8 Tips for Growing Your Staffing Agency

business growth

Last Updated March 7, 2023

Like in any other business, starting and running a successful staffing agency is easier said than done. Though there are several obstacles you will encounter in this field, one of the most significant challenges is a hyper-competitive staffing and recruiting industry.

According to the American Staffing Association, there are currently about 25,000 staffing agencies, and these numbers are expected to increase as the overall workforce continues to grow. These numbers are not to scare you but to keep you on your toes in your agency.

Want to know how to grow a staffing agency? Here are 8 tips to take your startup to a fully functioning business regardless of the road bumps.

How to Grow Your Staffing Agency

In America alone, there are 25,000 staffing agencies currently operating, which means you may be in for some stiff competition. Follow these 8 tips to improve your chances of succeeding in the staffing industry.

1. Pick an Industry to Focus On

Although a staffing firm can serve more than one industry at a time, you should start by specializing in one niche. When you focus on one niche, you are better positioned to have strong candidates to give to your clients.

Additionally, your potential clients will have more confidence in you since you are more likely to have professional candidates and experts in their industry. It also makes you more professional, thus increasing your chances of overtaking other agencies that were in operation before you.

Suppose it is not clear the ideal industry for you to work in, consider your location and resources. Moreover, you can check your strengths, gaps in employment, and what your competitors are doing.

After you have grown in the industry you specialize in, you can move to another industry, preferably in a related niche.

2. Identify Your Ideal Clients

After you select your focus industry, it is easy for you to identify your ideal clients. You can determine the ideal clients by looking at factors like their location, company size, and buyer and industrial demographics.

Identifying your clients helps you know what they are looking for in staffing agencies. They may have specifications based on gender, age, job titles, and educational background. This information helps you provide them with what they need, which will make you their favorite agency.

3. Develop Repeatable Processes to Bring in New Clients and Candidates

Lack of clients and potential candidates is a common cause for the failure of many staffing firms. For this reason, you need to develop processes to convince both candidates and clients that you have what they need. To attract staffing candidates, sponsor community events where you can meet and persuade them why you are the way to their future job.

Marketing your business, primarily through channels that can reach potential candidates, will also get you what you need.

To find clients for your staffing agency, identify the vacant positions in their businesses and show how you can offer exceptional solutions. Additionally, share former client testimonials or ask for tasks that you will do to perfection to prove that you are the real deal.

4. Build a Great Culture

Your business culture is the atmosphere that runs your staffing firm and makes your business unique. It involves values, behaviors, and other practices that come together to make the company a happy workplace.

A great culture makes you more appealing to your clients, thus increasing their chances of coming to your staffing business over and over.

Additionally, it motivates the candidates in your agency. Motivated candidates have a lower chance of running to other staffing agencies that may promise to offer them more than what you offer.

Related: Interview Questions for Staffing Companies

5. Track and Take Action on Important KPIs

Key performance indicators (KPIs) are values that show how well a business is achieving its objectives. They help you know what works best for the staffing business and what you should specialize in.

Key Performance Indicators can be in various sectors like operational, marketing, customer, financial, and sales. For example, through competitive research and data comparison, it’s possible that you find you’re pricing your staffing services too low. Identify the KPIs in each of these sectors. In turn, it will result in your business’ growth.

6. Create a Standing out Marketing Plan

Marketing is key to boosting brand awareness to both clients and candidates. Implementing a creative and effective marketing strategy for your staffing agency will help you stand out from the noisy crowd.

For instance, segment your market and identify the group that you want to target. These segments help you make decisions with the best results.

Additionally, give away your ideas to make your agency the first place that both clients and candidates run to whenever they need staffing agency services. According to Angela Petulla, altLINE’s Director of Online Marketing, “Creating informational content and publishing it on a company blog can boost your staffing agency’s SEO, making it easier for potential customers to find you from Google searches. For example, writing a blog post about ‘How to Calculate Your Staffing Needs’ addresses a concern for potential customers, building trust with them while also improving your brand recognition.”

7. Get Your Finances in Order

Money and cash flow considerably affect business growth, and staffing companies are no exemption. Therefore, take a close look at your capabilities and financial resources to ensure you are on track.

You can also get your finances in order by introducing invoice factoring for your staffing company. This type of invoice financing involves selling some or all of your company’s invoices to a third party in exchange for a cash advance.

It is a recommendable method to help improve your revenue and cash flow, especially when your cash flow is inconsistent. Invoice factoring helps maintain financial stability in your business even when your clients have delayed their payments.

It is also more reliable than other traditional methods of getting cash, like traditional bank loans. Conventional financial institutions like banks may be reluctant to loan you money, especially if you are still new to the business.

Thus, invoice factoring saves you the pain caused by inconsistent cash flows and inadequate revenue.

Related: Bank Loans vs. Invoice Factoring

8. Automate Whenever Possible

Automating tasks in your staffing agency helps you save as much money as possible. Moreover, you give your experts more time to handle the more demanding tasks while machines handle what can be automated.

For instance, you can use different applications that are built for staffing agencies to automate tasks like sourcing candidates and onboarding new employees. Here, most tasks are standardized and do not need many hands to operate. This helps direct more energy and time on tasks that can help better the agency.

Other Important Tips for Staffing Agencies

In addition to the 8 tips we shared above, here are some additional advice when building your staffing agency:

Differentiate From Competitors

You must set your company apart from the competition to ensure clients keep coming back. Low rates and great temp employees only go so far, so you must look for other ways to differentiate your company. If you ever reach a position of considering selling your staffing agency, standing out from the rest can be hugely beneficial.

You can set your company apart from the pack by going the extra mile on jobs. Consider providing additional services, giving clients insights to improve their workflows, and involving them in choosing your temp staff.

Communicate With Your Clients

Maintaining strong client relationships increases your chances of getting repeat business. Always communicate clearly with them, whether you have good or bad news. Keep them updated on recruitment status, deadlines, and other things that may affect their temp staffing.

Be Vocal About Your Value

Your company should be its own biggest fan. Clients generally prefer staffing agencies that know their value, and one of the best ways to do that is to promote your accomplishments. Share testimonials for past clients, display key statistics that show why you are good at your job, and create an eye-catching website to contain all that information.

How To Get Business For A Staffing Agency

It is not enough to simply retain old clients and depend on repeat business. To sustain growth, you must seek new clients and job opportunities. Here are some great ways to find new prospective clients:

  • Ask current clients for referrals.
  • Visit trade events to build your network.
  • Make sales calls to companies in your industry.
  • Promote your company online.

What Is A Good Gross Profit Margin For A Staffing Agency?

A gross profit margin of 25% is generally good enough for staffing agencies. With taxes, operating expenses, and other costs taken into account, you should generally earn a net profit margin of 4-10%.

The Secret to a Successful Staffing Agency

No one secret can help you take your staffing agency to the next level. Instead, you need to improve your clients or candidates. You need to have several right analytical strategies in place.

Utilize the tips above to get you started on the journey towards running the temporary staffing agency with the largest market share.