8 Steps for Starting a Staffing Agency in Australia

Australia’s recruitment industry is undergoing a significant transformation after relatively few changes over the past three decades. With 470,900 job vacancies as of August 2022 - up 107.4% from February 2020 - and a 3.4% unemployment rate, recruiter services are in high demand. [1] This gives you a good window to start a staffing agency in Australia.

As employers across industries seek to replace workers or expand employment in certain strategic roles, they are leaning on recruitment agencies and professionals more than before to meet talent acquisition needs in a hyper-competitive labor market. So, to make sure you’re getting a solid head start on your staffing agency journey in Australia, let’s take a look at the steps you should take.

1. Australia Staffing Agency 101: Identify Your Niche

Upon taking your first step, one important piece of advice we’d like to give you is to research the current job market in Australia to identify areas of high demand. Consider which industries are thriving and where there may be a shortage of qualified candidates. This will help you pinpoint a niche that has the potential for growth and success.

Also, consider your own expertise and experience. What industries or job sectors do you have knowledge of? Leveraging your background can give you a competitive advantage and help you establish credibility within your chosen niche. From that point on, research the unique needs and preferences of clients in the Australian market. Are there specific staffing solutions that are in high demand, such as temporary staffing, executive search, or specialized recruitment services? Understanding the needs of Australian businesses will help you tailor your services to meet their requirements.

For a scope of the market by industry, here’s how Australia fares when it comes to the size of employment in each category:

2. Australia Staffing Agency 101: Calculate the Costs

Next, you need to look at the costs of setting up and running your business. This includes planning for the one-time and ongoing expenses, as well as the fee structure to ensure that your business has enough cash flow. Here are some of the major cost categories you need to consider:

Technology Solutions

Any modern recruitment agency needs to invest in software and hardware solutions that can help manage operations, such as a recruitment CRM, an Applicant Tracking System, a payroll system, a website, and a phone system. There is also a cost for internet access, cloud storage, and cybersecurity.

The cost of technology solutions will depend on the features, functionality, and scalability you require. Sometimes it can go over the budget you’ve set and you have to take more time to research the right tools. This will hold you back from pushing your agency forward.

If you’re looking for a ‘bang for the buck’ tool, Manatal can be your answer. Starting at only $15/per user per month, Manatal combines an ATS system and CRM together in a single platform. You can manage your sales pipeline, and establish a strong relationship with clients while taking care of the hiring process in one place. Faster, easy to use, and cost-efficient.

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License Fees and Business Registration

Before you can run a staffing agency legally, you will need to register your business name and obtain an Australian Business Number (ABN). You will also need to secure any necessary licenses and accreditations from the federal government and the industry associations. The cost of these requirements will vary depending on the type and size of your business, as well as the state or territory you operate in.

For example,

• The cost of registering a business name with ASIC is $37 for one year or $88 for three years.
• The cost of obtaining a license from the Fair Work Ombudsman is $1,000 for one. year or $2,500 for three years.
• The cost of becoming a member of the RCSA is $1,100 for one year.

Personnel Costs

The cost you need to keep an eye on closely is the personnel cost. This includes the salaries, commissions, bonuses, and benefits for your employees, as well as the payroll taxes and superannuation contributions. Plus, you need to factor in the cost of hiring, training, and retaining your staff. There is also the cost of outsourcing or contracting any services you may need.

The personnel cost will depend on the number and quality of your staff, as well as the market rates and industry standards. The average salary for a recruiter in Australia is around $5,960 per month or $84,175 per year.

3. Australia Staffing Agency 101: Choose Your Business Model

Once you’ve settled down with the costs, let’s take a look at the business model. This is the factor that will determine how you generate revenue and how you structure your staffing services. There are different types of business models that your agency can adopt, each with its own set of advantages and considerations. Here are some common business models for staffing agencies:

• Contingency Model: The contingency model is a risk and reward system where the staffing agency only receives payment (a contingency fee) if a candidate is successfully placed with a client. This model is suitable for high-volume, low-complexity, and short-term placements, where you compete with other agencies for the same roles. The benefits of this model are that you can attract more clients with no upfront costs, and you can earn high margins if you make many placements. The drawbacks are that you have no guarantee of income, you have less control over the hiring process, and you have lower client loyalty and retention.
• Hourly Model: This is a steady-income model, where you charge a fixed hourly rate for the services you provide. It can be suitable for short-term or temporary staffing needs. However, it may not be as profitable for long-term placements or high-level executive positions. You will have a predictable and consistent revenue stream, you can adjust the rate based on the market demand and supply, and you can build long-term relationships with the client and the candidate. But the downsides are that you have lower margins, you have higher operational costs, and you have more legal and compliance risks.
• Flat Model: The flat model involves charging clients a fixed fee for placing a candidate, regardless of the candidate's salary or the time spent on the recruitment process. This model is suitable for niche, high-complexity, and long-term placements, where you offer specialized expertise and exclusive access to the best talent. The flat model provides certainty in income for your staffing agency and can be appealing to clients looking for budget-friendly staffing solutions. However, it may not be as lucrative for high-paying placements.
• Retainer Model: In the retainer model, your staffing agency receives an upfront fee from the client to initiate the recruitment process and secure their services exclusively. This model is common for executive searches or specialized roles where clients want dedicated attention from the agency. While the retainer model provides upfront income for your agency, it may require a significant investment of time and resources before a candidate is successfully placed.

4. Australia Staffing Agency 101: Set Up Your Agency Website

Setting up a website is a crucial step in establishing your online presence and attracting both clients and candidates. It is where you showcase your services, your niche, your brand, and your success stories. Here are some tips on how you should start your recruitment agency website and the aspects you should consider before diving in:

• Choose a user-friendly website platform: Before you start building your website, consider which website platform will best suit your needs. Platforms like WordPress, Wix, or Squarespace are popular choices for beginners due to their user-friendly interfaces and customizable templates.
• Define your brand identity: Come up with a clear brand identity, including your agency's mission, values, and target audience. Your website should reflect your brand's personality and differentiate you from your competitors.
• Optimize for SEO: To ensure your website ranks well on search engines like Google, incorporate relevant keywords related to the staffing industry and your agency's niche. This will help improve your website's visibility and attract organic traffic.
• Mobile optimization: With the increasing use of smartphones, it's important to have a website that is mobile-friendly and responsive. So, make sure that your web design and content display correctly on all devices to provide a seamless user experience.
• Integrate user-friendly navigation: Make it easy for visitors to navigate your website by organizing your content logically and providing clear call-to-action buttons.
• Compliance with data protection regulations: As a staffing agency handling sensitive personal information, ensure that your website is compliant with data protection regulations like the General Data Protection Regulation (GDPR). Include a privacy policy and secure data encryption to protect user data.
• Invest in professional design: A well-designed website can make a significant impact on visitors and convey professionalism. It’s a good idea to invest in professional web design services to create a visually appealing and functional website that aligns with your brand image.

In order to successfully generate leads for your staffing agency, creating compelling and informative content for your audience is a must. So, start by identifying your target audience (in this case, businesses looking for a staffing agency in Australia) and tailoring your content to address their specific needs and challenges. Whether it's blog posts, whitepapers, case studies, or infographics, make sure your content is valuable, engaging, and relevant to potential clients and candidates in the Australian market. Here’s another good tip; implement a content calendar to ensure consistent publishing and promotion across various digital platforms.

5. Australia Staffing Agency 101: Use Social Media for Branding

Social media is a powerful tool for branding your staffing agency. It can help you reach and engage with your target audience, showcase your expertise and value, and build trust and loyalty. Leveraging social media platforms such as LinkedIn, Facebook, Instagram, and Twitter goes a long way.

Keep in mind that it's important to create a consistent brand voice and visual identity across all platforms. Don’t forget to post regularly, utilize relevant hashtags, and constantly engage with followers through comments and direct messages. These can help you increase brand awareness and attract new clients and candidates. Aside from that, running targeted advertising campaigns on social media can further boost visibility and reach a wider audience.

6. Australia Staffing Agency 101: Choose Management Tools

As a staffing agency, you need to manage various aspects of your business, such as sourcing, screening, hiring, onboarding, payroll, invoicing, and reporting. To do this efficiently and effectively, you need to choose the right management tools that suit your needs and budget. Management tools are software applications that help you automate, streamline, and optimize your workflows and processes. They can also help you improve your communication, collaboration, and compliance.

Here are some factors to consider before investing in the management tools:

• Features and functionality: You need to look for management tools that offer the features and functionality that you need for your specific niche, industry, and size. For example, some common features that staffing agencies need are the Applicant Tracking System (ATS), Customer Relationship Management (CRM), payroll and invoicing system, scheduling and time tracking system, and reporting and analytics system. You can also look for tools that offer integrations with other platforms and apps that you use, such as email, social media, job boards, and accounting software.
• Ease of use and support: One of the key things is that your management tools have to be easy to use and provide support. Avoid tools that have a steep learning curve, require extensive training, or have technical issues. Also, put the tools that offer reliable and responsive customer support, such as phone, email, chat, or help center on top of your list. It’s a good strategy to check the reviews and ratings of the tools online or request a free trial or demo before you buy.
• Cost and value: Look for management tools that fit your budget and offer value for money.  Tools that offer flexible and transparent pricing plans, such as monthly, annual, or pay-per-use are ideal. You can compare the costs and benefits of different tools online, or request a quote or proposal from the vendors

7. Australia Staffing Agency 101: Build a Team

When it comes to recruiting staff for your agency, look for individuals who possess not only the right skills and experience but also share your vision and values. Hiring recruiters with industry knowledge and a strong network can help you source top talent for your clients efficiently. Also, having a support team with expertise in areas such as compliance, HR, and administration can ensure the smooth running of day-to-day operations.

Fostering a positive and collaborative work culture within your team is something you should pay attention to as well. It can lead to higher employee satisfaction and retention rates, which are key factors in the long-term success of your agency. Encourage professional development opportunities and provide ongoing training. This will keep your team up-to-date with industry trends and best practices.

8. Australia Staffing Agency 101: Find Your Clients

After setting up your staffing agency in Australia, the next step is to find clients. One good way to attract them is by networking within the industry and building relationships with businesses looking to hire staff. Attend industry events, conferences, and job fairs to connect with potential clients and showcase your expertise and services. Another key strategy is to utilize online platforms and job boards to advertise your staffing agency and reach a wider audience.

Conclusion

Starting a staffing agency in Australia is challenging but it can be a rewarding and lucrative venture if approached with careful planning and execution. By following the eight steps we have explored above, you can set up your agency with a clear vision, a strong niche, a professional website, a solid team, and a loyal client base.

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Citations:

1. Australian Bureau of Statistics

2.IBIS World

3. Indeed