How to Start a Staffing Agency: 10+ Tips for Success
What is a staffing agency?
Staffing agencies help put the world to work, matching talent with fitting opportunities and providing companies with flexible staffing solutions. Staffing agencies play a part in each step of the employee lifecycle, from initial recruitment to placement and onboarding to redeployment and beyond. For job seekers, working with a staffing agency can help them gain access to diverse opportunities and expert guidance. At the same time, companies can tap into pools of qualified talent, administrative support, and the agility to navigate their evolving staffing needs. In essence, staffing agencies guide both candidates and companies through the employment journey with precision and a keen eye for the perfect match.
Benefits of starting a staffing agency
Starting a recruiting agency brings a range of benefits, offering entrepreneurs the flexibility to curate their own roster of temporary workers and build relationships with diverse clients. This flexibility extends not only to choosing the right talent for specific roles but also to tailoring services to meet the unique needs of client companies. The potential for growth and profitability in the staffing industry is substantial, as the demand for skilled and flexible labor continues to rise. Entrepreneurs can capitalize on this by strategically positioning their agency to tap into burgeoning markets and industries, contributing to both personal and financial growth.
The ability to operate from the comfort of home or establish a dedicated office space adds another layer of flexibility to the journey of starting a staffing agency. This adaptability allows business owners to structure their work environment according to their preferences, fostering a conducive atmosphere for productivity. Furthermore, starting a staffing agency provides the opportunity to carve out a niche within the industry, focusing on specialized areas of expertise. By honing in on a niche, entrepreneurs can establish themselves as experts in specific fields, attracting clients seeking specialized staffing solutions. In a growing market, the advantages are vast, with the potential for high demand amplifying the prospects of success for those with the foresight to navigate the dynamic world of staffing.
10 steps to launch your staffing agency
Before diving into the focus areas below, here’s the practical roadmap — the steps that get you from idea to open for business.
- Choose your staffing niche: Generalist agencies compete on price. Agencies that specialise in a vertical — healthcare, IT, industrial, finance — compete on expertise. Pick a lane early.
- Research legal and licensing requirements: Staffing regulations vary by state, covering everything from employment classification to labour hire licensing. Get legal advice before you take on your first client.
- Create a business and financial plan: Map out your revenue model, target market, and operating costs. Most lenders will expect detailed projections for at least the first 12–24 months.
- Secure startup capital and payroll funding: You’ll pay workers weekly, but clients pay on 30–90 day terms. Invoice factoring and staffing-specific lenders can bridge that gap from day one.
- Register your business and obtain insurance: Set up your business entity, tax accounts, workers’ comp, general liability, and professional indemnity. These aren’t optional.
- Set up your staffing technology stack: Your ATS and CRM should keep sales and recruiting in one system — not scattered across spreadsheets and inboxes. Bullhorn for small agencies gives you candidate management, pipeline visibility, and smart search from day one, and scales as you add consultants, markets, and business lines without needing to migrate.
- Develop your pricing and contracts: Set your markup and bill rate structures based on your niche and local market. Invest in solid client and candidate contract templates upfront — it saves headaches later.
- Build your candidate pipeline: Start recruiting before you have clients. Job boards, LinkedIn, industry events — get candidates into your ATS early so you can deliver fast when your first client signs.
- Find and onboard your first clients: Cold outreach, networking, referrals — focus on companies in your niche that already use staffing agencies or have visible hiring pain. Lead with speed and specialisation.
- Launch, monitor, and scale: Go live, but treat the first 90 days as a learning phase. Track time-to-fill, fill rate, and gross margin from the start — Bullhorn’s reporting tools give you that visibility so you can scale on data, not gut feel.
How to start a staffing agency: 12 focus areas
Starting a staffing agency can be a lucrative venture, but it requires careful planning and strategic focus. To ensure success, it’s important to consider 12 key focus areas that will set the foundation for your agency’s operations and growth. Whether you are a seasoned entrepreneur or new to the staffing industry, these focus areas will provide a comprehensive guide to starting and running a successful staffing agency.
- Your business plan
- Marketing
- Sales
- Social media
- Technology
- Staffing trends and news
- Industry expertise
- Training
- Candidate experience
- Client engagement
- Reporting
- Security
Your business plan
To start a recruiting agency, you’ll need a business plan to act as your North Star, helping you to determine your mission, target market, financial projections, and growth strategies.
- Do you have a growth strategy in place?
- Are you emphasizing profit or revenue?
- Are you focusing on existing clients, new clients, or an even mix?
- Will you specialize in a specific placement-type (temp, perm, contract, direct hire)?
- What industries will you serve?
Marketing
Marketing is key to ensuring that your staffing agency gets the visibility and brand awareness it needs to get off the ground. Crafting a compelling marketing strategy allows you to showcase your agency’s unique value proposition.
- Do you have a modern website that’s easy to use?
- Is your site mobile-friendly?
- Do you monitor review-sites for feedback about your firm?
- Do you provide resources for candidates on your website?
- Do you have a specific selling point that differentiates your firm from the competition?
- Do you personalize your communication (in email, social media, etc.)?
Sales
Developing strong sales tactics ensures that your agency can effectively communicate its value and capabilities, establishing a solid client base.
- Do you have a clearly defined target customer audience?
- Do you have satisfied clients you can use as referrals?
- Do you have a strategy for generating leads that goes beyond cold-calling?
- Do you avoid generic value propositions in describing your firm? (e.g., “We provide great customer service).
Social media
A strong social media presence when starting a recruitment agency not only enhances brand visibility but also allows for real-time engagement, keeping your agency top-of-mind in the competitive staffing landscape.
- Do you have an established presence on sites like LinkedIn and Facebook?
- Do you regularly share useful content with candidates and clients?
- Do you have a sourcing strategy for identifying qualified candidates on social networks like Twitter, Facebook, and LinkedIn?
- Do you use social media to effectively network with prospective clients and candidates?
Technology
To start a staffing agency, you’ll need to invest in the best tech stack from the start. Leveraging cutting-edge tools and software streamlines operations, enhances efficiency, and keeps your agency ahead in a technologically driven recruitment landscape.
- Do you use an applicant tracking system (ATS) and/or customer relationship management (CRM) software to manage your data and nurture relationships with candidates and clients?
- If you are currently leveraging an ATS, is your email fully integrated?
- Do you have a reporting solution for tracking candidate and client data?
- Do you automate the onboarding process for candidates or is it manual?
Staffing trends and news
Staying informed about staffing trends and industry news is vital when starting a staffing agency. This knowledge positions you as an industry expert, enabling your agency to adapt to evolving market demands, remain competitive, and provide cutting-edge solutions to clients and candidates.
- Do you stay up-to-date on staffing industry trends?
- Do you network at staffing events?
- Do you stay up-to-date on current events and legislation that impact staffing firms?
- Are you a member of your state’s staffing association?
- Do you embrace new staffing technology?
Industry expertise
In-depth knowledge of industry nuances and specific sectors allows you to tailor your services, address unique challenges, and offer unparalleled value to clients and candidates.
- Are you seen as an expert in the industries you serve?
- Do you provide valuable industry resources to prospective candidates and clients?
- Do you go to industry-specific events to stay up-to-date and network with prospective clients?
Training
Investing in training programs is key to starting a staffing agency, ensuring that your team is equipped with the skills and knowledge needed for success. Well-trained staff can navigate the complexities of recruitment, fostering client satisfaction and candidate retention.
- Do you have a formal training program in place?
- Do you incorporate employee feedback into your training?
- How frequently, if ever, do you evaluate employee performance?
- Are you able to ramp-up new employees in a month or less?
Candidate experience
Prioritizing the candidate experience is key when starting a staffing agency. A positive candidate journey, from application to placement, fosters loyalty and positive word-of-mouth, setting the stage for attracting top-tier talent.
- Do you have a candidate engagement strategy in place at your firm?
- Do you personalize all communication with candidates?
- Do you follow up with candidates after their placement?
- Do you measure candidate satisfaction?
- Do you solicit candidate feedback?
- Do you interview candidates at the end of the hiring process to learn about their experience?
- Do you use candidate feedback to make deliberate improvements to your firm?
Client engagement
Engaging clients ensures that your staffing agency enjoys continued success. Regular communication, understanding client needs, and delivering exceptional service all help build client partnerships for the long run.
- Do you use an applicant tracking system (ATS) to nurture client relationships and detect unhappy clients?
- Do you maintain consistent and frequent communication with your clients?
- Do you measure client satisfaction?
- Do you solicit customer feedback?
- Do you use client feedback to make deliberate improvements to your firm?
Reporting
Detailed reporting provides insights into key performance indicators, allowing you to refine strategies, track success, and make informed decisions for the continuous improvement of your agency.
- Do you report on critical staffing metrics like fill-rate and gross margin?
- Do you perform weekly or monthly reports to better understand your business?
- Do you measure your employees’ performance on specific key metrics?
- Do you use your data to make meaningful changes to your firm?
Security
Safeguarding sensitive candidate and client data builds trust, ensuring compliance with data protection regulations and safeguarding the reputation of your agency in an increasingly security-conscious landscape.
- Do you have a backup of your pertinent client and candidate data?
- Is your data linked to a personal account vulnerable to attack (e.g., a personal Gmail account)?
- If you use an ATS/CRM vendor, are they SSAE 16 SOC1 Type II compliant?
Starting a Recruitment Agency: FAQ
How much does it cost to start a staffing agency?
Most agencies need between $50,000 and $150,000 to launch, with payroll funding, insurance, licensing, and technology as the biggest line items. Invoice factoring or staffing-specific credit lines help bridge the gap between paying workers and collecting from clients.
What technology does a recruitment agency need to get started?
You need a system that keeps sales and recruiting in one place — so every lead, candidate, and email is on one screen instead of scattered across tools. Bullhorn does exactly that, with smart search to find the right talent fast and a platform that grows with you as you add consultants and expand into new markets.
How to choose the best recruitment software?
Look for a platform that fits your workflow today and won’t hold you back tomorrow. The best systems let you add automation, reporting, and new business lines without migrating to a different tool — which is why over 10,000 staffing firms run on Bullhorn.
How do staffing agencies find clients?
Cold outreach, networking, and referrals — focused on companies in your niche that already use staffing services or have visible hiring pain. Fast, quality placements from your first clients become your best source of repeat business. Bullhorn’s built-in CRM keeps every client interaction tracked so nothing slips through the cracks as your pipeline grows.
What’s the difference between a staffing agency and a recruiting agency?
Staffing agencies place temporary or contract workers and stay the employer of record. Recruiting agencies fill permanent roles for a one-time placement fee. Many firms do both — and Bullhorn supports the full range, from temp and contract management to permanent placements, on a single platform.
Want more insights and tips on how to start a staffing agency? Check out Toolkit: Resources to Grow Your Staffing Firm from the Ground Up for useful tools and tips you can use to better your firm.
