How To Set Up A Temporary Staffing Agency

19 Mar 2024

Running A Temp Agency

Considering launching your own temporary staffing agency? Perhaps you like the idea of being your own boss or maybe you’re drawn to how much the industry is growing. Whatever your motivations, starting a temporary staffing agency is an exciting and potentially very rewarding venture. When launched and managed appropriately, a staffing agency has the potential to rapidly grow to be very successful.


Today, demand for temporary staff is very high and many organisations are choosing to outsource their temporary staff. A staffing agency offers companies help finding the most suitable candidates in a short time, providing expertise and covering admin.


This guide will equip you with the knowledge you need to navigate the setup process of a temporary staffing agency – from how to understand the market, to the requirements and costs you’ll face. We’ll finish by providing our 6 steps for starting a successful temporary staffing agency.


Here at New Millennia, we specialise in providing back office and finance services for startup staffing agencies. As you embark on this journey, you can be sure we will be there every step of the way to provide the support and solutions you need for success.


What is a temp agency?


A temporary staffing agency acts as a bridge between businesses and workers seeking temporary work opportunities. They meet the growing demand for flexible staffing solutions in sectors like hospitality and the events industry.


Both parties gain something of value: businesses benefit from streamlining their hiring process, and the workers gain quick and diverse access to employment options. Day-to-day, your agency will create job postings, assess applications and connect qualified candidates with employers.


Why do companies outsource their temporary staff?


  • Reduced recruitment costs

Hiring temporary staff through an agency eliminates the need for companies to invest time and resources in advertising open positions, screening resumes, conducting interviews, and handling onboarding processes.

  • Less admin

Additionally, a staffing agency will help with sourcing, interviewing, and training potential candidates – saving you workload and resources.

  • Flexibility

Outsourcing temporary staff allows companies to scale their workforce up or down quickly based on fluctuating needs. This is particularly valuable for seasonal services like a wedding caterer or children’s summer camp.

  • Expertise and specialised knowledge

A temp agency can provide valuable insight on staffing regulations and ensure compliance by ensuring workers are eligible to work.


Should you start a temporary staffing agency?


Starting a temping agency requires careful consideration – before making the decision there are some factors to weigh up.

Here’s our checklist of things to consider before starting an agency:


Goals: Both long-term and short-term; the clearer the goals, the better the execution of your plan.

Do you and your team have the relevant knowledge? Understanding human resources policies and procedures is a key advantage when looking to form a successful staffing agency.

Draft a detailed business plan: Take the time to define your target market and competitive strategy.

Reach out to potential clients: Don’t wait to start building connections and laying the groundwork early. 

Start developing a talent pool: Research where to find skilled individuals in your niche area – you’ll need to know where your candidates are.


6 Steps To Setting Up A Temp Agency


  • Research and find your target market

Launching a successful staffing agency hinges on thorough market research. Analyse different industries to identify where your company can best fill the gap. The three main staffing industry areas are office,  industrial, and professional. It’s also worth considering that prior experience in a particular field can be valuable and allow you to offer targeted expertise.


  • Next, develop a thorough business plan

This should include:

-Agency name

-Your niche

-A marketing plan

-A financial strategy

-Clear business goals


  • Register your business

This has a few steps to it:

-Firstly, decide on the legal structure for your business. Common options include sole proprietorship, partnership, limited liability company (LLC), or corporation. Each has its own advantages and possible disadvantages regarding taxes, liability, and ownership.

-Once you’ve chosen a business structure, you’ll need to check for name availability and register your business name with the appropriate government agency.

-Depending on your location, you might then need to obtain specific licences and permits to operate a temporary staffing business.

-Secure the appropriate business insurance. Consider general liability insurance, professional liability insurance, and workers’ compensation insurance.

-Familiarise yourself with the laws applying to your agency – this will be essential to stay compliant with these regulations.


  • Consider enlisting professionals to help you with your financial components.

You need to ensure you’re keeping accurate working records, that your payroll is efficient, and that you’re compliant with tax law. By delegating financial tasks to professionals, you’ll also free up valuable time to focus on core business activities like building client relationships and making placements.


  • Form a client network 

How? Well, firstly build a website that shows your abilities and distinct features. Other channels to consider include, but are not limited to: recruiting networks like LinkedIn, social media, referrals, personal networks, etc. You can also find potential clients through advertisements, email marketing, social media, and professional networks.


  • Building your team

While you can certainly launch your temporary staffing agency solo, building a strong team further along the line is crucial for long-term success.  As your business grows and you take on more placements, having a dedicated team can help you streamline operations, provide a wider range of expertise, and ultimately, better serve your clients. You can start by hiring for the most critical roles and gradually expand your team as your business needs evolve.


How much does it cost to start a temp agency?


The cost of launching a temporary staffing agency will depend on your chosen scope and specialty so unfortunately there is no one-size-fits-all answer. However, here are some key costs to keep in mind if considering starting an agency.


  • Establishment costs: these include forming a business entity, securing the necessary insurance, leasing a physical space, and purchasing hardware like computers.
  • Software: you’ll also need to invest in software to streamline your workflow, such as payroll processing systems. Alternatively, if you choose to outsource back-office functions, the accounting firm will have their own software.
  • Marketing: allocate a substantial portion of your budget for advertising in the initial stages of starting a temp agency. This will ensure you reach and attract potential clients.


Another key consideration is that temporary staffing agencies face a unique cash flow challenge. You’ll likely pay your temporary workers on a weekly basis, but clients may take longer to settle their invoices – often paying monthly. This delay can disrupt your cash flow but partnering with a specialised recruitment funding and payroll firm is a good way to ensure you’re financially healthy.


They will help bridge the gap between your expenses and client payments, ensuring you can pay your employees sufficiently and operate smoothly.


Whilst factoring is an option, an alternative funding solution is a risk free solution with one fixed cost, and no drawdown percentage, setup costs, or minimum fees.


Grow your staffing agency with New Millennia’s back office solution


Managing back-office tasks while launching a temporary staffing agency can quickly eat into your time and resources. At New Millennia, we specialise in providing comprehensive back office solutions and funding specifically designed for startup and growing staffing agencies.


Our back-office solution takes care of everything from payroll and invoicing to credit control and credit insurance. Most importantly, New Millennia provides genuine 100% funding, regardless of your number of clients or current business volume.  This ensures you have the financial resources to cover payroll and operating expenses while you scale your agency.


Contact us today to learn more about how our back-office and funding options can help you set up and grow your temporary staffing agency.


Try New Millennia today!

Call us on 0161 337 9882 to get started

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