appropriate job openings. Accounting operations can be quite heavily automated (but working closely with an excellent accountant continues to be advised). With one of these tools set up, just two major tasks remain: finding clients and finding associates.

Use your own services!

Because the business grows, it will become essential to add staff to take care of the recruitment and marketing. Which should never be difficult, since typically dozens or hundreds of qualified candidates are already in contact with the agency!

Training, Skills or Experience Needed:

Recruiters are at an edge with a background in recruiting, business management, and marketing. A degree is not needed for starting the business, however the knowledge gained through a business management program is immensely helpful. People skills are essential, and will be learned through experience and self study. Numerous books have been published, specifically addressing temporary staffing as a small business opportunity.