Start A Staffing Agency - Business Ideas

Updated: September 15th, 2022
Start A Staffing Agency

Please note that the data provided in this article are estimates and may vary depending on various factors, and should not be considered as perfect or definitive.

A staffing agency acts as the intermediary between employees and employers. The staffing agencies help match qualified employees with the right employers. With many growing businesses still cautious about increasing in-house talent, starting a staffing agency could be a profitable business opportunity.

The employer contacts a staffing agency and provides a detailed job description for the role they plan to fill. The staffing agency then creates the job on their website, or they might reach the qualified staff in their database, asking them to apply for the role. Candidates apply for the position, and the staffing agency schedules interviews to vet the potential candidates. The employer will make the final hiring decision.

Staffing agencies make money by charging job candidates or employers a markup fee.

To start a staffing agency, choose the right niche, know your startup costs, and get legally covered. Ensure you have all licenses and the permits and take out insurance.

Starting a staffing agency requires a great deal of effort, dedication, and most importantly passion.

If you're interested in how to sell staffing service, or selling staffing service online, you can use this page as a guide for everything you'll need to know.

Want to learn more? You can check out our full guide on how to start a staffing agency ➜

Key Stats

revenue (monthly)
$245K
starting costs
$21.4K
gross margin
60%
avg product price
$48
time to build
270 days
growth
Direct sales
business model
Software
time investment
Full time

Startup Costs

Min Startup Costs Max Startup Costs

Office Space Expenses

$0

$7,000

Employee & Freelancer Expenses

$151

$352

Website Costs

$223

$7,215

Business Formation Fees

$5,600

$20,400

Equipment & Supply Expenses

$66

$700

Advertising & Marketing Costs

$75

$4,036

Software Expenses

$162

$2,994

Total Startup Costs

$6,277

$42,697

Successful Businesses

Business URL Rank

Lensa

lensa.com

19,662

Medical Technology, Services, and Solutions Global Leader

medtronic.com

23,956

Ethiopian Business Portal

2merkato.com

38,010

Australia's leading recruitment agency

roberthalf.com.au

48,267

Hays Specialist Recruitment job employment agency

hays.com.au

66,625

Randstad

randstad.com

78,016

Apex Systems Home

apexsystems.com

102,092

Randstad

randstad.com.au

103,570

Allegis Group

allegisgroup.com

119,041

BELAY

belaysolutions.com

144,749

Corporate Staffing Services

corporatestaffing.co.ke

146,043

Pros & Cons

Pros Description

Flexibility

You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.

Rewarding work

Starting a staffing agency can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.

Scalable

With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers.

Meaningful business connections

You never know who you will meet as a staffing agency. This could be the start of an incredible business opportunity!

High customer retention rates

Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer.

High margins

The gross margins for your staffing agency are typically around 60%, which is considerably high and allows you to grow your business and manage costs easily.

Cons Description

Motivation of employees

If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.

High employee turnover

In the staffing agency, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment.

High overhead expenses

With starting a staffing agency, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.

Time commitment

With starting a staffing agency, all responsibilities and decisions are in your hands. Although this is not necessarily a negative thing, work life can take over at times. This can place a strain on friends and family and add to the pressure of launching a new business.

Difficult to build trust with your customer

With starting a staffing agency, there can be minimal face-to-face interaction, which means it can be a lot more difficult to establish trust with your customers. You'll need to go the extra mile with your customer to grab their attention and business.

Impatient customers

You may offer an engaging user experience for your customer, but customers expect a lot and may be impatient if they aren't pleased with your product or service.

Marketing Ideas

  • 1

    Affiliate Program

    Affiliate marketing is a great way to bring in a new revenue stream, especially when you don't sell products or services.

    Simply put, an affiliate program is an agreement where a business pays another business or influencer ("the affiliate") a commission for sending traffic and/or sales their way.

    The affiliate typically gets a unique link where clicks and conversions can be tracked.

    Learn more about affiliate program ➜

  • 2

    Direct Sales

    Direct sales strategy implies a direct contact between a seller and a consumer without the involvement of any third party. Direct selling is popular in sectors where sellers communicate with their clientele personally. The sales technique occurs at non-store locations which include at home, work, or online.

    For direct selling to succeed, hire a few (or many) salespeople to support the sales conversion process. It's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.

    Learn more about direct sales ➜

  • 3

    Word of mouth

    Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.

    Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.

    According to Nielsen, 92% of people trust recommendations from friends and family.

    Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.

    Learn more about word of mouth ➜