How to Start a Temporary Service

Temporary services provide a critically important resource of human talent to corporations and organizations. Many temporary agencies combine services as recruiting agencies or headhunter firms. Others are simply a stand-alone temporary agency. Temporary agencies differ from recruiting firms in the sense that the candidate is the employee of the agency and not of the client company.

Things You'll Need

• Computer, printer and fax
• Broadband Internet
• Two telephone lines

Instructions

Temp Agencies: Profitable and Easy to Operate

1. Partner with a payroll and administrative service agency. These agencies act as the employer of record and handle all of your back office human resources administrative work. They assume the liability on payrolls and insurance. As the temporary staffing firm you are responsible for locating qualified candidates and securing active job orders. Partner with an agency that will provide the back office services including billing, workers compensation insurance and payroll processing. Your temporary firm will not be responsible for any payroll compliance, bankrolling payroll dollars or carrying any required insurance. The cost of their service varies however, and they usually charge a small percentage of fees collected. This eliminates a lot of professional and legal liability. A great company to partner with is Innovative Employee Services (IES) or Ceridian. (See links below)

2. Develop a niche target candidate group or industry. Focus on one industry or profession. Become an expert in your chosen area. Work your niche market laterally and vertically. This means from entry level to top management and all size companies within your target market. For example, if you choose accounting then focus on entry-level accounting clerks through the controller or top accounting professional. Market your temporary services to companies of all sizes that have a need for accounting staff. As a general rule, you should target companies with annual revenues of 10 million and above.

3. Develop your pricing strategy. The more difficult a skill set is to find the higher the market is. Determine what your standard markup will be. A good starting point is 50 percent. If an employee will be paid 20 dollars an hour, your fee will be 30 dollars per hour. This is a 50 percent markup. Higher markups can be charged for specialty skills that are difficult to find. The highest markup, that is usually accepted, is 75 percent. Be very careful trying to charge above a 75 percent markup.

4. Develop your office infrastructure. Choose a candidate tracking software. Akken is a good choice for a temp agency. They have a tracking system for candidate hours, positions and resumes, as well as a client job order tracking system. Subscribe to careerbuilder.com or monster.com to locate qualified candidates and place help wanted adds. Establish two phone lines and high speed Internet access. You can work out of your home in the beginning. Establish an account with SkillCheck online testing. This will allow you to test your candidate's skill level before sending them on an assignment.

5. Market your services to prospective employers. Recruit qualified candidates. To locate job openings search Careerbuilder and Monster job boards for open positions within your area. Call those employers. Visit indeed.com to locate more open positions. Market your services to these companies. Recruit candidates by searching your resume database subscription. Place wanted ads and interview the applicants. Test their skills and establish interviews and possibly start dates for temporary assignments.

Tips & Warnings

• Start with a minimum of six months operating expenses. Although you should establish a net 7 or net 15 payment cycle, it may take a couple of months to generate any significant income.

References

• Innovative Employee Services (IES)
• Ceridian
• Akken

Resources

• SkillCheck