The temporary staffing industry continues to expand, with yearly double-digit growth being commonplace. Companies find it convenient and cost-effective to utilize a temporary staffing agency to fulfill unforeseen demand, fill short-term vacancies, and benefit changing workloads due to restructuring or mergers. Additionally, employers are enticed by the idea of “test driving” new employees to minimize risk and ensure an excellent match for permanent positions.
Many employment 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 poor resume might have caused it to be very hard to be considered. Similarly, “drifters” (those who have a tendency to rapidly drift from job to job) may be plagued by an overly-long resume staffing solutions. Temporary staffing services may be well suited for drifters, because they have the opportunity to focus on short-term projects and proceed with no negative repercussions. Retirees and college students may also be very common candidates. A retired nurse may find enjoyment and extra income from the temporary medical staffing firm. Some type of computer science major can gain valuable experience working together with a complex agency.
Only a small number of personnel is required to 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 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. Because of the advantages, it will remain an intrinsic 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 much lower than many other businesses. The essential requirements are a small office with the normal supplies, some type of computer system with general accounting software and database software for organizing contracts, and the folks skills to work well with clientele and associates. It wouldn’t be impossible to take up a temporary staffing agency on a shoestring budget of a couple of thousand dollars.
The biggest business expense is payroll. It’s common for associates to be paid by the agency before the agency is paid by the client. An account must be maintained with sufficient funds to cover payroll costs until bills are paid by the clients.
It’s difficult – however not impossible – to obtain help from venture capitalists in covering part of the costs of creating a temporary staffing agency. A well-researched, forward-looking business plan is essential.
Pricing Guidelines for Service:
Associates are paid by the hour, and the agency covers its costs by charging reasonably limited to the quantity billed to the client. The exact number of the premium differs from case to case and can vary 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 lead to very decent profits for the temporary staffing agency. The contract usually spells out a flat fee to be paid to the agency in the event a client decides to permanently hire an associate.
Advertising and Marketing:
A competitive hurdle for small startups is that larger agencies curently have established reputations and brand recognition. This is actually a minor obstacle due to the localized nature of the business. It’s not required to wage a national marketing war to gain exposure for a brand new agency. A relatively inexpensive and well-directed marketing campaign can quickly build a valuable reputation within the local operating region of the startup.
Essential Equipment:
An office (perhaps a property office) must certanly be equipped with the typical office supplies and at least two telephone lines.
One or more 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 Web connection connects the agency with online job search sites.
Many temporary staffing services have computers with tutorial software available to simply help associates to train their keyboarding and basic office software skills. These computers may also be used to try the skills of applicants.
Income Potential:
Many billions of dollars are used on temporary staffing services each year. A small, single-office agency can earn profits in the countless amounts of dollars. The large, international firms rake in millions every year.
Target Market:
A temporary staffing agency is the middleman between two distinct markets: clients and associates.
It’s usually not a difficult matter to reach hundreds of applicants with simple help wanted advertisements. More focus will probably be placed on connecting with client companies and convincing them that your services may help their businesses.
Certain industries seem more receptive to temporary staffing. Financial 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 hire 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.
Strategies for Success:
Develop a distinct segment!
In larger markets, providers of temporary staffing services have discovered it beneficial to branch into niches such as for instance temporary medical staffing, legal, financial, or technical fields. The focused nature of the agencies allows recruiters to create a swimming 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 convenient 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 might otherwise receive through a general-service temporary staffing agency.
Automate!
Much of the task of owning a temporary staffing agency may be automated by computer software. Well-designed database software can ease the method of matching qualified associates with appropriate job openings. Accounting operations can be very heavily automated (but working closely with an excellent accountant remains advised). With one of these tools in place, just two major tasks remain: finding clients and finding associates.
Use your own services!
As the company grows, it will end up necessary to incorporate staff to take care of the recruitment and marketing. That will never be difficult, since typically dozens or hundreds of qualified candidates happen to be in touch with the agency!
Training, Skills or Experience Needed:
Recruiters have reached a plus with a background in human resources, business management, and marketing. A diploma isn’t needed for starting the company, but the knowledge gained through a business management program is immensely helpful. People skills are essential, and may be learned through experience and self study. Numerous books have already been published, specifically addressing temporary staffing as a small business opportunity.