Work at Home Idea:
Start a Staffing Service Business
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Whether we're in an economic boom or a downturn, staffing is always a necessary business service. During boom times, companies scramble to find qualified employees as they grow, grow, grow. During slower times, businesses rely on temporary employees because they're unable to commit to hiring full-time staff. And through it all, staffing companies fulfill their needs by finding great workers and taking care of the extensive logistics--interviewing and hiring, payroll, government regulations, insurance and more--associated with hiring employees.
In this guide, you'll find answers to questions like:
- How do you find clients and temporary workers?
- How much should you charge?
- What taxes do you need to withhold?
- What federal and state laws should you be aware of?
- What equipment do you need to start this business?
- How do you manage your finances when you're waiting for your clients to pay you?
If you think you'd enjoy playing matchmaker between companies and prospective employees and the challenges of meeting your clients' needs in a bustling office environment, get started on your way to success by ordering this guide today!
This guide from Entrepreneur.com is necessary before diving into this home business venture.
Book Excerpt
This chapter focuses on the staffing industry and its niche markets. We’ll tell you how some owners of staffing services got into the business, and we’ll help you figure out if this kind of work is a good choice for you. Finally, we’ll discuss the rewards and challenges of the industry and provide suggestions for conducting your own market research.
Sizing It Up
In this section, you’ll learn what staffing services are all about and why the industry has experienced double-digit growth rates in recent years.
What They Are
Broadly speaking, staffing services are all of the following:
Employers: Staffing services take on qualified candidates as employees. Such services not only pay their employees, but also withhold income tax and pay workers’ compensation, disability and unemployment insurance. An increasing number of staffing services also provide benefits like vacation, personal time, health care and retirement plans.
Businesses: All companies have clients and products. In the staffing industry, clients are the companies that contract for labor or expertise, and the product is that very labor or expertise. The more skills workers possess, the better the products these staffing services are able to provide for their clients. As with any corporation, staffing services are in business to make money, which they do either by adding their markup to all labor charges or by charging clients a finder’s fee. Some services use a combination of these strategies.
Contractors: Temporary help and staffing services provide business organizations with employees for positions in all sectors of employment, from industrial to clerical to professional. In other words, staffing services match employees to client companies.
What They’re Not
Staffing services are neither employment agencies nor professional employer organizations (PEOs). Although distinctions are blurring between the three types of companies, in most cases you will still find the following differences:
Employer status: Staffing services are employers, while employment agencies and PEOs are not. When a staffing service sends an applicant to a company, the applicant becomes an employee of the staffing service, which assigns its employee to the client company for a specified length of time. On the other hand, once an employment agency matches an applicant to a company, the applicant becomes an employee of the company. PEOs typically take over the human resources functions of a company (e.g., payroll, insurance, etc.), leasing employees back to that company.
Service offerings: Increasingly, lines are blurring between the three different types of companies in terms of the services they provide. However, staffing services offer training more consistently than the other two. Employment agencies still handle the majority of permanent placements. Finally, most PEOs are still, first and foremost, human resources specialists.
Recruiter status: Both staffing companies and employment agencies recruit workers. Traditionally, PEOs have not handled recruiting but have instead taken charge of existing company employees, leasing them back to the company. Increasingly, however, PEOs have begun to offer recruiting services in addition to payroll, screening and other more traditional services.
Fee assessment: Staffing companies usually charge clients an hourly rate that includes labor plus a markup. Those that do temp-to-perm placement or permanent placement charge fees for that service. Employment agencies charge companies one-time fees for finding applicants. Of the three entities, employment agencies are the only ones that collect fees from applicants (although not all agencies do so).
Legal status: Many states have no licensing requirements for staffing services. On the other hand, since employment agencies often collect fees from the applicants they place, these agencies are required to be licensed. Depending on the state, PEOs generally fall somewhere in between.
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This guide from Entrepreneur.com is necessary before diving into this home business venture.
Disclaimer: The information presented and opinions expressed herein are those of the authors
and do not necessarily represent the views of Work-at-Home-Business.com and/or its partners.
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