Steps to Start Your Own Temporary Staffing Agency

Understanding the Temporary Staffing Industry

Temporary Staffing Agency

If you’re planning to start a business in the staffing industry, you should know that it is one of the fastest-growing industries in the world. The temporary staffing industry has become increasingly popular due to its cost-effectiveness and flexibility, and it’s an excellent opportunity for entrepreneurs who want to enter the staffing industry. Temporary staffing agencies offer a flexible workforce that businesses can rely on when they need temporary staff, including seasonal work, sudden spikes in demand, and employee absences.

Starting a temporary staffing agency can be rewarding, but it takes planning, hard work, perseverance, and knowledge. Before starting your business, you need to understand the temporary staffing industry to make informed decisions, develop a solid business plan and avoid costly mistakes that could impede the success of your business. In this article, we’ll guide you on how to start a temporary staffing agency by providing you with valuable insights on the staffing industry.

What is a temporary staffing agency?

A temporary staffing agency is a business that provides temporary workers to clients on a short-term or contract basis. The agency recruits, screens, and hires temporary employees for its clients. They are responsible for payroll, employment taxes, and benefits for temporary staff. Temporary staffing agencies provide all types of staff, including administrative staff, healthcare staff, warehouse staff, and construction workers.

Size of the Temporary Staffing Market

The temporary staffing industry is a massive and growing industry, with a significant impact on the global economy. According to Staffing Industry Analysts, the global staffing industry is worth $498 billion, with temporary staffing accounting for 59% of the entire staffing industry. The US is the largest market for temporary staffing, accounting for over a third of the global market.

The temporary staffing industry has grown consistently over the last decade, and projections indicate that it will continue to grow. One of the primary drivers of this growth is the increasing demand for temporary workers from businesses that want to maintain their flexibility and agility in a rapidly changing economy.

Advantages of Starting a Temporary Staffing Agency

Starting a temporary staffing agency has many benefits. It can be an excellent business opportunity as the staffing industry continues to expand. Here are some of the advantages:

  • High demand: The demand for flexible staffing solutions is continuously growing, and this creates an expanding market for temporary staffing agencies.
  • Low Start-up costs: Starting a temporary staffing agency requires minimal start-up costs, making it affordable for first-time business owners.
  • High Profit Margin: The staffing industry can offer high-profit margins as the agency charges a commission based on the temporary worker’s salary or bill rate.
  • Scalability: A temporary staffing agency can be easily scaled to meet the growing demand for workers.
  • Flexibility: Owning a staffing agency provides flexibility in work and time management.

In conclusion, understanding the temporary staffing industry is crucial if you intend to start a temporary staffing agency. Knowing the size of the market, the advantages of starting a temporary staffing agency, and what it involves is essential for success. The temporary staffing industry is expected to remain valuable, and with hard work and adherence to best practices, a temporary staffing agency can contribute to meeting the demand for flexible staffing solutions.

Developing a Business Plan for Your Agency

Developing a Business Plan for Your Agency

Developing a solid business plan is crucial to the success of any temporary staffing agency. It serves as a roadmap to guide your agency’s growth and development. A comprehensive business plan should be well researched and detailed, highlighting your agency’s mission, objectives, services, target market, competition, pricing strategy, marketing plan, and financial projections. Here are some tips to help you develop a winning business plan for your agency:

1. Define Your Agency’s Mission and Objectives

Your mission statement should clearly define your agency’s core values and the services it aims to provide. Your objectives should complement your mission statement by outlining specific goals that your agency aims to achieve over time. Your mission statement and objectives should be concise and easy to understand, as they will be the driving force behind your agency’s success.

2. Identify Your Target Market

Before starting a temporary staffing agency, it is essential to identify your target market. This will help you better understand the needs of your potential clients and tailor your services to meet their needs. Consider the industry sectors you wish to serve and the types of positions you will be staffing. Determine the geographic area your agency will cover and research the competition in the region. By identifying your target market and competition, you can develop a marketing strategy that sets your agency apart from others.

When identifying your target market, don’t forget about the workers who will be on your agency’s roster. It’s critical to develop relationships with workers in the industries you aim to serve so that you can have a ready pool of talent to draw from when jobs become available. Know your target market and its needs so that you are ready to provide superior temporary staffing services.

3. Develop a Robust Pricing Strategy

As a temporary staffing agency, your pricing strategy will be the foundation of your revenue stream. Your pricing must be competitive and reflective of the value you offer your clients. Consider the pricing strategy that will work best for your business. Will you charge a fixed rate or commission? Remember that there are pros and cons to each method of pricing. Take the time to research, budget and forecast your revenue to ensure that your pricing model is structured optimally.

4. Create a Comprehensive Marketing Plan

As with any business, marketing is essential to the success of your temporary staffing agency. Create a comprehensive marketing plan that highlights your services, target market, and any unique selling points that set your agency apart from the competition. Make use of social media, community postings, and industry-specific forums to get the word out. Build relationships with key industry professionals and potential clients to ensure that your agency is top of mind when they need temporary staffing services.

5. Develop Financial Projections

Financial projections will help you understand your agency’s cash flow needs, expenses, and revenue requirements. Take into account your start-up costs, including any legal expenses, staff, office rent, and technology. Factor in your ongoing expenses, such as marketing, insurance, training, and payroll. Develop revenue projections based on your pricing model and target market. Consider multiple scenarios, such as low, medium, or high growth, and how they might impact your agency’s financial position.

Developing a business plan for your temporary staffing agency requires a significant amount of research, planning and attention to detail. Follow these tips and be patient, and you will be well on your way to developing a successful agency that clients and talent can rely on.

Obtaining Permits and Licenses to Operate

Permits and Licenses to Operate

Starting a temporary staffing agency requires a lot more than just a business plan and some investment. One of the significant aspects of starting a temporary staffing agency is to obtain permits and licenses to operate. This is an essential part of launching a staffing agency since it will make sure your company complies with all requisite legislation and regulations.

1. Business Registration and Licenses

Before you begin operating your temporary staffing agency, you will need to register it with the appropriate government agencies. This entails obtaining a business permit, licenses, and federal taxation ID number. You may want to get in touch with your state’s small business administration to gain an understanding of the registration process.

2. Insurances and Bonds

You may also need insurance, bonds, and other financial arrangements. Insurance is a crucial aspect of any staffing agency. Nevertheless, before you purchase insurance, you must understand the types of coverage required and the amount of coverage you require. You can consult an insurance agent for guidance in this area. Since most staffing industries bill their customers on a net 30-day basis, they may require multiple types of insurance and bonds. It is best to check with every client to find out their needs.

3. Licensing Requirements

Licensing Requirements

Licensing for staffing agencies differs by state, so it’s vital to check with local, state, and federal officials for detailed licensing and certification qualifications when starting a temporary staffing agency. Additionally, you may require specialized staffing licenses, such as a healthcare staffing license or a hospitality staffing license. Some states also demand temporary staffing agencies to pass a state certification exam.

The following are some examples of industries that require specialized licenses:

  • Healthcare Staffing License: This license will be necessary if you intend to supply healthcare staff to hospitals, nursing homes, and other healthcare facilities. This license certifies that the company meets a specific level of professionalism and is qualified to provide medical staffing services.
  • Hospitality Staffing License: This license is essential if you plan to provide staff to hotels, restaurants, and other entertainment venues. It certifies that the company has the necessary competence and qualifications.

To apply for most staffing licenses, you must have valid business registration and tax ID, along with the required insurance. You will also require to submit an application that requests specific information about your mission, operating procedures, and staffing specialties.

4. Other Permits and Licenses

In addition to the above-mentioned licenses, your temporary staffing agency may require several other licenses, depending on the industry you specialize in, such as industrial safety permits, foodservice permits, and retail sales permits. It is advisable to do thorough research and make a list of all the necessary licenses required to operate your company.

In conclusion, obtaining the necessary permits and licenses is a vital step when starting a temporary staffing agency. The process can be time-consuming, so it is advisable to give yourself plenty of lead time to obtain the requisite certifications before your official launch.

Building a Network of Clients and Temporary Employees


Starting a temporary staffing agency requires a lot of hard work and strategic planning. One of the most crucial steps is to build a strong network of clients and temporary employees. A robust network will help you establish your brand and take your business to new heights of success. Here are some effective tips to build a network of clients and temporary employees.

1. Attend Networking Events

Networking Event

Networking events are a great way to connect with potential clients and candidates. Attend local job fairs, industry-specific events, and seminars where you can meet people from different industries, learn about their needs, and promote your services. Bring your business cards, brochures, and other marketing materials with you to ensure that people remember you and your services.

2. Leverage Social Media

Social Media

Social media is a powerful tool for building your network of clients and temporary employees. Create a LinkedIn profile and a Facebook page for your agency, and post regular updates about your services, job opportunities, and industry news. Join LinkedIn and Facebook groups related to your industry, and participate in discussions to showcase your expertise and connect with potential clients and candidates.

3. Referrals and Word of Mouth

Referral Marketing

Referrals and word of mouth are one of the most reliable and cost-effective ways to build your network. Encourage your satisfied clients and temporary employees to refer you to other businesses and professionals in their network. Offer referral bonuses or discounts to incentivize them. Always provide exceptional service and maintain a good reputation to increase your chances of getting referrals and positive reviews.

4. Build Relationships with Clients and Employees


Building strong relationships with clients and temporary employees is essential for the growth and success of your staffing agency. Foster a culture of mutual respect, transparency, and trust with your clients and employees. Always listen to their needs, provide timely feedback, and resolve any issues or concerns quickly. Make sure to maintain regular communication with them through emails, phone calls, or personal meetings. Treat them as partners, not just customers, and strive to exceed their expectations to build a longstanding relationship.

5. Offer Competitive Services and Benefits

Marketing Strategies

Offering competitive services and benefits is crucial to attract and retain clients and temporary employees. Conduct market research to determine the market rates and industry standards for your services, and offer attractive pricing. Provide comprehensive training and development programs for your candidates, and offer health benefits, retirement plans, and other incentives to your employees. Differentiate yourself from your competitors by offering personalized and high-quality services to your clients and employees.

Building a network of clients and temporary employees is a continuous process that requires time, effort, and dedication. Follow these tips and leverage all possible resources to build a strong and reliable network that will take your staffing agency to new heights of success.

Providing Exceptional Customer Service to Ensure Repeat Business

customer service

When starting a temporary staffing agency, one of the most important things that you need to consider is customer service. Remember, customer experience can make or break your business. If you want your clients to keep coming back and recommend your services to others, you need to provide exceptional customer service.

Here are some tips to help you provide exceptional customer service and ensure repeat business:

1. Respond promptly to clients’ needs and concerns.

If clients are dissatisfied or have concerns about your service, attending to their needs in a timely manner is crucial. Hire or assign staff who can take care of these concerns as soon as possible, and make sure that they are trained well and have the necessary tools to address these issues.

2. Communicate effectively.

Effective communication is key to maintaining a good relationship with your clients. Make sure that they are updated on any changes or developments in the staffing process. Establish a regular communication system that works for both parties, be it through email, phone calls, or in-person meetings.

3. Provide quality staff selection.

Your staffing agency’s success relies on quality selection. Ensure that the temporary employees you provide meet or exceed the client’s standards and specifications. This would require a thorough evaluation of the candidates based on their qualifications, skills, experience, and background.

Take note of specific job requirements, such as preferred certifications or experience in a particular industry or field, and ensure that your candidates meet these requirements. By doing so, clients will more likely be satisfied with the staff you provide and come back to you for future staffing needs.

4. Follow up with clients.

After providing staffing solutions, take time to follow up with clients to evaluate their satisfaction level. Ask for feedback and implement suggestions or ideas that can improve your service better.

5. Surprise clients with small gestures of appreciation.

thank you

Show appreciation to your clients by surprising them with small gestures of appreciation. For instance, sending a thank-you note or a small gift can go a long way in making clients feel appreciated and valued. Additionally, ask clients for their birthdays or company anniversaries, and send cards or small gifts to celebrate these milestones.

By following these tips, you can build trust with your clients, and your staffing agency can gain a reputation for providing exceptional customer service. With repeat business and positive reviews, your agency can grow and thrive as a reliable source of temporary staffing solutions.

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