If you’re an HR professional with a passion for talent acquisition and a dream of entrepreneurship, starting your own staffing agency can be a rewarding and lucrative venture. However, embarking on this journey requires careful planning, industry knowledge and access to valuable resources.
Below, 13 Forbes Human Resources Council members share the crucial steps that aspiring staffing agency owners should take to lay a strong foundation for their business. From understanding the market demand and identifying your target clientele to developing a robust business plan and branding strategy, each aspect plays a pivotal role in your agency’s success.
1. Explore Different Environments
Work in every area of HR and within different organizations if and when possible, even if this means interning or job shadowing. There is no school or training program that will better prepare you for this journey than your own knowledge and experience. – Jenna Hinrichsen, Advanced RPO
2. Approach Situations With Integrity
Approach everything with the knowledge you hold and with integrity. Be open, listen and understand the one area or niche that you are an expert in. Embrace the relationships you have and leverage them for guidance and opportunities. Start with a plan that outlines the impact you want to have—it’s the “so what” to the agency and not just the “why;” what are the key principles that are central to you? – Chandran Fernando, Matrix360 Inc.
3. Understand The Threadbare Of The Client’s Needs
The most successful staffing agencies are the ones that understand the client’s needs threadbare. Staffing agencies are of two types: ones who source candidates who match the job description; and the better ones who source profiles that match the cultural fit, who can handle current challenges in that role and fit the company’s current situation. – Subhash Chandar, Laminaar Aviation Infotech
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4. Analyze, Define, Understand And Stand Out
As someone who has bootstrapped their own recruiting firm and experienced acquisition, here’s my advice for launching your agency: Analyze the market thoroughly, clearly define your business offerings, understand your competition and stand out by delivering genuine innovation and a compelling value proposition. – Chad MacRae, Tinder
5. Find A Mentor
Staffing is somewhat different than HR, so this arena also involves client service and business development. I strongly recommend finding a mentor before you launch, getting involved with the American Staffing Association and subscribing to “Staffing Today” to keep up with current trends. – Lisa Shuster, iHire
6. Define Your Niche
Before you launch, define your niche to differentiate your agency. The best go-to resources are current headhunters who head up their own firms: They can share the good, the bad and the ugly. – Britton Bloch, Navy Federal
7. Analyze The Market
Spend some time analyzing the market and identifying a niche where you can stand out. It’s best to be specialized—this could be by industry or by position scope. You want to be seen as a trusted advisor. One resource that I found very helpful when I was leading a recruiting agency was the National Association of Personnel Services. They provide training and connections to recruiting resources. – Hazel Kassu, Sudduth Search
8. Build Solid Funding
Have solid funding in the bank. It is critical that you have the funds and resources to support your business for at least six months. Payouts and contractual agreements often are at net 30 or 45 days after month end. – Julie Hankins, NNIT
9. Learn As Much About Business As You Can
Regardless of whether you’re an HR or recruiting professional, launching a staffing agency is a business, and running a business requires a unique skill set. Based on what I’ve read, approximately 50% of all businesses fail in the first five years, so before starting one, you should try to learn as much about business as possible. Sites such as Udemy, Coursera and LinkedIn Learning offer a range of online business courses. – John Feldmann, Insperity
10. Understand The Industry
Conduct thorough market research. Understand your industry, identify target markets and analyze competitors to identify gaps and opportunities. A valuable resource for guidance in this process is the U.S. Small Business Administration (SBA). The SBA provides resources, training and assistance to entrepreneurs, including information on market research, business planning and financing options. – Joseph Soares, IBPROM Corp.
11. Gain Clients Outside Of Friends
Start with a client—if you can get a client that is not a friend or a close connection, you have a business to build. Until you can get someone you didn’t know before to pay for your services — no other activities matter at the start. – Nick Frey, Avomind
12. Identify Gaps In The Industry
Identify gaps where you see agencies falling short. It is a challenging time to start an agency, so identify where you can make improvements on the client and candidate experience. Focus on one or more areas of expertise and figure out what types of companies you will initially target and what types of candidates you will recruit. – Erin ImHof, CertiK
13. Network With Established Professionals
Consider checking online platforms like Small Business Administration, and SCORE for guides, templates and mentorship. Additionally, industry-specific associations like the American Staffing Association offer resources and support for starting staffing agencies. Networking with established professionals and attending industry conferences can also provide valuable insights and connections. – Kimika Banfield, Arootah
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