Nextaff Client Blog

3 Considerations to Make When Starting a Staffing Franchise

Posted February 09, 2017

After the decision is made to start a staffing franchise, entrepreneurs are ready to find the funding and begin working the business. One of the main benefits of starting a franchise is the training, marketing, and workflow details are already established; entrepreneurs, simply, have to follow instructions and make wise business choices when necessary. In regard to these choices, here are 3 considerations to make when starting a staffing franchise.

    • Hiring Staff

    • Industry Focus

    • Placement Strategy

#1. Hiring Staff:

Staffing franchises need a staff of 2 to 5 employees to run efficiently, including the business owner. The quality of the staff will greatly determine the success of each staffing agency, which means hiring staff members should be a top consideration.

Investing into a staffing franchise with one partner or more is a good way to ensure the main staff has the same level of dedication toward making the business work. This would also divide the initial investment into a more manageable amount for each partner. Of course, this would only work if each partner was equally committed and skilled.

Whatever method or strategy entrepreneurs use to find a quality staff, this is an important consideration to make. Generally, having strong leadership with a committed support staff is the best model.

For example, a staff of three may look like this: one employee is dedicated to facilitating walk-ins and phone calls for employees, another is dedicated to managing employers, and the third (business owner) is dedicated to sales and onboarding new clients. Whatever the strategy, entrepreneurs need to consider where they'll find these quality professionals, how much they'll be paid, and what functions they'll support.

#2. Industry Focus:

Another important consideration for entrepreneurs to make is deciding what industries they'll focus on serving. Although agencies should be willing to work with employers from all industries, their sales and networking efforts can be targeted to specific ones. The industries chosen would depend on labor market demands and the experience and expertise of the owner and staff.

Having a decided focus on specific industries will work to attract both employees and employers in those industries. Exploiting these segments in the community and region will establish leadership and a sustainable flow of applicants and clients. Owners and staff members can attend industry related events and network extensively within these chosen industries, consolidating marketing efforts for optimal results.

#3. Placement Strategy:

Staffing agencies get most of their business from supplying employers with temp workers, so part of the business will always be dealing with temp workers. What entrepreneurs should consider is: how much emphasis will they put on temp-to-hire employees? Basically, what will their placement strategy be?

Placement strategies will differ according to the industries being served; some industries have greater needs for seasonal and project workers, while others just want to outsource their HR departments. Staffing agencies are different from recruitment firms, yet they can specialize in placing temp-to-hire employees (for certain industries) as part of their overall placement strategy.

According to American Staffing Association's “Staffing Industry Statistics” article:

“During the course of a year, America's staffing companies hire 16 million temporary and contract employees.

    • Most (76%) work full time...

    • Half (49%) of staffing employees say it's a way to get a permanent job.

    • One third (35%) were offered a permanent job by a client where they worked on an assignment, and two-thirds (66%) of those accepted the offers of permanent employment.”

Within the staffing franchise system, franchisees have the freedom to specialize in their placement strategies. The members of each franchise have different skill sets and expertise, which should be used as effectively as possible; one franchise may focus on temp-to-hire for professional positions in business, while another focuses on a mix with production and light industrial.

Either way, providing temp or contract workers and outsourced HR department services, will be the main bulk of business for most agencies. Being able to diversify with placement strategies and specialize in certain industries, gives agencies a more sustainable business model despite any fluctuating labor markets.

Summary

Investing into a staffing franchise is a solid choice for entrepreneurs to make; staffing agencies are in a growing and in-demand industry. With growing complexities in hiring practices and shifting labor markets, employers and employees are using job placement services more and more. 

The 3 considerations we've examined will help entrepreneurs start their staffing franchises with rewarding results. The day-to-day workflow in a staffing agency requires a team effort from qualified professionals, and owners need to determine the industry focus and placement strategy for the business to build upon. If interested in learning about Nextaff's staffing franchise opportunity, please contact us today.

 

Categories: staffing franchise