You’ll want to be as prepared as you can be – and we’re here to help.

If you’re reading this, you’ve probably been (more seriously) considering starting up your own staffing agency in Canada. And to that we have to say… congratulations! You’ve certainly come to the right place to learn about what you need to know beforehand.

Once you’re equipped with the knowledge you need to start your recruitment business, you can feel more confident that you’ll be making the appropriate moves to ensure a successful start-up and to foster continuous growth along the way.

In this article, we’ll cover the following key components needed to start a staffing agency:

  • The Importance of Establishing Your Niche
  • Securing Payroll Funding and Back Office Support
  • Time to Hire: Why Perform Employee Background Checks?
  • Protecting Your Business, Workers and Clients with Insurance
  • Conclusion

The Importance of Establishing Your Niche

The first step to starting up a staffing agency is establishing your niche focus. While it may feel like a better idea to make your business appealable to a broad spectrum of HR clients, specializing in one HR area will be MUCH more conducive to your company’s success – for a number of reasons which we’ll cover below.

Considering your specific strengths and experience will help you to determine the niche market you should be servicing. Once you become an expert in one field (that isn’t too heavily saturated, mind you – research this!), this will open you up to an array of benefits, including

1. Less competition, more clients.

It’s more profitable to appeal to a targeted or specific HR group than to a broader one, because this will give you a tremendous competitive advantage through reducing your competition. You won’t be dealing with so many others in the same industry competing for clients with those specific needs – which ultimately brings more clients to your door.

2. Better business promotion.

Knowing precisely who your clients are will help you to better attract the right people to your business – via targeted online marketing tool apart from organic methods and networking. Once your clients start telling their acquaintances (who are also in your specific HR field) about your services, you’ll see a snowball effect of client growth that will be essential for your success.

3. Higher value.

Focusing on a single area of HR means that you’ll soon become an EXPERT. People want to know that they can trust your company to fulfill their recruitment needs and provide exceptional service – and, possessing a superior level of expertise in their particular industry will give you a competitive edge necessary to prosper.

Securing Payroll Funding and Back Office Support

As the owner of a new staffing firm, you’re going to need access to ongoing funds that you can depend on – and you’re going to need more than you think. You’ll also have a ton of responsibilities that you must keep on top of on a continuous basis. Apart from recruitment which takes up a lot of time and energy on its own, you also need to worry about a number of other back office functions such as payroll management, meeting tax deadlines, keeping detailed records and timesheets… the list goes on.

So how will you be able to stay financially secure through your business’s growth, and how will you be able to manage all of your new responsibilities at once? Well, the answer is simple: You outsource to a back office support team that can provide you with working capital, and take care of all your back office and administrative needs.

Here are some of the services a back office support provider can offer:

1. Payroll funding/financing

One of the largest responsibilities for a staffing company owner is paying your employees on time, every time – despite the nature of clients taking a while to pay you in the HR world. Fortunately for you, outsourced payroll funding will provide your business with the ongoing finances required to thrive.

2. Payroll management

Probably the most time-consuming and stressful of all back office functions, your payroll and finance management duties require you to keep accurate records, make timely payments and stay attentive to the constantly changing tax law. Fortunately, leaving these responsibilities up to a professional and knowledgeable team will free up time and money for you to put into growing your agency.

3. Background Checks

Every new staffing firm owner should be doing what they can to ensure they’re selecting the perfect candidates for the job. Back office support specialists can provide you with peace of mind that you’re building a strong team of honest and qualified employees through performing various types of background checks, which we’ll talk more about in the next section.

4. Workers’ compensation

Workers’ compensation can also be handled of by a team of specialists so you don’t have to worry about this time consuming and meticulous process – which, we should mention is very prone to submission errors (delaying reimbursements even further).

5. Client support

Outsourcing client support or customer service will help your company ensure your clients’ needs are being accommodated promptly, professionally, and in a way most convenient for them – and is more cost-effective than employing a full-time team in-house.

Time to Hire: Why Perform Employee Background Checks?

Congrats! You’ve established a niche market and secured a back office support plan – now you’re ready to start building a quality team.

As you start taking on valuable team members, a wise thing to do is to outsource some background checks to help ensure that each new employee is exactly who they claim to be on paper and during their interview. Because unfortunately, dishonesty is more common than one may think – with 53 percent of resumes and job applications containing some kind of false information, 2012.

There are many different types of background checks that can help you to ultimately prevent employee-associated risks that can land your company in hot water. These include the mandatory identity check to ensure your candidate is who they say they are, an education/credentials check to confirm their professional eligibility for the role, a credit history check to evaluate their responsibility with finances, and a criminal background check to make sure your company won’t become exposed to potentially risky activity.

Your hiring decisions are among the most pivotal decisions you can make for your new business – because aside from you, your team is going to be largely responsible for helping build a successful recruitment company. Also, consider that the average cost of a new hire is a hefty $4,000 – so use this as an incentive to get it right with every professional you choose to bring on board.

Protecting Your Business, Workers and Clients with Insurance

Every new staffing agency owner will need to insure their agency and their workers for financial and legal protection. And while this can be expensive, insurance is a critical component of keeping your entire business secure.

Insuring Your Agency: Your new staffing agency should be insured against any potential lawsuits involving an employee or third party, as well as any damages that may occur to your building or possessions. A back office solutions provider will be able to help you ensure your agency is fully protected.

Insuring Your Workers: Your valuable employees deserve financial coverage should anything happen to them, and you certainly don’t deserve to be held liable in the case of an unfortunate event. Providing health insurance along with paid vacation and other competitive employee benefits creates happier, productive workers.

Keeping Your Clients’ Information Safe: Your clients trust you with their information, but what happens if there is a hack in the system or a data leak? No one is exempt from this sort of problem – and it’s better to be safe than sorry. Keep your clients and their personal information safe, and your business afloat with insurance that will protect your confidential files and data records.

Securing insurance for your agency, workers and operations is one of the first steps you should complete before you begin offering up your services, and a back office support team can help you to ensure you’re not under-insuring or missing any key precautionary measures.


Breathe – you’ve got this.

If there’s one key takeaway from all of this, it’s understanding that as you work to grow your new staffing agency in Canada, it’s OKAY to seek assistance from others – in fact, you absolutely should! Don’t feel like you need to do everything on your own, because you’re going to need professional assistance with many things.

Your new staffing agency is going to require continuous funds to succeed, and mandatory administrative processes will be time-consuming and stressful. Fortunately, there’s a solution to all of this when you outsource to a back office support team. These are experts you can fully trust with your new business, and leaving all of the extra responsibilities to them will give you the time, peace of mind and financial resources you’ll need take your new staffing firm to great heights.

We hope this article has been helpful with answering any questions you may have had about starting up your new Canadian staffing firm. These are the most important initial steps you should make to ensure a successful start and a rewarding, productive journey.

Good luck!