Starting a staffing agency is an uphill battle but it sure has its rewards. Under the supervision of visionary leaders, staffing agencies grow quickly and make a name for themselves in the realm of profits. A team of professionals can lead the way to the success of the recruitment agency.
How do staffing agencies make a profit?
Temporary Staffing Agency recruits employees on behalf of the employer and charges the client company for the hire. The agency makes money by paying the employee less than the client is being charged. Depending on numerous factors like industry, demand, location, supply, and position, Margin varies anywhere between 30% to 70%.
How to start and grow the Staffing Agency?
In this step-by-step guide, we will take you through basic steps to start and steer the temp staff agencyin the right way.
The owner must evaluate the skill set whether he has what it takes to start an employment agency. How he will
- Find clients
- Find candidates
- Match clients with the right candidates
- Manage workforce
Select The Industry & Niche
The staffing agency is divided into three segments
Selecting a successful industry plays an important role to make your staffing agency grow quickly above the break-even point. After selecting an industry segment, evaluate how your company will fetch clients and fulfill their requirements.
Go a little deeper than the industry segment and select a particular niche within the selected segment.
Analyze Startup Costs
Assess establishment and operational startup costs. Establishments are one-time costs that are incurred in setting up a business. These include
- Office (optional)
- Legal setup expenses
whereas the operational costs are incurred to get clients, employees, and other costs till the company reaches above the break-even point.
Finding Clients & Employees
To fetch clients you would have to take help from the
- Cold Calling
- Trade Publications
Finding a client is one thing but the real difficulty lies in how to lock the deal. How You make yourself seen in a crowded and competitive space. The owner must know how to push creative boundaries to get clients.
Finding the right employee is just as difficult as the right client and to cater to the requirements of the client and candidates just adds to the headaches. Go search for candidates through LinkedIn, Contacts, referrals, and job boards.
Use a non-traditional means to get employees and candidates to kick start the business.
Understanding the agency’s cash flow
When running a staffing agency, the employees get paid weekly or fortnightly whereas the client pays monthly. The last week might be difficult for the budding agency as the funds are shorts and the wages are due. There must be enough reserves to pay employees on time. Cashflow problems, missed payroll, tax liabilities, and failures are common problems a growing staffing company comes across.
Have an adequate cash cushion or reserve in place to deal with the initial cash crunch. To handle startup cash needs, consider taking help from the payroll financing services or factoring payroll financing, these services offer competitive rates and high advances to avoid cash crunches.
Starting a staffing business is overwhelming, do not rush instead take time to study business dynamics. The market is already crowded with Staffing agencies, focus on how you will change the game, what lucrative offer will your agency put on the table. Search online “Recruitment Agencies Bedford” online and see what the competitors are offering.