8 Tips for Starting Your Own Staffing Firm

Ritika Strauss

August 20, 2019

Have you ever thought about starting your own staffing agency?

Taking your first step into the world of entrepreneurship can be extremely rewarding. Founding your own firm gives you the opportunity to take control of your career, set your own schedule, and enjoy a more hands-on approach to guiding strategy. You’ll also be able to make a huge impact on your clients’ businesses — and on candidates’ lives.

Whether you’re just starting to explore the idea or are actively planning to start your own firm, it can be helpful to learn from the mistakes and successes of others. To lift the curtain on the staffing agency and help make the leap a little easier, we asked eight staffing experts to share their most valuable tips for budding entrepreneurs.

Here’s what they had to say.

1. Identify your business’s unique competitive advantage

Tip nominated by: Louis Flory, President and CEO of EFFEX Management Solutions

In 2007, Louis Flory left a $250K - $300K annual salary to establish his own staffing firm. Today, his business generates hundreds of millions in annual revenue and has expanded to more than 30 locations across the U.S.

Louis attributes this success to his company’s unique positioning. Operating exclusively in the manufacturing space, EFFEX Management Solutions solves a focused challenge for a wide market.

“The staffing industry is flawed in its traditional model,” Louis says. “That led to my passion for creating a new and improved way of doing business. I was passionate about a new staffing firm model that results in a reduction in turnover and an increase in production efficiency.”

Louis encourages all aspiring staffing entrepreneurs to identify gaps in their target markets.

Develop a service or process that addresses these gaps head-on, then bring your model to market and test it out. If you can solve a core business challenge for a large market, you’ll be in a prime position to grow and thrive.

2. Be data-driven — and bring the right people onboard

Tip nominated by: Abid Hamid, Group CEO of Recruitment Entrepreneur

Since 2013, Abid Hamid’s firm has helped dozens of founders launch their own recruitment startups, so he’s seen firsthand what works and what doesn’t.

Like Louis, he stresses the importance of finding your specific niche, noting that subject matter expertise in a specialized market will help you to gain credibility with your clients and candidates. But if you don’t take a data-driven approach to running your business, you may lose your competitive edge.

“You can be the best there is,” Abid says, “but if you don’t keep on top of the numbers, stick to what you’ve committed to deliver, and track it correctly, you’re leading blind.”

Abid also believes that it’s as important to find great people for your own business as it is to find them for your clients.

“Consistently build your talent pipeline of those you want to attract to the business,” he advises. “You can’t scale a business without great people. The type of person you want to join you can be hard to find, so always be networking and building your connections and following up with contacts.”

3. Don’t be afraid to invest in technology that can help you succeed

Tip nominated by: Andy Shatwell, Managing Director of Charlton Morris

A UK-based executive search firm founded in 2013, Charlton Morris has grown rapidly over the past few years, opening new offices all over the world. And according to Andy Shatwell, none of that would have been possible if the company hadn’t invested in the right tools from the very beginning.

“When we started, we all got LinkedIn Recruiter seats,” he says. “That fired us right to the front of our competition, helping us create processes, advertise jobs, create a follower base, and reach out to prospects. It all started because we went all-in early.”

Andy is still a big believer in pulling the trigger on technology investments. Recently, his team began using a growth analytics platform that helps them foster a data-driven culture. As a result, the team is more engaged and has more visibility into its progress toward targets. Andy was initially unsure what the ROI would be, but he’s pleased he took the leap.

“There’s one surefire way of standing still, and that’s not taking the risk,” Andy says. “Our growth reflects our spend — I tell this to any startup or small business owner. Investing in technology will dictate whether you grow and the speed you grow.”

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4. When facing a downturn, don’t give up — adapt

Tip nominated by: Kenneth Johnson, Founder and President of East Coast Executives

When Kenneth Johnson decided to found his own New York-based recruiting firm in 2001, he felt confident that a bright future was ahead. After all, he already had commitment from a range of big-name clients, including Vanguard, JP Morgan, and Wilmington Trust.

Then, just eight days after Kenneth’s business opened its door, the September 11 attacks struck New York. In the wake of the unprecedented tragedy, all of Johnson’s customers pulled out almost overnight.

“I learned a few lessons in the days after the attack,” Kenneth says. “Never place all of your efforts in a singular industry, never give up, and do everything that you can to help others all the time.”

Before Kenneth even had a chance to really get started, he was forced to pivot his business model. Undeterred, he decided to test a few niche service offerings in the areas of diversity and inclusion.

These tests grew into the core pillars of his business. Today, Kenneth and his team regularly provide consultational support for organizations looking for niche expertise around diversity programs. Their clients have included Tiffany & Co. and The Urban League of Philadelphia. Despite setbacks, the business is thriving.

“Entrepreneurship can be a very rewarding experience,” Kenneth says, “while being very humbling as well.”

5. Stick to your policies and goals

Tip nominated by: Rachel Charlupski, Founder of The Babysitting Company

Early in her career as an entrepreneur, Rachel Charlupski frequently bent her own rules to offer free and low-cost services as favors to friends and family. After a while, though, she realized she was losing money.

“One early lesson that we learned was to stand firm in our rates,” Rachel says. “At the very beginning, everyone was getting a friends-and-family discount. We soon realized we were only discounting our services and value.”

Sticking to her rates and policies paid off. By focusing on customers who recognized her company’s value, Rachel was able to scale steadily and sustainably. Rather than catering to a customer base of friends and family, she now works with sports teams, hotel chains, private homes, and professional associations in several major cities — and business is booming.

6. Tackle a pain point that you care about

Tip nominated by: William Vanderbloemen, Founder and President of Vanderbloemen Search Group

After 15 years as a church employee, William Vanderbloemen was all too familiar with the outdated recruiting processes common in faith-based organizations.

“I thought that the slow, clunky way we found talent was the only way there was,” he says. “I thought it was normal to take nine months finding a student pastor, or 18-24 months to find a pastor.”

It was only after spending some time outside of the church that William recognized this shouldn’t be the norm.

“I spent a brief period of time in human resources at a Fortune 200 company and watched them find their top staff much more quickly, efficiently, and effectively than any church I'd seen,” he says. “And I've seen a lot of them.”

Inspired, he decided to found his own executive search firm in 2008 with the specific goal of addressing this pain point. It’s this sense of prioritization and focus that has allowed his company to grow year after year.

“Everyone told me there was no way I would be successful, because I was introducing a new, unfamiliar, and somewhat expensive solution to the church — historically a late adopting market,” William reflects. “However, I knew that I could provide a priceless solution to an extreme pain point for a demographic dear to me and my personal values.”

Solving a common problem in your target market is one thing. But if it’s a problem you care about and are passionate about solving, you’ll be able to bring a level of empathy that will truly resonate with and uplift your clients — helping you win their trust.

7. Wait until the time is right and stay humble

Tip nominated by: Charley Polachi, Managing Partner at Polachi & Company, Inc.

Charley Polachi knew he wanted to start his own executive search agency, but he was initially hesitant to take the leap. After finishing his MBA and working for two other executive search firms, he decided the time was finally right.

“In my opinion, it takes about five years to really determine if you’ve mastered your craft enough to branch out on your own,” Charley says. “Work hard, and after five years, go for it.”

Charley finally went for it in 1983. Decades later, his agency is a go-to resource for tech companies, private equity groups, and venture capital firms that are seeking executive-level talent.

Despite this success, though, Charley has never reached a point where he has felt invincible.

“I get up every morning and acknowledge that I am only as good as the last project I closed,” Charley says. “The moment you think you’re invincible or you’ve arrived, you’re toast. Keep your humility and keep working hard.”

8. Speak to your family before developing your business plan

Tip nominated by: Simon Clarke, Managing Partner and CEO at Harnham

There are a lot of considerations that need to happen before you start your own staffing firm. But for Simon Clarke, the most important consideration is how it will impact your life financially — and the lives of those around you.

“Business books often overlook the true realities and risks involved in starting your own business,” Simon says. “In particular, the impact it will have on the future security of the ones you love.

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Simon recommends having frank discussions about your financials before making any decisions.

“If you have a partner,” Simon says, “I believe one of the best things you can do at the start of your journey is to sit down with them and consider the minimum income you need now, as well as what the ideal income might look like in the future, in order to support you and your family.

Taking this step won’t just help you avoid disagreements later. It will also help you plan more effectively.

“When you have the minimum figure, you can begin to develop a business growth plan that you will need to implement over the next three to five years in order to reach your ideal income,” Simon says. “By getting this 'contract' in place with a partner about how much of your wealth you are both prepared to risk and what the minimum income is going to look like, you are creating a healthy foundation for the rest of your business planning.”

Follow your passion

Entrepreneurship comes with many ups and downs, and starting your own staffing agency is no exception. Passion will get you far, but you also need to have a strategic mindset and an eye for turning challenges into opportunities for growth. (Having the right resources also helps!)

If you love what you do and are in it for the long haul, this decision can be one of the most rewarding you’ll ever make. Weigh up the pros and cons and think carefully about your competitive advantage, and you’ll be in good stead for a successful future — whatever decision you make.

Co-authored by Samantha McLaren

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Topics: Staffing agencies