Have you ever wondered, “How do staffing companies make money?” AtWork provides an insider’s look into the staffing industry, revealing why this business model has the potential to be a profitable venture. Understand what drives their success and how these firms capitalize on their expertise in recruitment.
What is a Staffing Agency?
Staffing agencies put people to work. During an average week, about 2.4 million employees work for staffing agencies, and 73% work full-time, according to the American Staffing Association. Staffing firms act as intermediaries between job candidates and businesses hunting for employees.
They maintain a pool of candidates and match them to job openings based on skills, experience, and fit. Agencies can provide employees to companies temporarily, often to cover seasonal peaks, employee absences, or special projects. Many staffing agencies also help companies fill both temporary to permanent positions, and permanent roles.
Staffing agencies primarily make money through fees related to the placement of workers. AtWork connects more than 40,000 individuals annually with employment opportunities, and businesses with qualified talent. As one of the fastest-growing staffing franchises, AtWork specializes in staffing solutions for the light industrial and office/clerical sectors, including direct hire services for leadership roles.
So, how do staffing companies make money? There are a couple of common revenue streams for the staffing agency business model:
- Markup on temporary employees: AtWork and other staffing agencies charge companies a rate that includes the worker’s pay plus a markup for its services. AtWork handles payroll processing, garnishment management, and more. They take the hassle out of hiring, freeing up the business’ time to focus on strategic planning or growth.
- Placement fees: When a candidate receives a permanent role, the staffing agency typically charges a placement fee. This fee is often a percentage of the candidate’s annual salary and is paid by the hiring company.
Is Staffing a Profitable Industry?
The U.S. staffing industry is forecast to earn $274.6 billion this year and has been rising at a compound annual growth rate of 3.1% over the past five years. Demand for staffing industries is fueled in part by a tight labor market. In June, the U.S. Bureau of Labor Statistics found 35 metro areas with less than 3% unemployment rates. One area adding jobs is warehousing, a large sector of AtWork’s portfolio.
A staffing agency’s profitability relies on operational efficiency. Becoming an independent business owner can be challenging. A staffing franchise, like AtWork, can enhance profitability. Here is how a franchise can help you achieve your financial goals:
- A proven brand with established operations.
- Leverage economies of scale to trim costs.
- Support and guidance from a network of fellow owners.
- Discounts on technology to streamline recruiting and drive growth.
- Receive marketing tools to help raise local brand awareness.
“I have received support from AtWork in areas I never even imagined I would be able to ask for support. From marketing, picking out a sight, filling out paperwork to even understanding the industry,” said Adam Gaffney, an AtWork franchisee in Tallahassee, Florida. “They anticipated my needs and never made me feel like I was not going to be successful.”
AtWork: A Full-Service Staffing Franchise
AtWork opened in 1986 in Knoxville, Tennessee. The staffing agency started franchising in 1992 and now has more than 90 offices nationwide. AtWork is looking for candidates with a sales, staffing, or corporate management background with at least $250,000 in net worth. The initial investment for an AtWork location is $153,500 to $210,500. In addition to tapping the resources of a proven brand and comprehensive support, you will take advantage of lucrative tax credits, and AtWork offers full in-house accounting services, including payroll funding and processing.
For more details on how you can launch a staffing franchise, get started today.
