When a human resources representative at a major company is too busy or overextended to recruit a temporary employee on his own, he will likely call a local temp agency to fill the need. Companies want qualified temporary candidates, and they also want to work with a professionally run staffing company. Keep these motivations in mind as you are running through your checklist for starting your own temp agency.
Choose Your Industry
When you start up a temp agency, your first step is to decide what type of clients you want to work for as well as the type of employees you will be placing. Find a niche industry that is direly in need of workers. For example, if you live in a town that is full of transportation companies that are constantly on the look out for reliable data-entry personnel or dock workers, then put your focus on finding temps who type and have transport experience.
Register as a Business
In order to start a temp agency, you need to become registered as a business in your state so that you can pay business taxes and payroll taxes on behalf of each temp worker. Your state may also charge you an additional fee to get a license to operate as a staffing company.
Find Office Space
While you can operate a very small temp agency out of a home office, you may find it to be more practical to rent office space. Look for a small office building with enough space for an office for yourself and a few cubicles for your supporting staff.
Find Clients
The next step to starting your temp agency is to find clients who will agree to contract with you. Make appointments with human resources managers at notable companies in your area so that you can come in and make a face-to-face presentation about your new service.
Hire Temps
The process of hiring temporary workers will likely be your biggest challenge as a new temp agency. You'll have to compete with other agencies in town for the best workers and will have to put each employee through a thorough screening process including a background, credit and previous-employment check. Use online job posting sites such as Monster.com, JobCentral.com and CareerBuilder.com to find temps. Be sure to clarify that you are a temp agency, not the actual client, and set your listing up for targeted, local searches from applicants within a 30 to 50 mile radius of your location.
Establish a Payroll System
You will pay your temp workers directly until they are hired as full-time employees by the client, so you'll need to establish a payroll system. You can either hire an accountant to work in-house or contract with a payroll-processing firm like ADP, Paychex or Ceridian.
You also must decide on the premium that you will charge to your client. This can range from 5 to 50 percent depending on the client's budget and how valuable the lead is to the company.
Training Program
In essence, your staffers are your product. You've got to fine-tune and maintain them so that they will represent you well and continue to bring business to your temp agency. So set up a training program for new hires that will teach them the skills they need to succeed on each assignment.
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