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Tips for Starting a Staffing Business

Madhushree Kelkar
You can capitalize on a staffing business provided you know how to open an agency for the same. Here are a few tips for initiating this lucrative business.

Quick Tip

If you want to know about staffing trends, laws, and industry updates, it is highly advisable that you become a member of The American Staffing Association (ASA).
If you are looking for a welcome change from your 9 to 5 job and have an inclination towards recruitment, then starting a staffing business is ideal for you.
However, it is highly recommended that you get the relevant experience by working for a staffing agency or the hiring department in organizations before starting your own venture. This will also help develop contacts with recruitment personnel in various organizations.
Before starting, it is imperative that you conduct market research and make a thorough business plan detailing your finances, marketing, goals, strategy, etc. Hire help for dealing with scores of paperwork related to each candidate.
If you do not know how to open a staffing agency, don't worry at all. Here are the details of a few essential tips for starting a staffing business.

Tips to Get You Started

Scout for a Location

You will have to find a location for your business. It is advisable that you lease out a space in a commercial area instead of buying it right away. Once you know about the kind of foot traffic the location commands, you can go ahead and buy the space.
Also, in the initial days, buying will mean added expenditure and will increase your loan amount. Hence, prefer to rent the place out. One more option is to start an office at home. However, you will have to check the zoning restrictions in your area.
Also, when you are actually meeting candidates, you will have to call them in a hotel or conference room, which will again be added expenditure. Hence, it is best to lease out a space that will have a reception area, dedicated meeting room, and waiting room.

Decide the Type of Business

There are many types of staffing businesses. You will have to decide which type of services you will offer. You must decide whether you will go for temporary staffing, long-term staffing, or temporary to permanent staffing.
While temporary staffing offers candidates who are employed for a short term, long-term staffing involves recruits who are employed for an uncertain duration. Temporary to permanent staffing allows the worker to become permanent in a while based on his performance. At times, employees are also hired on an assignment or contractual basis.
You will have to conduct market analysis to find which type of staffing will bring in maximum revenues. Many staffing businesses also prefer to offer all types of employment.

Complete Formalities

Apart from registering your business with the State secretary, it is highly recommended that you incorporate it. This will protect your personal assets in case of a problem.
Consult the local, state, and federal authorities to know about the required permits and licenses. You will also need to get an EIN number from the IRS if you are going to hire employees.
Also, know about the insurance requirement of the business. You will have to get a workers' compensation insurance along with a liability insurance.

Undertake Marketing Initiatives

In order to survive competition, you must undertake investment in advertisement and marketing.
Utilize the traditional forms of advertising like posters, print ads, radio commercials, etc. Also, use your existing contacts to tap into the recruitment departments of companies. Usually, they prefer to work with well-known entities, and meeting them in person will any day work in your favor rather than cold calls.
Also, invest in social network advertising and banners to reach out to people who are on the lookout for candidates or jobs.

Conduct Networking

You will have to network with a lot of people if you want to conduct this business. This includes not only the recruitment departments of companies, but also with placement cells in colleges. You will have to convince them that your company is in a better position to find them the candidate that they are looking for.
While dealing with executives or candidates, always have a professional disposition. Also, carry your business cards and marketing collateral's so that they will know about your experience and expertise in your field. Don't turn up in casual clothes for any meeting; if you don't take your business seriously, no one else will.

Charges and Fees

You will have to create contracts with the organizations as well as candidates. For this, it is recommended that you take help of a legal expert, who can help you out with the legal formalities.
Most times, you will be paid only by the organization in case of permanent staffing. However, if it is temporary, you may reach an agreement. For example, after gaining $20 from the company, you will pay only $16 to the employee. Also, many times, both the employee and the organization bear the joint expense of your fees.

Create an Expertise

In a matter of few years, you should become the go-to agency for a certain type of staffing. You should find a strong area in which you can offer your expertise.
Choose anything from IT, manufacturing, management, finance, consulting, construction, etc., and offer candidates for the same. For example, if you are located in an area which is primarily an IT hub, you can become an expert in providing candidates for the IT field.
It is important that you are aware of your strengths and weaknesses and do not end up offering wrong candidates for positions in an industry where you lack experience.

Seek Candidates

You will have to get the right candidates for the positions.
Apart from advertising, you should also set up booths at career fairs and job fairs to know the candidates directly. You must maintain a database of the contacts, qualifications, and experience of all these candidates.
If you are targeting students, then you can put up posters near the college or in caf├ęs where youngsters usually hang out. If you are looking at head-hunting senior officials, you will have to reach them out through professional networks and get to know them through references.
It is advisable that you conduct a background check before hiring people for critical jobs like babysitting, store manager, security personnel, etc.

Know the Tricks of the Trade

It is important that you interview the candidates and only send capable and experienced ones for the interview.
At times, you will receive a frantic call from the company where you have sent a recruit that the person never turned up for his job. This happens all the time as people may change their minds or just find a better opportunity. You should always have shortlisted candidates whom you can send for an interview in their place.
Remember, people may not keep their commitment, but as a businessman, you will be held responsible for their actions. Also, verify through references that the qualifications and experience mentioned by a candidate are true. The last thing you would want is to spoil your reputation that you do not send trustworthy candidates.
Over a period of time, you can increase the domains in which you offer your services. You can also graduate in making senior executive placements that are more lucrative. Hope you will utilize these tips for starting a staffing services business and expand it further.