Recruiting & Staffing Agency

A recruiting and staffing agency finds, screens, and places qualified candidates with companies needing to fill positions, earning fees for successful hires.

Agencies can focus on permanent placements, temporary staffing, contract workers, or combinations.

Successful agencies typically specialize by industry (technology, healthcare, finance, manufacturing), job function (sales, accounting, engineering), or level (executive search, professional, entry-level).

The business model generates revenue through placement fees (typically 15-30% of candidate's first-year salary for permanent placements), markup on hourly rates for temporary/contract workers (30-50% above worker pay), or retainer fees for executive search.

Services include sourcing and screening candidates, interviewing and assessment, reference checking, salary negotiation facilitation, onboarding support, and for temp agencies, payroll and benefits administration for placed workers.

Success requires deep networks in target industries to source candidates, interviewing and assessment skills to evaluate fit, relationship building with hiring managers and candidates, understanding of compensation and market rates, and sales ability to develop client relationships.

Most successful recruiters come from HR backgrounds, industry experience providing networks, or sales roles.

The business involves active candidate sourcing through LinkedIn and networks, screening and interviewing, submitting qualified candidates to clients, coordinating interviews, negotiating offers, and maintaining relationships for future placements.

Marketing targets hiring managers and HR leaders through networking, LinkedIn outreach, demonstrating industry expertise, and showcasing successful placements and time-to-fill metrics.

Temp/contract staffing requires more infrastructure for payroll and benefits but generates recurring revenue.

The business offers high-margin potential on placements and scalability by hiring additional recruiters.

Challenges include competitive market with many agencies, candidate and client ghosting, deals falling through after investment, maintaining candidate pipeline, and for temp staffing, cash flow gaps between paying workers and receiving client payment.

Some agencies expand to HR consulting or assessment services.