A staffing agency which is also known as a search, recruiting, or staffing firm or service — is an organization that matches companies and job candidates; they act as a liaison between companies that need workers and qualified job seekers.

Statistics have it that in the United States of America alone, there are about 11,710 registered and licensed staffing agencies responsible for employing about 236,392 people, and the industry rakes in a whooping sum of $22 billion annually.

The industry is projected to grow at about 4.1 percent between 2016 and 2021. The companies holding the largest market share in the Employment & Recruiting Agencies industry in the US include Randstad Holding NV and LinkedIn Corp.

Revenue for the Employment and Recruiting Agencies industry is expected to grow in 2021 due to improvements in the labor market. The industry was negatively affected by heightened unemployment levels in 2020, leading industry revenue to decline an estimated 15.6 percent that year.

Steps on How to Start a Staffing Agency With No Money

1. Conduct Market Research

The first step in the market research process for a staffing agency is to develop a market-based research question in line with your overall business goal and objective. In this regard, you should source information that will help you maximize your business, information that will help you structure, equip and operate your staffing agency with less stress, and that will also help you gain a fair share of the available market share in your city.

a. Who is the Target Market of Staffing Agency?
  • Job Applicants
  • Corporate Organizations
  • Hospitals
  • Hotels
  • Business Facilities
  • Households
b. Is Staffing Agency a Profitable Business?

Yes, a staffing agency is a profitable business and statistics show that the industry generates an average of $22 billion annually in the United States of America.

c. Are There Existing Niches in the Industry?

Yes. These are some of the niches within the employment and recruiting industry that an aspiring investor can choose from;

  • Permanent placement services
  • Executive search services
  • Temporary staffing services
  • Independent contractor placement services
d. Who are the Major Competitors?
  • Randstad Holding NV
  • LinkedIn Corp.
  • Adecco
  • Kelly Services
  • EmployBridge
  • PEAK Technical Staffing USA
  • Specialized Recruiting Group
  • Crawford Thomas Recruiting
  • F&C Executive Search and Recruiting
  • Accent Professional Recruiting
  • Staff America
  • I.M. Recruiters
  • i4 Search Group.
  • FirstLight Home Care.
  • Griswold Home Care.
  • BrightStar Care®
  • Express Employment Professionals.
  • Lead Staffing.
  • Interim HealthCare.
  • A Place at Home
e. Are There County or State Regulations or Zoning Laws for Staffing Agency?

No, there are no county or state regulations and zoning laws for staffing agencies, but players in this industry are expected to work with the existing regulations governing such business in the county or state where their staffing agency is domiciled.

f. Is There a Franchise for a Staffing Agency?

Yes, there are franchise opportunities for the staffing agency. Here are some of them;

  • i4 Search Group.
  • FirstLight Home Care.
  • Griswold Home Care.
  • BrightStar Care®
  • Express Employment Professionals.
  • Lead Staffing.
  • Interim HealthCare.
  • A Place at Home.
g. What Do You Need to Start a Staffing Agency?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • An Office Facility
  • Database of Applicants
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • Employees
  • Startup Capital
  1. Memorable Business Name ideas for Staffing Agency

  • Prime Rose® Staffing Agency Service, Inc.
  • Excel Professionals® Staffing Agency Services, LLC
  • White Collar® Staffing Agency Services, LLC
  • Blue Ribbon© Staffing Agency Services, Inc.
  • Kings Court® Staffing Agency, Inc.
  • Monica Granville™ Staffing Agency Services, Inc.
  • Theresa Brown® Staffing Agency Services, Inc.
  • Clear Whyte© Staffing Agency Services, Inc.
  • Click ‘A’ Clock® Staffing Agency Services, LLC
  • Fidel Dwayne© Staffing Agency Services, Inc.
  • Safe Hands© Employment Services, Inc.
  • Rolland Atkinson™ Staffing Agency Service, Inc.
  • The Deal® Staffing Agency Service, Inc.
  • Headway® Staffing Agency Service, Inc.
  • Hallmark® Staffing Agency Service, Inc.
  • Joan Valley® Staffing Agency Service, Inc.
  • Andrew Dickson and Co® Staffing Agency Service, Inc.
  • Spot On® Staffing Agency Service, Inc.
  • Victoria Modena® Staffing Agency Service, Inc.
  • Gray Notes® Staffing Agency Service, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Staffing Agency?

Even though there are several options when it comes to the business structure of a staffing agency, the one that most players in this line of business consider is LLC. It is common to consider LLC because providers want to protect themselves from lawsuits.

Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Staffing Agency?
  • General Business License
  • Zonal Permits (Applicable in some cities)
  • Signage Permit
d. What Type of Certification is Needed to Open a Staffing Agency?

These are some of the certifications you can work towards achieving if you want to open a staffing agency in the United States of America;

  • Certified Recruiting Specialist (CRS)
  • Recruitment Consultant Certification (RCC)
  • Physician Recruiting Consultant (PRC)
  • Certified Personnel Consultant (CPC)
e. What Documents are Needed to Open a Staffing Agency?

These are some of the basic legal documents you are expected to have if you want to legally run a staffing agency in the United States of America;

  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval
  • Certificate of Incorporation
  • Business License
  • Non – disclosure Agreement
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a staffing agency, you may not need to file for intellectual property protection, copyright, patent, or trademark. This is because staffing agencies do not require one except on rare occasions.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a 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 $10,000 to $100,000 and above.

b. What are the Costs Involved in Starting a Staffing Agency
  • The total fee for registering the business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
  • Marketing promotion expenses – $3,500, and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring a business consultant – $2,500.
  • Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – $2,400.
  • The cost for renting and furnishing an office facility – $25,000
  • Other start-up expenses including phone and utility deposits ($5,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $35,000
  • The cost for equipping the office (HR and recruiting software apps, computers/laptops, internet facility, telephone, fax machine, and office furniture (chairs, tables, and shelves): $25,000
  • The cost of launching a website: $600
  • Miscellaneous: $5,000
c. What Factors Determine the Cost of Opening a Staffing Agency?
  • The size of the staffing agency
  • The choice of location
  • The required licenses and permits
  • The cost of equipping and furnishing the office
  • The cost of hiring and paying a business consultant and attorney
  • The cost for branding, promotion, and marketing
  • The cost for the purchase of office equipment and furniture
  • The cost for insurance
  • The cost for registering the business
  • Cost of recruiting and training your staff
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

No, you don’t need to build a facility for your recruitment agency. As a matter of fact, you can operate from a shared office space.

e. What are the Ongoing Expenses of a Staffing Agency?
  • Office supplies.
  • Utility bills – (internet subscriptions, phone bills, signage and software renewal fees et al)
  • Salaries of employees
f. What is the Average Salary of Your Staff?
  • Chief Executive Officer/Lead Consultant – $68,000 Per Year
  • Recruitment Specialist – $40,000 Per Year
  • Training and Development Executive – $40,000 Per Year
  • Legal Secretary – $40,000 Per Year
  • Human Resources and Admin Manager – $42,000 Per Year
  • Business Developer (Marketing and Sales Executive) – $28,000 Per Year
  • Accountant – $32,000 Per Year
  • Customer Service Executive – $28,000 Per Year
  • Front Desk Officer – $26,800 Per Year
g. How Do You Get Funding to Start a Staffing Agency
  • Raise money from personal savings and sale of personal stocks and properties
  • Raise money from investors and business partners
  • Sell shares to interested investors
  • Apply for a loan from your bank/banks
  • Apply for business grants and seed funding from the government, donor organizations, and angel investors
  • Source for soft loans from your family members and your friends.
  1. Write a Business Plan

a. Executive Summary

Brick House Staffing and Training Company, LCC is a Human Resource firm cum staffing agency that will be located in New York City, New York. The company will operate as a standard human resources consulting firm with bias in recruitment and trainings.

b. Products and Service
  • Recruitment and Training Consulting
  • Staffing for the IT industry
  • Staffing for the Oil and Gas Industry
  • Staffing for the Health Sector (Nurses, Doctors et al)
  • Staffing for the Banking, Insurance and the Financial Sector
  • Recruitment, Human Resource, and Capital Development Consulting
  • Highly Skilled Staffing Consulting
  • Unskilled Staffing (Maid supply, Nannies, Gardeners, Security Guards and Drivers et al)
  • Permanent Staffing Consulting
  • Temporary/Contract Staffing
c. Mission Statement

Our mission is to provide professional and trusted staffing and training services that will assist businesses and non-profit organizations in operating sustainably.

Vision Statement

Our vision is to become the number one staffing agency in the United States of America.

d. Goals and Objectives

The goals and objectives of the staffing agency is to help businesses hire great employees.

e. Organizational Structure
  • Chief Executive Officer /Lead Consultant
  • Recruitment Specialist
  • Training and Development Executive
  • Legal Secretary
  • Admin and HR Manager
  • Business Developer (Marketing and Sales Executive
  • Accountant
  • Customer Service Executive
  • Front Desk Officer

Marketing Plan

a. SWOT Analysis
Strength:

Our core strength lies in the power of our team; our workforce. We have a team that are considered experts in the industry, a team with excellent qualifications and experience in recruiting and training.

Weakness:

As a new business consulting firm, it might take some time for our organization to break into the market; that is perhaps our major weakness.

Opportunities:

No doubt, the opportunities in the consulting industry are quite massive because, in the United States, there are vast employment opportunities, and of course there are people who are ready to fill up those positions.

Threat:

One of the threats that is likely going to confront us is unfavorable government policies, downturn in the economy, and perhaps the emergence of new staffing agencies (competitors) within the same location where our staffing agency is located.

b. How Do Staffing Agencies Make Money?

Staffing agencies make money by offering the following services;

  • Recruitment and Training Consulting
  • Staffing for the IT industry
  • Staffing for the Oil and Gas Industry
  • Staffing for the Health Sector (Nurses, Doctors et al)
  • Staffing for the Banking, Insurance and the Financial Sector
  • Recruitment, Human Resource, and Capital Development Consulting
  • Highly Skilled Staffing Consulting
  • Unskilled Staffing (Maid supply, Nannies, Gardeners, Security Guards and Drivers et al)
  • Permanent Staffing Consulting
  • Temporary/Contract Staffing
c. Payment Options
  • Payment via bank transfer
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
  • Payment via bank draft
d. Sales & Advertising Strategies
  • Introduce your staffing agency by sending introductory letters alongside your brochure to corporate organizations, hospitals, businesses, and key stakeholders within and outside the location where your staffing agency is located
  • Advertise your staffing agency in community-based newspapers, local TV and radio stations
  • List your staffing agency on online directories and yellow page ads (local directories)
  • Leverage on the internet to promote your staffing agency
  • Attend recruitment/HR expos, seminars, and business fairs et al
  • Engage in direct marketing and sales
  • Encourage the use of word of mouth marketing (referrals)
  • Leverage on the internet to promote your business (when you blog regularly on key issues as it relates to your business, people who consider you an expert in the field)
  • Join local chambers of commerce and industries around you with the main aim of networking and marketing your staffing services; you are likely going to get referrals from such networks.
  • Engage the services of marketing executives and business developers to carry out direct marketing for you.

Financial Projection

a. How Much Should You Charge for your Product/Service?

The standard recruiting fee for agencies is between 15 and 20 percent of the first-year salary for a permanent job the recruiter is filling. Some agencies may charge as much as 25 percent for hard-to-fill roles. Fees can vary significantly across industries, market conditions, and specialization of the position.

b. How Much Profit Do Staffing Agency Owners Make a Year?

Staffing agencies make a profit by paying employees less than what they charge their clients. Margins vary, but can range from 30 percent to 70 percent, depending on industry, supply, demand, and location.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the staffing agency
  • The niche idea or industry that the staffing agency recruits for
  • The location of the staffing agency is covering
  • The management style of the staffing agency
  • The business approach of the staffing agency
  • The advertising and marketing strategies adopted by the staffing agency.
  • The number of years the staffing agency is in business
d. What is the Profit Margin of a Staffing Agency?

The profit margin of a staffing agency is not fixed; to a large extent, it will depend on some factors that are unique to your location and the type of staffing agency. It can range from 30 to 70 percent depending on the occupancy rate of the staffing agency.

e. What is the Sales Forecast?

Below is the sales forecast of a staffing agency based on the location of the business and other factors as it relates to such startups in the United States;

  • First Fiscal Year (FY1): $250,000
  • Second Fiscal Year (FY2): $400,000
  • Third Fiscal Year (FY3): $550,000
  1. Set Up your Shop/Office

a. How Do You Choose a Perfect Location for a Staffing Agency?

If you are looking for a location for your staffing agency, ensure that it is located in the hub of business in your city, a place that is visible and easily accessible. You would not want to locate this type of business in the outskirts of town. Your clients should be able to locate your office with little or no difficulty. Applicants should also be able to locate your office when they come to submit their CVs, documents, or for background checks et al.

b. What State and City are Best to Open a Staffing Agency?
  • New York City, New York
  • Boston, Massachusetts
  • Las Vegas Nevada
  • Los Angeles, California
  • Chicago, Illinois
  • Miami Beach, Florida
  • Silver Spring, Maryland
  • Orlando, Florida
  • Houston, Texas
  • Dallas, Texas
c. What Equipment is Needed to Operate a Staffing Agency?

You will need the following start-up inventory and equipment; HR and recruiting software apps, computers/laptops, internet facility, telephone, fax machine, and office furniture (chairs, tables, and shelves.

  1. Hire Employees

When it comes to hiring employees for a standard staffing agency, you should make plans to hire a competent chief executive officer/lead consultant, recruitment specialist, training and development executive, legal secretary, HR manager, business developer (marketing and sales executive), accountant, customer service executive, and front desk officer.

  1. Launch the Business Proper

No staffing agency opens its door for business without first opening it officially. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.

The bottom line is that with a proper launching of the staffing agency, you will be able to officially inform people in your city that your staffing agency is open for business.

a. What Makes a Staffing Agency Successful?
  • Use CRM Software to Streamline your recruiting process.
  • Create a ‘follow-up’ system.
  • Optimize for mobile.
  • Share success stories.
  • Respond to client feedback on social media.
  • Collect client feedback.
  • Understand your client’s industry
  • Adopt efficient collaboration tools
  • Accepting and learning from feedback
  • Never giving up.
b. What Happens During a Typical Day at a Staffing Agency?
  • The staffing agency is open for the day’s work
  • The staff carry out their daily responsibility (conducting technical phone screens, resume reviewing, scheduling interviews, preparing candidates for interviews, collaborating with hiring managers, and extending offers)
  • The office is closed for the day.

Please note that staffing agencies have a robust CV bank so that whenever an organization demands employees from them, they can quickly produce qualified candidates without putting up any vacancy. Staffing agencies also prepare applicants to take on some job roles before the opening even surfaces; it puts them ahead of their competitors in the industry.

c. What Skills and Experience Do You Need to Build a Staffing Agency?
  • Excellent customer services skills
  • Good managerial and human development skills
  • Ability to train new hires
  • Ability to spot talents
  • Team-building & Interpersonal Skills.
  • Excellent communication and negotiation skills.
  • Organizational skills.
  • A strong understanding of the staffing agency industry
  • Ability to pay attention to detail
  • Good supervisory skills
  • Familiarity with all aspects of the staffing agency and employment industry
  • Experience in working as a staffing agency manager
  • Experience in managing people
  • Experience in business administration