Starting a Staffing Agency? Specialize!



A rose may be a rose may be a rose, but there are many different types of staffing agencies, many of them quite different from other types. Some require specialized expertise or—because they work with unique markets—specialized marketing plans. The type of people you hire, your physical location, even the name of your agency may be influenced by your specialty. So if you’re considering starting a staffing agency, it’s important to be absolutely clear what your specialty will be; you simply can’t afford to be all things to all people.

Here’s a Specialist’s Guide to Starting A Staffing Agency

Contingency Search Agency

Contingency search agencies are paid by their clients only for successful searches, typically a percentage of the candidate’s starting salary. These agencies usually handle only searches for relatively highly paid executive or professional positions and may further specialize in specific industries, such as financial services or manufacturing.

Contract Recruiting Agency

Contract recruiting agencies specialize in hiring large volumes of employees for individual companies Under this arrangement, a human resources professional is hired from a staffing firm to recruit for a client company. The contract recruiter will work at the client company, under the direction of the client company. Typically the staffing firm and contract recruiter are paid based on an agreed hourly rate. Contract recruiting agencies can be an alternative to contingency search agencies, especially for companies that may be short-staffed in the human resources department.

Managed Services Agency

Managed services agencies hire and manage staff to enable companies to outsource entire departments or function, such as a call center or mail room, on a continuing basis. Obviously, a managed services agency will want to specialize in specific functions.

Outplacement Agency

Outplacement agencies specialize in handling employee separations, providing career assistance to terminated employees whose employment has been terminated. In this case, the agency’s clients are not companies seeking to hire, but companies that need to lay off workers. 

Professional Employer Organization (PEO)

A professional employer organization essentially “leases” employees under its own employ to organizations that don’t want to assume responsibility for the employees’ payroll, benefits, and other human resource requirements. As with a managed services agency, a PEO will likely specialize in specific kinds of job functions.

Recruitment Process Outsourcer (RPO) 

A recruitment process outsourcer handles the entire process of recruiting for a particular skill level. For instance a client company might outsource the recruiting for support staff while continuing to recruit in-house for managerial and core staff members. 

Retained Search Agency 

Retained search agencies tend to be the ones that specialize in higher-level candidates—executives and professionals. Unlike contingency search agencies that earn a fee only when a candidate is hired,  retained search agencies are paid some or all of the fee before the search begins. This ensures that the agency is fully committed to the search and will expend resources to complete it successfully. If you start a retained search agency, you will need to hire the talent to conduct high level searches.

Temporary Help Agency

This is what comes to mind for most people at the mention of staffing firms.  A temporary help agency recruits, screens, and hires employees in order to build up a large pool of qualified employees. These employees are assigned to the staffing firm’s clients for temporary periods of time and for duties as varied as mailroom coverage to executive level tasks.  Some of these employees may ultimately be hired by the client for full-time work—called temp-to-perm—at which time the agency will receive another fee. Like other staffing agencies, temporary help agencies will tend to specialize in particular types of employees, such as industrial workers or secretarial.

What Sort of Staffing Agency Suits You?

Contingency search? Temporary help? Before you open the doors on your new staffing agency, you’d better have a good idea of your capabilities and specialities.