Franchises within the employment & staffing industry list employment vacancies, refer job applicants to potential employers and assist companies with employee recruitment and placement. Some franchises also provide payroll and other human resources assistance.
The growth of the industry has been influenced by many factors. But according to Jason Leverant, President and COO of the AtWork Group, two factors stand out.
The first is generational demand. “Generationally, Millennials are more interested/accepting of flexible/contingent work and indicators are showing that the next generation of the workforce is showing even more interest in controlling their work schedules,” he says.
The second factor, a client mindset shift, is closely related to the generational demand. As Jason says, “Clients have also realized that the benefits of a flexible workforce to balance their staffing with the ebb and flow of their own business models helps them be more efficient and profitable. This mindset shift across the board has really driven consistent growth over the last 10+ years.”
Employment and Staffing Franchises Go Beyond General Placement
Most often, when people think about employment and staffing franchises, they think about generalists such as Express Employment Professionals, NEXTAFF, PrideStaff, and more. However, you can find specialized employment and staffing franchises in virtually all industries.
If looking for a more niche opportunity, broader industry trends can point you towards which areas will grow next.
For instance, according to The Atlantic, healthcare is now the United States’ largest employer. What does that mean for employment and staffing franchises? More employers are looking to engage them to find talent with a healthcare-based skill set.
Currently, healthcare makes up only 8% of overall employment through staffing agencies, per the American Staffing Association. But the growth of the healthcare industry means specialized franchises like ATC Healthcare and BrightStar Care will see—and in cases, have already seen—increased demand for their services. Franchises within this specialty help home care, hospice, and other healthcare companies find nurses, therapists, aides, companions and other healthcare professionals.
Beyond healthcare, the employment and staffing franchise industry has seen the rise of several additional specializations over the years.
For example, NexGoal caters to former Olympic, professional and college athletes, helping them transition into business roles that take advantage of the skills they gained through high-level athletics.
Another specialty employment franchise is Link Staffing, which distinguishes itself from competitors by offering services in the crafts and trades, since “few employment placement services businesses offer services [in this specific area],” according to its franchise disclosure document.
Specializing in one area allows franchisees and their employees to develop the expertise to match applicants for certain jobs to companies quicker than in a franchise than one more general in scope—a huge plus in fields that involve special skills such as healthcare and trade work. And among the positives for franchisees, if clients feel more secure that the franchise knows how to address their specific need, there’s a good chance they can draw repeat and referral business.
Employment & Staffing Franchise Investment Information
Here are a few things to keep in mind as you determine whether becoming an employment & staffing franchisee is right for you.
What kind of person does best in this industry?
“A background in sales or business development always helps someone entering the staffing industry,” Jason Leverant says. “We’ve found that people who have successfully led and motivated teams also work out really well as they can coach/develop their sales/recruiting teams more effectively than most. If you have an outgoing personality and a willingness to work hard to find success then you’ll do great in the staffing industry!”
If you’re pursuing a franchise in the employment and staffing industry, you can’t be afraid of sales and sales-type work. When you boil the industry down to its basic function, franchisees in this industry are B2B sales and consulting companies tasked with building relationships with small and medium-sized businesses in their local communities, and then helping connect job seekers with those businesses.
Don’t be afraid if you don’t have previous human resources (HR) experience.
There are franchises that aren’t necessarily looking for people proficient in HR because they do most or all of the back office tasks while the franchisee focuses on the relationship side of the business.
In fact, as one executive of a prominent employment & staffing franchise once told us, “Candidly, [HR experience] can work against someone if they fashion themselves a HR ‘wonk’ and they want to deal with the administration all day because that’s not what the franchisee spends their time doing. They’re connecting people. We are fancy matchmakers. We just do it with jobs instead of love.”
Keep up with your regulations.
Though the franchisor will help, franchisees are primarily responsible for making sure they are in compliance with all local, state, and federal laws that apply to the operation of an employment & staffing services franchise, including government regulations relating to EEOC, OSHA, discrimination, employment, sexual harassment and more.
In addition, some states require the licensing and/or bonding of agencies in this field along with the agencies’ consultants.
Here are some other laws you might have to adhere to as an employment & staffing service franchisee:
- Federal civil rights laws, including the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA) prohibit unlawful discrimination in classifying and referring applicants for employment. Many state human rights laws have similar regulations.
- The Fair Labor Standards Act, federal, state and municipal minimum wage laws, the Occupational Safety and Health and Immigration laws will apply to the franchise.
- The Federal Immigration Reform and Control Act prohibits companies in the industry from knowingly referring an illegal alien for employment in the United States.
- The Federal Fair Credit Reporting Act has regulations on reference checking applicants for employment.
Franchisees should consult with an attorney concerning these and other local laws and ordinances that may affect the operation of their franchise.
Initial Investment and Opening Costs for Employment & Staffing Franchises
The amount necessary to open a franchise varies depending on the unique business system and execution requirements.
The exact opening costs for a given employment & staffing franchise depends on many factors, including but not limited to: the franchise fee, training expenses (such as travel and living expenses, not the actual training courses), grand opening advertising and marketing costs, the cost for a dedicated office space, and more.
The franchise profiles on our website will present you with a basic range for the initial investment or minimum cash required to open a franchise. But when it comes to finding out the details of an initial investment, the franchise disclosure document is the best place to look. Franchisors offer itemized estimates in their FDD based upon their experience establishing, and in some cases operating, units.
Keep in mind these estimates are just that, though—an estimate. Prospective franchisees should review the figures presented with a business advisor, taking into consideration their unique circumstances, before making the decision to enter into a franchise agreement.