Running a Staffing Agency:

The Who, What, When, Why, and How

Running a staffing agency in today’s climate can be both rewarding as well as challenging. On the one hand, an increasing number of employers are seeking the services of staffing agencies for difficult-to-fill positions due to a shortage of talent in many industries. Temporary and contract work arrangements are also gaining popularity across North America, creating a prime opportunity for new and established staffing firms alike.

On the other hand, however, this new opportunity has resulted in more competition than ever before among agencies. Staffing firm owners must be able to focus on sourcing quality candidates and generating new business to stay afloat and competitive. In addition, employment laws are constantly changing, leading to more red tape and more risks.

If managed correctly and with the right help, staffing agencies can thrive, but they must be able to overcome significant challenges and roadblocks to do so.

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75% of staffing agency owners expect to grow revenue in 2018.

(Bullhorn, Inc.)

The temporary staffing industry generated $8.1 billion in Canada in 2016.


The staffing industry has been growing steadily by 3% each year.

(Staffing Industry Analysts)

96% of staffing services revenue in Canada comes from BC, Alberta, Ontario, and Quebec.

(Statistics Canada)

Approximately 50% of the temporary workforce in Canada is comprised of professional workers while the other 50% is comprised of commercial workers.


1. The Basics: How to Run a Staffing Agency

iStock-825082464Running a staffing agency might seem simple at first glance, but a lot goes on behind the scenes. It’s more than just sourcing candidates and gaining new clients. From the front office to the back office, from bureaucracy to crises, staffing agency owners have a lot on their plates. Their time is spread thin, and they wear many hats.

With the right knowledge, skills, and expertise, however, you can start a recruitment firm from the ground up and turn it into a successful venture.

The Keys to Starting a Successful Staffing Agency

If you’ve been a staffing employee for a while now, you’ve likely considered starting your own employment services firm. After all, you know the ins and outs of the industry, you have contacts, and you have the experience needed to get started, but it can be tough to give up a steady salary and take the risk needed to begin your new journey as an entrepreneur.

With these tips, you’ll gain the knowledge and confidence you need to take the leap.

Find Your Niche: First, you’ll need to determine the niche you’ll want to focus on. Though it may be tempting to advertise your services to everyone and anyone who requires employees, this isn’t the ideal option. Choosing a niche has many benefits, including targeted marketing, cost savings, greater expertise in a market, and better brand loyalty. You may already have experience sourcing candidates in a certain industry or for specific positions. Start there. Consider if there’s a need for this type of talent in your area. Remember, supply and demand are important to success. If there’s no demand for the market you have experience in, then look at gaps in the market and determine which segments are expected to grow in the future.

Choosing a niche has many benefits.

Know the Requirements: Do your due diligence and research governmental requirements, such as taxing, business licences, workers’ compensation, and more. Start your business on the right foot.

Determine Your Pricing Structure: Many new owners make the mistake of undercutting the competition in an attempt to lure new business away from other agencies. Though this might work for a while, you will eventually need to increase your prices--and risk losing your clients when you do. It’s best to create a sustainable pricing structure that’s fair and competitive. Stand for the value of your services, not the price.

Get Capital: Starting a business always tends to require more capital than entrepreneurs expect. Make sure you have enough money in the bank to pay for your start-up costs, as well as several months’ worth of expenses. Tip: If you start a home-based independent recruitment firm, you can significantly reduce your costs.

Starting a business always tends to require more capital than entrepreneurs expect.

Invest in Technology: You may get by with spreadsheets for the time being, but you’ll soon realize you need more robust technology to successfully run your agency. Consider an all-in-one software program that includes an applicant tracking system (ATS), customer relationship management (CRM), as well as modules for your back office, such as financial reporting.

Secure Insurance: Many clients will expect you to have adequate insurance to protect your workers in case they’re hurt on the job. Seek out an insurance company that understands the staffing industry to ensure your firm, your clients, and your employees are protected in the worst-case scenarios.

Flesh out Your Hiring Process: Employers will want to work with you to find high-quality talent efficiently and effectively. It’s quite easy to find workers to fill roles, but it’s a lot more difficult to find top talent who will be an asset to the organization. To ensure you can compete in this industry, it’s vital that you create an effective, repeatable recruitment and hiring process that works.

Start Marketing: You’ll need to build a roster of top talent before you can start generating new business. You’ll need to start marketing your new staffing firm right away. One of the best ways to increase brand awareness is to head online. Digital marketing is key to success in today’s landscape. Market your new firm on social media, job boards, and forums. Make sure you invest in a high-quality, mobile-friendly website. Today, 94% of job seekers search for jobs via their smartphones. Make it easy for candidates to apply online.

The Day to Day of Running a Staffing Agency

Once your staffing firm is up and running, you’ll start to learn all the common intricacies, hurdles, and challenges that come with running an employment services firm--and how to face them head-on.

A typical day running an agency will require you to wear many hats, take on many tasks you may or may not have expertise in, and problem solve to manage crises and overcome complications. How_Can_We_Weed_out_Bad_Apple_Temp_Agencies_That_Give_the_Industry_a_Bad_NameThough you may have a passion for staffing and an unquenchable drive to succeed, you’ll quickly realize there aren’t enough hours in the day to do it all.

Some of the common responsibilities you’ll be tasked with include:

Candidates: On a daily basis, you’ll need to scour the web and reach out to candidates to find top talent in your market. You may attend job fairs and networking events. Once you’ve recruited new candidates, you’ll be required to review their applications, interview them, test their skills and knowledge, and match them with compatible roles. You will need to maintain ongoing candidate relationships and develop new ones regularly.

Clients: Regardless of how busy you are running your agency, you’ll need to find time for revenue-generating activities. This may involve networking, marketing, and sales activities to find new clients. Once you have clients on board, you’ll need to nurture and maintain relationships with them, answer their questions, appease their concerns, and find them top talent.

Regardless of how busy you are running your agency, you’ll need to find time for revenue-generating activities.

Payroll: Paying your employees on time and accurately is critical to your employer brand and the overall success of your staffing company. Payroll is a time-consuming, recurring activity. It also comes with many risks, such as penalties and audits if you make mistakes.

Accounts Receivable: You’ll need to keep on top of accounts receivable to ensure your clients are creditworthy and to create steady cash flow. From creating invoices to sending reminders for payments, accounts receivable is an often time-consuming task.

Bookkeeping: You’ll need to keep track of your books, from the invoices you send out to clients and the payments you receive to the expenses you pay for rent, supplies, payroll taxes, GST/HST, and more.

Human Resources: HR will be a significant responsibility on your shoulders to ensure you as an employer are compliant with what you need to be to protect yourself. From creating contracts to dealing with health and safety, you’ll need to be on top of it all.

Compliance: Employment legislation is constantly changing in Canada. Once your candidates become employees, you will need to ensure you’re following the rules by having the right agreements in place while staying on top of the ever-changing legislation and training your employees before placements at the clients' sites. You will be required to ensure measures are put in place to reduce risks and implement new processes as required.

Trends: To successfully run a staffing agency, you’ll need to stay on top of both wide-ranging staffing and recruitment trends and those in your niche. Remaining competitive requires being one step ahead of other agency owners, which may mean investing in new technology early, adapting your recruitment processes to job seekers’ evolving behaviours and offering new services. It means you will need to keep track of salary scales, talent shortages, emerging markets, and more.

What’s more, your clients will depend on you for your industry knowledge and expertise, so you’ll need to stay ahead of news in your niche to fulfill your clients’ needs and become their trusted staffing partner.

Everything You Need to Know about Starting a Successful Staffing Firm

2. Why So Many Startup Staffing Agencies Fail

Small businesses are big in Canada. In fact, over 98% of all Canadian companies are considered small businesses with fewer than 100 employees. People start businesses all the time. Unfortunately, nine out of 10 startups fail. Though starting a staffing agency can be a worthwhile venture, it does certainly come with risks. Being an How_to_Strike_out_on_Your_Own_As_an_Independent_Recruiterentrepreneur is tough, and if you’ve given up a steady salary to start your own recruitment company, you want to take every step you can to ensure you succeed.

Learning why so many other startup staffing firms have failed can help you avoid the same fate.

No Market Demand

When it comes to starting a business of any type, you need to ensure there’s demand for your services. If employers don’t require the services you offer, you won’t be able to generate any revenue. Choose your market carefully and determine how much direct competition there is in your area. The market you wanted to dive into might not be the right market to attempt to penetrate.

Pricing Themselves out of Business

Many factors will need to be considered when you determine your pricing structure, including what your competitors are charging, the demand for the candidates you place, your location, the candidate’s skill level, and even the relationship you have with clients. Offering deep discounts to generate more business may mean you don’t make a profit. Price your services too high and you’ll have trouble finding clients who are willing to pay. Pricing your services is a delicate process that needs to be done right the first time around.

Failure to Recruit Top Talent

Without top talent, your startup staffing firm will fail. Employers will be coming to you to do what they can’t--fill their open roles with the best candidates who have the skills and experience they’re looking for. If you’re placing candidates into roles they aren’t qualified for or into companies where they’re a poor cultural fit, you’ll have dissatisfied clients who likely won’t continue to use your services. Before you start your staffing firm, make sure your iStock-869437538recruiting and hiring process is flawless. Also ensure you’re reaching a wide enough pool of candidates to find top talent. Give priority to the candidate experience, so great candidates will want to work with you. And always ensure you’re following up on references and background checks.

Without top talent, your startup staffing firm will fail.

Poor Cash Flow

Cash flow is the lifeblood of any business. In fact, 82 percent of business ventures fail due to poor cash flow. Unfortunately, times are even tougher in the staffing industry, where staffing agency owners face upside-down cash flow. While you need to pay your bills and your employees every two weeks or every month, your clients may not pay for 30, 60, or 90 days after services are rendered. You may have large gaps between when expenses are due and client invoices are paid. That’s why payroll funding is so important: It can help you make up for these gaps and avoid cash flow problems from the start.

Legal Compliance

Compliance is a big headache for most staffing firms, whether they’re startups or established agencies. Issues ranging from employee misclassification to health and safety, and employment standards to taxes, have taken down many thriving recruitment companies. When it comes to legal compliance, passing knowledge won’t cut it. You need expertise in staffing laws and employment regulations to avoid the penalties and lawsuits that might potentially sink your agency.

These are just some of the common reasons why startup agencies fail. Taking the time to create a solid business plan and getting the right third-party support can help you avoid the fate of so many other failed staffing firms.

Things You Need to Know When Starting a Temp Staffing Agency

3. 5 Unique Challenges Independent Staffing Firms Face & How to Solve Them

National staffing firms seem to have endless resources, personnel, and budgets. Independent staffing firms, on the other hand, typically work in small teams and take care of all aspects of running the agency on their own. There never seem to be enough hours in the day to maintain client relationships, recruit candidates, and take care of the time-consuming back office.

There never seem to be enough hours in the day to maintain client relationships, recruit candidates, and take care of the time-consuming back office.

It’s clear that independent staffing companies face unique challenges that many larger firms don’t struggle with, but there are steps that can be taken to overcome them.

1. Financial Instability

When you first started your staffing firm, you likely had to pay for start-up costs out of pocket, with a bank loan, or perhaps with the help of investors. Back then, you probably thought your cash flow problems were a short-term challenge to overcome. Soon, you’d be building your client base, sending out invoices, and getting paid.

It probably didn’t take long to realize cash flow is a common challenge that continues long after you’ve established your brand and your agency. Clients may not pay you for your services. They may pay late. But at the same time, you need to keep paying your expenses and your employees.iStock-839628666

Left unresolved, cash flow issues can grow while your business is growing, but you can overcome it. Instead of taking out a bank loan with a high interest rate, consider a back office payroll service that can offer to finance your payroll costs while waiting for your clients to pay for services. You should also try to build up an emergency fund to help with the ebbs and flows of the industry, and you should always be looking for new clients.

2. Building a Reputation

When you’re running a small operation, it can be difficult to get clients and candidates to choose to work with you over your competitors. How can you stand out? In the staffing industry, building a reputation is important to signing clients and candidates. Your competitors may have more years in the business or may be better known, but that doesn’t mean you can’t compete.

From the moment you open your doors, you’ll need to work on building your great reputation. Market your business everywhere and anywhere your target market might be. Network as much as possible, both offline and on. As time goes on, ask clients and candidates for referrals, and give them incentives to do so. Ask them for testimonials or to leave a positive review of your agency online. Most importantly, treat your clients and candidates like VIPs. Focus on delivering great customer service, and you’ll start to build a great brand people want to be associated with.

3. Making Time for It All

You got into the staffing industry because you had a passion for helping others, working with clients, and helping candidates find jobs, yet you’re spending most of your time on administrative tasks and mitigating risks. As an independent staffing company, you don’t have a large team of HR professionals, recruiters, sales reps, marketers, payroll administrators, and compliance experts on staff. You likely spend more than 40 hours a week trying to make payroll on time, trying to reply to all candidate inquiries, and trying to stay on top of your books, the trends, and your paperwork on your own.iStock-804988546

You might feel like you’re going to burn out soon. The good news is you don’t have to do it all on your own. Even if you’re a one-person team, you can get the help you need by outsourcing non-revenue-generating tasks. HR, payroll, bookkeeping, and compliance are good options to consider outsourcing. When you send these tasks out of house, you’ll have the time you need to get back to the work you love--servicing clients and customers. The tough stuff is handled expertly while you get your time back.

4. Lack of Expertise In-House

You may be an exceptional salesperson or recruiter. You know how to build and maintain solid relationships with clients and candidates--and you love doing it. What you might not be so good at, however, are the other tasks you’re required to manage as an independent staffing firm.  Human resources, compliance, payroll, and bookkeeping, for example, are critical aspects of running a staffing firm, but they require a certain level of expertise.

You may do your best, but do you know all the intricacies of payroll and taxes? Do you keep up to date on changing legislation to ensure you’re in compliance at all times? Do you know which business expenses you can claim? Can you create legal documents that can stand up in court? If not, you’re not alone. And there’s no shame in that. We all have our strengths and weaknesses. What’s important is to get the support for these tasks to ensure you don’t face penalties and audits, you don’t make costly legal mistakes, and you don’t put your agency at risk. Again, outsourcing these tasks is the best option for independent staffing companies.

5. Lack of Technology

National firms may be able to afford top-of-the-line technology for applicant tracking, client relationship management, payroll, bookkeeping, and more, but as a small operation, you may not have the budget. Unfortunately, without the right technology, you will end up spending more time on administrative tasks, face more human error, and reduce the productivity and efficiency of your agency. Investing in staffing agency software is a must today, but if you don’t have the funds to do so, consider partnering with a back office services provider, so you can gain access to the tech you need to succeed.

As an independent staffing firm, you’ll face many challenges that larger firms don’t need to worry about. Though it may seem overwhelming when so many hurdles stand between you and success, there are solutions available to overcome the obstacles in your way.

4. 7 Questions Independent Recruiters Need to Ask before Placing Their First Contract Roles

The majority of independent recruiters specialize in permanent placements. They maintain relationships with passive and active candidates and fill permanent roles for companieiStock-887882750s. Once a candidate is placed, the recruiter then moves on to other placements. However, the employment sector is changing, and temporary and contract roles are becoming more and more popular in today’s world, presenting a great opportunity to build a recurring revenue stream for your independent recruitment business.

As an independent recruiter, focusing solely on filling permanent roles may have worked well for years, but now, you may be noticing more and more of your clients are asking you to find them independent contractors or temporary employees for their workforces. Though you may respond to them that you don’t fulfill these services, you might be wondering whether it’s the right time to start filling contract roles.

You might be wondering whether it’s the right time to start filling contract roles.

Of course, many factors need to be considered before you decide to expand your services, and you likely have many questions to consider before you fill that first contract position, such as the ones below.

1. How Do I Pay These Workers?

When it comes to permanent placements, you don’t need to worry about paying the candidates you place. Once the employee has been hired, your work is done. The company pays the employees moving forward. This isn’t the case for temporary or contract workers. As the recruiter, you will be the one responsible for payroll on a weekly or bi-weekly basis.

What does this mean? You’ll need to pay careful attention to your cash flow, as you will likely need to pay the workers before clients pay their invoices. This could lead to financial instability. You will need to learn how to process payments in the jurisdiction the worker is placed, how to meet CRA requirements, how to process year-end forms, and more. You’ll also need a system in place to process payroll and provide direct deposit.

2. What Is the Cost of Payroll?

To keep your cash flow in check and ensure you’re paying your workers properly, you’ll need to determine your cost of payroll. What are the payroll burdens you’ll face, such as tax remittances? How much time will you need to dedicate to payroll processing each week? Your payroll costs will also differ per position type, by province, etc. There are many factors to consider when it comes to the costs of payroll.

3. How Do I Determine If the Worker Is an Employee or Should Be Treated as an Independent Contractor?

The government is cracking down on the misuse of independent contractors. It’s important to understand which factors determine whether a worker is an employee or contractor, so you can classify them properly for payroll, benefits, workers’ compensation, etc. Misclassifying independent contractors, whether on purpose to save on the costs and burdens of payroll, or mistakenly, can be costly. Not only might you face lawsuits from the employee, but you will also face hefty fines and penalties levied by the CRA.

The government is cracking down on the misuse of independent contractors.

Before placing your first contract role, it’s critical to ensure you have an independent contractor classification system in place, so you can help ensure you’re making the right decisions regarding their employment status. You’ll also need to ensure you’re reviewing statuses on a regular basis.  

4. How Do I Handle Requirements for Workplace Safety?

Workplace safety is a top concern when you become the employer of contract workers on your clients’ sites. You will need to understand what paperwork you need, what insurance you need, and which type of health and safety training is required for the workers.

5. What Paperwork Do I Need?

Offering contract placement services now means going above and beyond an employment contract. You’ll require a master service agreement for clients, independent contractor agreements, employee training, and sign-offs on policies, and more. You need to ensure you’re compliant and protected.

6. How Do I Price These Services?

You likely have standard prices for permanent placements, particularly if you’re frequently placing the same type of position. One consideration you’ll need to factor in before you start filling contract roles is how you’ll price these new services. Not only will you charge for your time and expertise as a recruiter, but you’ll also need to factor in many other costs, such as the worker’s hourly rate, which is known as the pay rate. This cost will go directly to paying the employee you’ve placed.

Further, other costs will go into the markup rate. Besides the cost of your time and service, you should charge for skills testing, background screening, and the other costs of recruitment you incur. Also included in the markup rate will be the cost of due diligence and legislative compliance, as well as government burdens, such as employer portions for EI and CPP contributions. Together, the pay rate and the markup rate is known as the bill rate, which is what you charge clients for your services.

7. What If the Client Wants to Hire the Contractor?

It’s a common occurrence in contract staffing: Your client is so pleased with the contractor’s services that they want to hire them on permanently. What do you do in this scenario? First, such instances should be accounted for in both your employee and client contracts. You should outline what all parties must do in such a situation, as well as your fee for facilitating the process.

These are seven of the most common questions independent recruiters have when determining whether they should start offering contract staffing services. These questions and many more can be answered more in-depth by a back office service provider. Not only will the provider’s experts help guide you through your first contract placement, but they can also take on the burdens of compliance, payroll, human resources, and more, so you can focus on recruitment, rather than stress about logistics.



5. 7 Business Growth Tips for Temporary Staffing Firms


There is quite a difference between running a staffing firm and growing a staffing firm. After a few months or a few years, you may end up stagnating. You have loyal customers and a solid talent roster, but you may not take on much new business. You may not be able to due to limited people, resources, or funds. Going from startup to small business to established staffing firm can be difficult.

There is quite a difference between running a staffing firm and growing a staffing firm.

Fortunately, there are many steps you can take to start growing your temporary staffing agency to compete with large national firms.

1. Automate

All temporary staffing firms, whether they’re just starting out or they’ve been in the industry for 20+ years, should invest in the right software. Today, technology can create efficiencies in all staffing-related tasks—application review, candidate selection, coding for skills, processing payroll, and more. An applicant tracking system can scan resumes, follow up with candidates automatically, score their applications based on uniquely set criteria, and more. Customer relationship management software can help you keep track of your contacts and your communications with them. You can send automated emails and schedule them for later. The software can automatically keep track of your conversations with clients and prospects. Payroll and bookkeeping software make your calculations instantly and automatically.

If you’re spread thin and unable to take on more clients and candidates because you’re spending so much time on administrative tasks, it’s time to invest in automation. It’ll give you back the time you need to grow your staffing firm.

2. Adapt

The staffing industry has evolved dramatically in recent years, and it will continue to change as technology advances, recruitment processes adjust, and candidate and client behaviours and needs evolve. As a staffing agency owner, it’s important to adapt as the industry requires. Using the same processes, the same tech, and the same strategies for years on end will make it more difficult for you to grow. Instead, you’ll stay stuck in the past.

3. Never Stop Selling

When you spend your days answering emails, administering payroll, signing contracts, getting your paperwork in order, and recruiting candidates, it’s easy to forget about selling. This is especially true if you already have a solid customer base you can rely on to maintain your cash flow. Though these clients may pay the bills, you need to keep selling your services if you want to grow. You need net new business.

Make time every day to seek out new business opportunities. This may mean focusing time on your marketing strategy. It might mean going to networking events. It may also mean dedicating more time to cold calls and emails or investing in a sales rep. Do whatever you need to do to get new clients or you’ll stagnate.

Make time every day to seek out new business opportunities.

4. Get Payroll Funding

Many startups and small staffing agencies want to grow but don’t have the financial resources to do so. How can you invest in hiring more employees or spending more on marketing and sales if you don’t have the capital to do so? How can you commit to a client’s request for 200 temporary employees if you don’t have the cash flow to pay these workers?

If you offer temporary staffing services and cash flow is your issue, don’t let money hold you back. You can work with a back office solutions provider who takes care of the costs of payroll so you can focus on sales and service.

5. Offer a Variety of Staffing Service Options

Unfortunately, many staffing agency owners limit their growth opportunities by only offering one type of staffing service. More and more employers are now looking for temporary and contract workers in different ways, and you may lose out on significant business opportunities if you neglect to be creative in how you price and offer your services.

6. Outsource Your Back Office

We’ve already mentioned that automation can save you a significant amount of time that you can then invest in growing your firm. The same is true about outsourcing your back office.

When you’re not spending all your time on non-revenue-generating tasks, you’ll get hours per week back. This is something all temporary staffing agency owners can benefit from.

Your staffing agency needs you at the helm--not in the back working on payroll or HR. By outsourcing your back office, you can get back to strategic thinking and business development.

7. Expand Your Business

If you’re a startup staffing firm, you likely only service one city or perhaps one province. Expanding into other provinces and territories can be overwhelming and complex. After all, every area has its own set of employment laws you’ll need to follow. You may not have the resources to ensure compliance. You may not have the time to research the payroll requirements in every province. If you own an established staffing firm with offices all over Canada, you might think you’ve done all the expanding you can do. Have you considered crossing over the border to service your clients with locations in the US? Though a great opportunity, again, this does come with many legal hurdles that will need to be overcome. After all, you’ll be dealing with the IRS and expected to follow a different country’s laws.

A business expansion can help accelerate your growth plans, but it does come with risks, many legislative obligations, and an investment of time, resources, and money. A back office solutions provider can help you expand nationally or into the U.S. If you’ve been thinking about expanding but have hesitated to do so due to the challenges involved, now’s the perfect time to team up with a back office solutions provider and get started on your expansion plans.

Growing a staffing agency might be difficult, but it isn’t impossible. With the right knowledge and support, you can take advantage of business opportunities that will enable you to grow and reach a new level of success.


6. What Can Staffing Agencies Outsource? 8 Back Office Services

Whether you’ve just started your staffing agency or you own or manage an established recruitment firm, you may need some help with your back office. Falling behind on tasks like payroll, taxes, bookkeeping, HR, and compliance will lead you down a bad road. Though these tasks don’t generate revenue, they are critical to the successful operation of your agency. Your employees want to be paid on time and so do your vendors. You must keep up with accounts receivable to maintain a healthy cash flow. You must stay on top of ever-changing legislature to ensure compliance in all areas of operations. The consequences of neglecting your back office may include fines, penalties, and audits.iStock-881542122

If you’re struggling to keep up with your back office when your focus should be on your sales and service, consider partnering with a back office services provider. Back office tasks are numerous, time-consuming, and often complex. It’s best to leave these tasks to the experts, so you can get back to the work that matters--maintaining client relationships, finding new business, and recruiting top talent.

If you’re struggling to keep up with your back office when your focus should be on sales and service, consider partnering with a back office services provider.

Here are some of the back office tasks you can outsource.

1. Compliance

Compliance is a task virtually all staffing agencies should consider outsourcing. Keeping abreast of changes to employment and business legislation can be time-consuming. There are many laws and regulations you need to keep on top of--from health and safety and employee classification to benefits administration, taxes, payroll, and more. On top of knowing and understanding all relevant laws, you must also implement and modify processes to remain compliant.

Outsourcing compliance is an easy way to ensure your staffing agency is always compliant with the most up-to-date legislature in any province or state in North America, so you can avoid costly fines and penalties.

2. Employee Protection Packages

As the owner of a staffing agency, you’re legally responsible for the health and safety of your employees. Keeping them safe should be top priority, which is why many staffing agency owners outsource the creation of comprehensive protection packages for employees. Your back office service provider can also provide a comprehensive insurance program, as well as a claims management program for your employees.

3. Payroll

Payroll is a never-ending task that gets increasingly time-consuming as your agency grows. Payroll ties up cash flow and limits your ability to grow. The more employees you have on payroll and the more areas you operate in, the more complex the responsibility becomes. A back office services provider can ensure your workers are paid, even when your clients haven’t yet paid for services. Payroll also comes with strict deadlines and requires complete compliance with CRA regulations. It’s best to let the experts handle this task and assist with cash flow.

Payroll is a never-ending task that gets increasingly time-consuming as your agency grows.

A back office services provider is also a great partner to have if you’re looking to expand nationally or to expand to service US clients, both of which come with more difficult payroll requirements.

4. Government Remittances

Government remittances also require you to stay on a strict schedule. Otherwise, you’ll face interest fees, fines, or penalties, all of which can impact your financial resources. The failure to remit on time can also damage your agency’s brand. A back office services provider can take this responsibility off your shoulders and ensure government remittances are accurate and on time.

5. Credit Checks

It’s good practice to credit check potential clients before bringing them on. Untrustworthy clients may pay late or not at all, which can significantly harm your cash flow. A back office services provider can credit check potential clients before you enter into a partnership with them, so you can gain assurances that you’ll receive payments for services rendered.

6. Accounts Receivable

A back office services provider can also take over your accounts receivable, sending branded invoices to clients on your schedule, sending reminders for payments, and collecting money owed. When you’re not chasing after clients for payments, you can focus on your core business.

7. Receivables Insurance

Receivables insurance can protect you from clients who can’t pay or don’t pay when you need them to.

8. Technology

Though not an outsourced service per se, you will be able to take advantage of your partner provider’s state-of-the-art proprietary technology for your front and back office. Why pay for ATS, CRM, and financial reporting software when you can gain access to it as part of your back office outsourcing package?


7. Who Can Help Take Your Staffing Firm to the Next Level?

Every staffing agency owner wants to take their firm to the next level. It’s not as easy as signing on a few new clients and recruiting more talent, however. You need the right infrastructure, the right partners, and the right support to create sustainable growth.

Who can help? A back office solutions provider dedicated to the staffing industry.

Why Work with a Back Office Solutions Provider?

Staffing agencies face many challenges, and they have many unique needs. For instance, payroll is unique in the temporary staffing industry, and compliance can be more complex in this industry than in other sectors. The upside-down cash flow recruitment agencies face is also distinctive.

You have many avenues available to you for support, such as generic software packages, standard payroll providers that service all industries, and bank loans. None of these avenues truly meet the needs of those in the staffing industry. It can be difficult for those outside the industry to understand its intricacies, and many of the services offered by banks, lenders, and providers will fail to provide an end-to-end solution that allows you to focus solely on sales and service in your business.iStock-863497498

A back office solutions provider that is focused solely on servicing clients in the staffing industry is your best bet. These providers are typically founded by former recruiters themselves, so they understand your challenges and opportunities. They also offer the comprehensive services and products you need, so you don’t need to work with multiple providers for payroll, accounts receivable insurance, compliance, and more. Further, these providers can get started right away; they don’t require time to get to know how your staffing agency and the industry work.

How to Choose a Back Office Solutions Provider

Once you’ve crunched the numbers, reviewed your processes, and determined you can certainly use the help and support of a back office solutions provider, it’s time to choose the right partner for your needs.

We’ve already discussed that your partner should be well-versed in the staffing industry so they understand your needs. What else should you look for?

Technology: The right technology can go a long way to improve the productivity and efficiency of both your front office and your back office. The provider should update their technology regularly and offer training to clients, so you can maximize its use. The software platform should help with tasks like applicant tracking, financial reporting, and customer relationship management. Using an all-in-one software can reduce redundancies, save time, and reduce costs.

Outsourcing Services: Ideally, you will want to partner with a provider that offers all the services you need, both now and in the future. Though you might only feel the need to outsource payroll processing at the moment, there may come a day when you’ll want to outsource compliance and human resources as well. Your partner should be able to scale with you.

Ideally, you will want to partner with a provider that offers all of the services you need, both now and in the future.

Additional Services: Beyond core outsourcing services that a provider offers, such as payroll, HR, and compliance, look at the other perks you’ll receive from the partnership. Perhaps you can get a discount on credit checks, background checks, or insurance. You may also get a special rate for different types of software programs, job board services, or support services for being a member.

Reputation: Before you choose a partner, make sure to do your due diligence. Read reviews online, look for testimonials, and ask colleagues and peers for recommendations. You’ll want to partner with a provider that has years of experience, has worked with staffing agencies before, has experts on staff for all core areas of operations, and has a reputation for accuracy, reliability, and excellent customer service.

Relationships: A great service provider will have strong relationships with the CRA, WSIB, and other key agencies and government entities. This ensures they’re current when it comes to legislative changes, they’re always in the know, and they’re true experts in their field.


Starting, running, and growing a staffing agency are no easy tasks. There are many challenges you’ll need to face head-on, many struggles you’ll need to overcome, and many issues you’ll need to solve along the way. But with passion, hard work, and dedication, as well as the right support, you can succeed in the staffing industry, now and in the future. One thing is sure, though: From taking the leap to entrepreneurship to taking your agency to the next level, you’re in for one exciting venture.

Additional Resources


American Staffing Association

Canada Revenue Agency

Entrepreneur | 4 Success Tips from Small Businesses That Are Doing It Right

Fast Company | 4 Ways Staffing Agencies Can Evolve to Survive the New Job Market

Hunted | How to Start Your Own Recruitment Business | 5 Things Every Small Business Owner Must Do in 2018

Medium | Benefits of Back Office Support Outsourcing Services

Staffing Industry Analysts

The Association of Professional Staffing Companies (APSCo)

The Undercover Recruiter | 5 Trends Staffing Firms Are Anticipating with Impact the Industry

Workplace Safety and Insurance Board


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