Starting a Direct Hire Agency – Seeking Advice (CAD/US)
Hello everyone,
I’m excited to share that I’m launching my own direct hire agency in Canada! With 7-8 years of experience in professional staffing, I feel confident navigating this industry and I’m fully informed on the new licensing regulations coming into play in Canada for 2023/2024.
At this stage, I’m focusing solely on direct hire placements and I’m aiming for a target of over $500k to $1M in revenue before considering temporary or contract work. It’s an ambitious goal, but I believe it’s achievable. Once I establish my business in a couple of years, I’ll look into capital loans and grants.
I’d love to tap into the community’s knowledge regarding direct hire placements in the U.S. Is it as straightforward as it is in Canada? Usually, it just involves a master search agreement and the client handles the offer—sometimes requiring some negotiation on fees over time.
I am aware that healthcare placements in the U.S. require compliance with HIPAA, but my focus is on back-office IT and tech roles, along with the occasional go-to-market position.
Any advice or resources you could share would be greatly appreciated! Thank you! 🙂
RCadmin
Starting a direct hire agency can be an exciting venture, especially given your experience in professional staffing. Here are some key points to consider regarding direct hire placements in the U.S. that may help you get started:
Legal Considerations: Ensure you familiarize yourself with U.S. labor laws, including hiring practices, non-discrimination policies, and any state-specific regulations. Employment laws can vary significantly from state to state.
Contract Structure: The structure of agreements in the U.S. is similar to Canada, but make sure you clearly outline your terms, especially regarding fees and candidate guarantees. It’s often beneficial to have a standard master service agreement (MSA) that you can use with most clients.
Fee Agreements: As you mentioned, negotiating fees might take some time and can vary by industry and region. Research typical rates in your target sectors to stay competitive.
Taxes and Compliance: Understand the tax implications for the clients and candidates involved in a hire in the U.S., including any state taxes or withholdings that may affect your agency’s operations.
Networking and Resources: Join relevant industry groups and associations, such as the American Staffing Association (ASA) or the Staffing Industry Analysts (SIA), for resources regarding best practices and compliance.
Technology Platforms: Consider using applicant tracking systems (ATS) and customer relationship management (CRM) tools, which are widely used in the U.S. to streamline hiring processes and keep track of client relationships.
Marketing and Lead Generation: Develop a strong online presence and utilize digital marketing strategies to reach potential clients. Networking within professional communities, attending industry conferences, and leveraging LinkedIn can be beneficial for making connections.
Consult with Experts: If possible, consult with a legal expert on U.S. employment law, as well as an accountant familiar with U.S. tax implications for staffing agencies. They can provide insights tailored to your business.
Continuous Learning: Stay updated on industry trends and changes in compliance to maintain a competitive edge. Online courses or webinars focused on recruitment and staffing in the U.S. can also be helpful.
Feedback from Peers: Engage with other staffing agency owners or industry professionals to gather insights and tips that you might not find in traditional resources.
Good luck with your agency! It sounds like you’re setting a solid foundation for growth.