How to Start a Nursing Staffing Agency: Step-by-Step Guide

Healthcare facilities globally, and particularly within the United States, continuously seek agile solutions to manage their workforce and adapt to varying patient care requirements.

Fueled by ongoing demand within the expansive healthcare sector, establishing a well-planned nursing staffing agency provides a strategic entry into a market defined by substantial growth and a consistent need for skilled professionals. Read on to discover how to start a nursing staffing agency and build it into a successful business.

Understanding the Nursing Staffing Market Opportunity

Market Size and Growth Projections

The healthcare staffing market shows strong growth, highlighting its long-term potential and the opportunities it presents. The global healthcare staffing market is predicted to grow from an estimated USD 42.27 billion in 2024 to an impressive USD 82.92 billion by 2034, showing a robust compound annual growth rate (CAGR) of 6.97% [1]. This steady increase indicates a continuous need for skilled healthcare professionals worldwide.

In the United States, this market is expanding even more significantly. The U.S. healthcare staffing market is expected to increase from USD 19.5 billion in 2024 to USD 34.09 billion by 2034 [2]. This growth is largely due to a rising reliance on flexible staffing models, which help manage changing patient numbers and ongoing staff shortages.

A key part of this market, per diem nurse staffing (nurses hired for specific shifts), is projected to grow from USD 15.99 billion in 2025 to USD 22.30 billion by 2030 [3]. This growth in per diem services emphasizes the critical and ongoing need for on-demand nursing solutions in healthcare institutions.

Industry Trends Driving Demand

Several important factors contribute to the ongoing and increasing demand for nursing staffing services. A primary driver is the projected shortage of 78,610 full-time Registered Nurses (RNs) by 2025. This significant deficit creates extensive opportunities for staffing agencies to serve as crucial links, filling important workforce gaps within the healthcare system. This shortage is made worse by an aging nursing workforce, higher retirement rates, and more complex patient needs.

The global population is getting older, which directly leads to more chronic diseases. This demographic shift increases the demand for healthcare services, requiring more nursing support to handle increased patient numbers and the complexities of care. As a result, there is a consistent and growing need for professional staffing.

Additionally, the healthcare industry has increasingly adopted flexible workforce models. These models offer advantages such as better cost management, access to specialized skills, and quick responses to changing patient needs. Hospitals alone make up 42.05% of the market share within the healthcare staffing sector, with Registered Nurses accounting for a substantial 62.34% of total staffing billings [4]. These statistics highlight the vital role of nursing professionals in today's staffing landscape.

7 Steps to Launch a Nursing Staffing Agency

1. Pre-Launch Planning and Market Research

Defining Your Niche in Nursing Staffing

Choosing a clear niche is essential for a nursing staffing agency to build specialized expertise and stand out from competitors. Potential areas for specialization include, but are not limited to, critical care, emergency medicine, surgical services, pediatrics, geriatrics, and psychiatric nursing. Each specialty requires specific knowledge of nursing qualifications, facility requirements, and adherence to specific rules.

Different staffing models meet a wide range of market needs and client preferences. Travel nursing, which holds an impressive 45.30% of the market share, involves placing nurses in temporary assignments across various geographical regions. Per diem staffing provides healthcare facilities with on-call nursing support to manage changing patient volumes effectively. Locum tenens arrangements facilitate temporary placements for doctors and advanced practitioners for set periods, while permanent placement services focus on direct, full-time hiring.

The strategic choice between offering temporary, permanent, or contract placements greatly affects how your agency operates, generates revenue, and interacts with clients. Temporary placements usually bring in ongoing revenue through hourly rate markups, while permanent placements often involve a one-time fee upon a successful hire. Contract arrangements can combine elements of both models, depending on their duration and specific terms.

Understanding your target market requires a thorough analysis of local healthcare facility needs, regional nursing shortage patterns, and the current competitive environment. Geographic considerations include differences between urban and rural markets, the number of healthcare facilities, and state-specific licensing requirements that directly influence how easily nurses can move between areas.

Skills Assessment and Industry Knowledge

Foundational skills for successfully running a nursing staffing agency include strong recruitment expertise, deep knowledge of the healthcare industry, and exceptional relationship-building abilities. Recruitment expertise covers effective ways to find candidates, advanced interviewing techniques, objective skill assessment, and accurate candidate matching based on qualifications and specific client needs.

Healthcare industry knowledge requires a thorough understanding of nursing credentials, certifications, and specialization requirements. Different nursing roles naturally need specific educational backgrounds, clinical experience levels, and commitments to ongoing professional development. Knowledge of healthcare regulations extends to following Joint Commission standards, Centers for Medicare & Medicaid Services (CMS) requirements, and relevant state nursing board rules.

Exceptional relationship-building skills are critical for both attracting top nursing talent and securing valuable client accounts. Building trust with nursing professionals requires a deep understanding of their career goals, work-life balance preferences, and professional development needs. Strong client relationships depend on demonstrating consistent reliability, ensuring strict quality control, and providing highly responsive service.

Being familiar with the persistent nursing shortage challenges helps in identifying market opportunities and developing targeted, effective solutions. Understanding workforce dynamics involves recognizing generational differences among nursing professionals, considering various career stages, and analyzing factors that influence job satisfaction and retention.

Knowledge of diverse healthcare settings ensures appropriate candidate placement and superior client service. Hospitals, outpatient clinics, long-term care facilities, and home health agencies each have unique operating environments, patient populations, and regulatory frameworks that directly influence nursing staff requirements and placement criteria.

2. Business Structure and Legal Requirements

Choosing Your Business Entity and Registration

Carefully choosing the right business structure directly affects liability protection, tax obligations, and operational flexibility. A Limited Liability Company (LLC) generally offers straightforward operations while effectively protecting personal assets from business debts. Corporations provide better liability protection and potential tax advantages but usually require more complex management structures. Partnership arrangements may suit businesses with multiple owners, requiring careful thought about how liability is shared among partners.

Business registration involves filing with relevant state agencies and obtaining a federal tax identification number (EIN). State-specific requirements typically include submitting articles of incorporation or organization, appointing a registered agent, and paying initial filing fees. The EIN is essential for all federal tax reporting and payroll processing.

Liability protection considerations include professional liability insurance, general liability coverage, and errors and omissions insurance. Nursing staffing agencies face potential liability from the actions of their placed nurses, client satisfaction issues, and failure to comply with regulations. Comprehensive insurance coverage is vital to reduce financial risks from these various operational issues.

Business insurance requirements extend beyond liability to include workers' compensation, cyber liability, and business interruption insurance. Workers' compensation specifically covers injuries sustained by nursing staff during their assignments, while cyber liability protects against data breaches and technology security incidents. Business interruption insurance offers crucial financial protection during unexpected operational disruptions.

Healthcare-Specific Licensing and Compliance

Nursing staffing agencies must obtain industry-specific licenses, which vary significantly by location and the types of services offered. Many states require specific staffing agency licenses or registrations especially for healthcare placements. Additionally, some areas require surety bonds or financial guarantees to protect both clients and nursing professionals from potential agency failure or misconduct.

Healthcare staffing regulations cover multiple critical compliance areas, including employment law, healthcare-specific statutes, and strict professional licensing oversight. Compliance mandates include maintaining up-to-date nursing license verification systems, implementing thorough credentialing processes, and adhering to healthcare facility accreditation standards, such as those set by The Joint Commission.

Background check and credentialing requirements for nursing professionals typically include comprehensive criminal background checks, drug screening, thorough education verification, and license validation. Healthcare facilities increasingly demand extensive background checks that cover many years and jurisdictions. Certain specialized positions may require additional screening, such as tuberculosis testing, immunization record verification, and professional reference checks.

Professional indemnity coverage and strong liability insurance are essential safeguards against potential claims related to nursing professional conduct or placement issues. Coverage limits and policy terms must closely match client contractual requirements and prevailing industry standards. Many healthcare facilities specify particular insurance coverage levels or require additional insured status on agency policies.

Joint Commission standards and healthcare facility accreditation requirements greatly influence staffing agency operations and quality control protocols. A thorough understanding of these strict requirements is essential to ensure that all nursing placements meet both exacting facility expectations and critical regulatory compliance benchmarks. Accreditation standards carefully address competency verification, continuing education mandates, and performance monitoring protocols for all placed staff.

3. Financial Planning and Capital Requirements

Startup Cost Analysis

Starting a nursing staffing agency requires a significant financial investment, with startup costs typically ranging from $16,000 to over $1 million, largely depending on the agency's planned size and service offerings. A minimal initial investment may be enough for home-based agencies targeting local markets. Conversely, larger operations aiming to serve multiple markets or highly specialized nursing sectors will need significantly higher capital to build strong infrastructure and reach a wider audience.

Initial expenses commonly include office setup, essential technology, licensing fees, insurance premiums, and strategic marketing investments. Office setup costs vary based on location and facility needs, ranging from a dedicated home office to a commercial space. Technology infrastructure includes crucial staffing software, reliable enterprise communication systems, and critical data security solutions.

Working capital often represents the most substantial financial requirement for staffing agencies, mainly because payroll needs to be funded between client payments. Healthcare facilities frequently operate on payment cycles ranging from 30 to 90 days, requiring agencies to pay nurses promptly while waiting for client payment. Therefore, adequate working capital is crucial for maintaining operational stability and effective cash flow management.

Cash flow considerations include careful management of accounts receivable, precise payroll timing, and proactive management of seasonal demand changes. The medical staffing agencies often see increased demand during flu seasons, holiday periods, and summer vacation schedules. Strategic financial planning for these fluctuations is essential to maintain enough cash reserves and ensure continuous operation.

Funding Sources and Financial Management

Various funding options are available for aspiring nursing staffing agencies, including personal investment, traditional bank loans, Small Business Administration (SBA) loans, and investor funding. Personal investment allows for complete ownership control but requires substantial personal financial resources. Bank loans provide access to capital while preserving ownership, yet they require a strong credit history and a well-articulated business plan.

SBA loans often offer favorable terms and lower down payment requirements for eligible businesses. Specific SBA loan programs designed for service businesses may provide suitable financing structures for staffing agency operations. Investor funding can provide significant capital but typically involves giving up some ownership and potentially sharing operational control.

Maintaining enough cash reserves for payroll is a critical financial management necessity. Industry best practices suggest keeping cash reserves equal to 60 to 90 days of payroll obligations to ensure uninterrupted operations. These reserves act as an essential buffer against client payment delays, seasonal demand variations, and unforeseen operational challenges.

Efficient billing cycles and strict accounts receivable management greatly impact cash flow and operational stability. Establishing clear payment terms, implementing streamlined invoicing processes, and maintaining proactive collection procedures are vital for optimizing cash flow. Some agencies use factoring services or invoice financing to speed up cash flow from accounts receivable.

Profit margins in nursing staffing typically range from 15% to 30%, influenced by service specialization, market conditions, and operational efficiency. Higher margins are often linked to specialized nursing skills, underserved rural markets, or premium service offerings. A clear understanding of expected margins is crucial for setting competitive pricing strategies and accurate financial projections.

Specialized financial management software and accounting systems designed for staffing agencies provide essential tools for tracking profitability, managing payroll, and monitoring KPIs. Integration capabilities with other business systems ensure accurate financial reporting and comprehensive operational visibility.

4. Technology Infrastructure and Software Selection

Essential Staffing Software Systems

A modern nursing staffing agency requires strong technology to manage its complex operations as efficiently as possible. Applicant Tracking Systems (ATS) like Bullhorn or Vincere are central to candidate relationship management and recruiting, offering centralized databases for nurse profiles, qualifications, and availability. These systems must be able to handle healthcare-specific data requirements, including critical license verification, credentialing status, and specialized certifications.

CRM systems enable smooth client interactions, track business development activities, and carefully manage contractual relationships. CRM platforms specifically designed for staffing agencies include features for tracking opportunities, comprehensive client communication histories, and precise monitoring of service delivery. Integration capabilities with other business systems provide a complete view across all client relationships and service execution.

Payroll and billing software for nursing staffing needs include complex rate calculations, various pay structures, and seamless integration with timekeeping systems. Healthcare staffing often involves premium rates for overtime, holidays, and highly specialized skills. Billing functions must accommodate different client billing arrangements and provide detailed reports for transparent financial oversight.

Advanced scheduling and shift management capabilities are critical for efficient coordination of nursing assignments, accurate matching with client requests, and optimal management of candidate availability. Modern scheduling systems offer real-time visibility into staffing coverage, automated notifications for schedule changes, and mobile access for nurses working in the field.

Communication and Remote Operations Setup

Effective communication systems are essential for nursing staffing agencies, especially those operating across multiple locations and serving diverse client needs. VoIP phones provide cost-efficient business phone systems with advanced features such as intelligent call routing, call transcription, and seamless integration with CRM systems like Salesforce, Hubspot, and more.

Contact center software capabilities allow for the efficient management of high call volumes from both nursing candidates and healthcare facility clients. Features like IVR, ACD, and omnichannel contact center software ensure professional service delivery across all communication channels.

Video conferencing capabilities facilitate remote interviews, client meetings, and critical training sessions. Integration with scheduling systems and candidate management platforms streamlines the interview process and significantly improves the overall candidate experience. Mobile applications provide essential on-the-go access to critical information and communication tools for efficient nursing staff management.

Ringover, a leading provider of AI-powered communication platforms, offers solutions specifically designed for staffing agencies. Its innovative system includes advanced call recording, precise transcription, and insightful conversation analysis capabilities. These features integrate seamlessly with applicant tracking systems and CRMs, delivering actionable insights from every call and empowering recruiters to operate across multiple devices with comprehensive data visibility.

5. AI and Technology Integration in Nursing Staffing

Implementing AI-Driven Recruitment Solutions

The use of artificial intelligence is transforming nursing staffing operations through automated candidate screening, intelligent matching algorithms, and advanced predictive analytics. AI-powered screening tools efficiently analyze nursing resumes, identify highly qualified candidates, and rank applicants based on facility-specific requirements and preferences. This significantly reduces manual effort and increases recruitment accuracy.

With Empower by Ringover, agencies gain powerful conversation intelligence that analyzes calls with candidates and clients to extract key insights. Recruiters can identify candidate motivations, detect engagement levels, and refine communication strategies–all backed by AI-driven analysis. This helps staffing agencies elevate their decision-making and tailor recruitment efforts to facility-specific needs.

Predictive analytics applications accurately forecast future staffing needs by analyzing historical data, seasonal trends, and facility-specific operational factors. These insights enable proactive recruitment strategies and improve service delivery through anticipating staffing needs. Machine learning algorithms continuously improve prediction accuracy through repeated data analysis and pattern recognition.

Automated resume parsing systems expertly extract relevant information from nursing applications, standardize data formats, and efficiently fill candidate databases. Natural Language Processing (NLP) capabilities accurately identify skills, certifications, and experience levels, thereby minimizing manual data entry requirements and improving data quality.

Chatbot implementations effectively manage initial candidate and client interactions, answer frequently asked questions, and collect preliminary information before human involvement. AI chatbots operate continuously, enhancing response times, significantly improving the candidate experience, and reducing administrative costs. For example, Ringover's AI Assistant supports initial candidate and client interactions. Acting as a 24/7 virtual assistant, it answers common questions, collects essential information, and streamlines the prequalification process before recruiters step in. This not only improves response times and candidate experience but also lowers administrative overhead, freeing recruiters to focus on high-value tasks like interviews and relationship-building.

Together, AI tools, Empower by Ringover, and Ringover's AI Assistant help nursing staffing agencies scale operations, improve placement accuracy, and deliver a more responsive, tech-driven experience for both candidates and clients.

Advanced Staffing Technology Features

Data-driven insights are crucial for optimizing recruitment processes through comprehensive performance analysis, strict tracking of candidate success metrics, and precise measurement of client satisfaction. Advanced analytics identify key factors contributing to successful placements, nurse retention, and client satisfaction, guiding strategic recruitment adjustments and continuous service improvements.

Automated scheduling systems skillfully coordinate complex nursing assignments, manage shift preferences, and optimize staffing coverage across multiple healthcare facilities. Integration with facility management systems provides real-time visibility into staffing needs and facilitates automatic notification of schedule changes or urgent requirements.

Performance tracking and KPI monitoring offer critical operational visibility, allowing for the precise identification of improvement opportunities. Key metrics include candidate placement rates, client satisfaction scores, time-to-fill statistics, and revenue per placement. Dashboard interfaces provide real-time operational performance metrics and facilitate trend analysis for proactive management.

Integration capabilities with healthcare facility systems enable seamless data exchange, automated credentialing verification, and streamlined onboarding processes. Electronic Health Record (EHR) integration facilitates precise candidate qualification matching and significantly reduces administrative burdens for both staffing agencies and healthcare facilities.

6. Building Your Nurse Recruitment Network

Sourcing and Attracting Nursing Talent

Developing a strong database of highly qualified nursing professionals requires diverse recruitment strategies and ongoing relationship building. Successful agencies typically use multi-channel approaches, including online recruitment platforms, professional networking initiatives, and strategic partnerships with respected educational institutions.

Collaborations with nursing schools and certification programs provide direct access to new graduates and individuals seeking continuing education. These partnerships allow for early candidate identification, coordination of valuable internship programs, and the continuous development of a vibrant talent pipeline. Alumni networks from nursing programs often represent an invaluable recruitment channel for experienced professionals.

Online recruitment channels include specialized healthcare job boards, prominent professional networking platforms (e.g., LinkedIn), and targeted social media recruitment strategies. Healthcare-specific job boards effectively attract qualified nursing candidates actively seeking employment opportunities. Professional networking platforms facilitate crucial relationship building with nursing professionals and broader industry contacts.

Referral programs encourage existing nursing staff to recommend qualified colleagues and professional contacts. Referral incentives may include monetary rewards, opportunities for professional development, or recognition programs. Successfully implemented referral programs consistently generate high-quality candidates through trusted professional relationships.

Social media recruiting strategies, specifically tailored for healthcare, use professional platforms, nursing-focused communities, and specialized interest groups. Content marketing approaches involve sharing industry insights, career development resources, and success stories to attract top nursing professionals and enhance the agency's reputation as a preferred employer.

Credentialing and Verification Processes

Comprehensive credentialing processes are essential to ensure that nursing professional qualifications meet strict healthcare facility requirements and regulatory standards. Required nursing credentials include current licensure (which may involve multi-state verification), specialty certifications, and thorough documentation of continuing education. Multi-state license verification is particularly critical for agencies placing professionals across different jurisdictions.

Background check requirements typically include criminal history checks, employment verification, and thorough professional reference validation. Healthcare-specific screening often includes mandatory drug testing, tuberculosis (TB) screening, and rigorous verification of immunization records. Certain highly sensitive positions may require enhanced background checks, including financial history scrutiny or security clearance verification.

Skills assessment and competency testing protocols are used to validate nursing capabilities beyond basic credentialing requirements. Clinical skills assessments may involve simulation exercises, comprehensive knowledge testing, and practical demonstrations of clinical proficiency. Specialized nursing roles often require additional competency validation relevant to their specific areas of practice.

Robust systems for tracking continuing education and certifications are crucial. These systems ensure that all placed nursing professionals maintain current credentials, comply with regulatory requirements, and remain eligible for ongoing assignments. Maintaining regularly updated nurse profiles and accurate availability statuses within the agency's ATS is fundamental for efficient and timely placements.

7. Client Acquisition and Relationship Management

Healthcare Facility Outreach Strategy

A targeted and strategic outreach strategy is fundamental for successful client acquisition within the competitive nursing staffing sector. This begins with precisely identifying target clients, which typically include diverse healthcare providers such as hospitals (acute care, specialty facilities), outpatient clinics, long-term care facilities (skilled nursing facilities, assisted living centers), and home health agencies.

Establishing strong relationships with Human Resources departments, nurse managers, and executive leadership within healthcare organizations is paramount. This process involves diligently understanding their unique staffing challenges, budget limitations, and specific organizational culture. Initial engagement often involves strategic networking, informational interviews, and demonstrating a deep understanding of their operational needs.

Establishing strong connections with HR leaders, nurse managers, and executive decision-makers requires more than persistence; it requires effective communication. Here, adopting a robust business phone system like Ringover can give a nursing staffing agency a distinct edge. With Ringover's omnichannel communication platform, agencies can centralize calls, SMS, and even WhatsApp conversations, ensuring every outreach effort is tracked, recorded, and aligned with client relationship goals. Advanced features such as call recording, analytics, and CRM integrations help agencies build a professional presence, demonstrate responsiveness, and personalize communication for each facility.

Developing compelling proposals and professional service presentations is crucial. These documents must clearly state the agency's unique value, showing how it can efficiently solve staffing shortages, reduce operational costs, and consistently ensure high-quality patient care. Proposals should be carefully customized to address the specific needs identified during in-depth client discussions.

Contract negotiation and the establishment of clear Service Level Agreements (SLAs) carefully define the terms of the partnership. These agreements outline placement terms, precise billing rates, clear performance expectations, and transparent ways to resolve disputes. Competitive pricing strategies, which expertly balance market rates with agency profitability, are essential for securing lasting contracts.

Service Delivery and Quality Management

Maintaining 24/7 availability for client support and quick response capabilities for urgent staffing needs is often a critical differentiator in the healthcare staffing market. The ability to quickly deploy highly qualified personnel in unexpected situations, such as sudden call-offs or unexpected patient surges, is highly valued by healthcare facilities.

Implementing strict quality assurance measures and continuous nurse performance monitoring protocols is vital. This includes regular check-ins with placed nurses and systematic client feedback collection to ensure accurate alignment with facility standards and high patient care expectations. Performance metrics should be clearly defined, carefully tracked, and regularly reported.

Establishing effective client feedback systems and processes for continuous improvement is essential for long-term client retention and satisfaction. Regular performance reviews with clients, actively seeking constructive feedback via surveys, and demonstrating consistent responsiveness to concerns build deep trust and significantly strengthen partnerships.

Developing comprehensive crisis management and strong backup staffing protocols ensures excellent operational resilience. This involves having carefully planned contingency plans for unexpected events, such as a placed nurse falling ill, and maintaining a ready pool of available backup staff to minimize any potential disruptions to client operations.

Current Healthcare Staffing Trends and Adaptations

Market Shift Analysis

The healthcare staffing market, while strong, experiences dynamic changes that require agencies to adapt strategically. A notable change observed in 2023 was a 36% decline in travel nursing demand from its peak, reflecting a rebalancing after the acute phase of the pandemic. At the same time, the locum tenens segment is projected for a 7% growth in 2024, indicating a strategic preference for more stable temporary assignments [5].

This market recalibration also significantly affected pay, with a reported 42% drop in travel nurse earnings since the pandemic's peak [5]. Agencies must develop agile adaptation strategies to navigate these changing market conditions, including diversifying service offerings and optimizing pricing models to remain competitive and attractive to both clients and talent.

Future-Proofing Your Nursing Staffing Agency

To ensure long-term viability and sustained success, nursing staffing agencies must proactively adopt forward-thinking strategies. This includes the strategic integration of telehealth and remote nursing opportunities, effectively expanding service lines to capitalize on evolving healthcare delivery models. Telehealth positions, for example, offer greater flexibility and can attract a wider, more diverse pool of nursing talent.

A strong focus on clinician wellness programs and robust retention strategies is paramount. High rates of burnout and turnover in nursing necessitate agency initiatives that actively support the mental and physical well-being of their placed staff. This can include providing access to comprehensive mental health resources, offering flexible scheduling options, and facilitating professional development opportunities.

Diversity, equity, and inclusion (DEI) initiatives are becoming increasingly pivotal in modern healthcare hiring practices. Agencies that actively promote and clearly demonstrate a commitment to DEI can attract a broader and more diverse talent pool, effectively reflecting the diverse patient populations they serve.

Finally, offering highly flexible staffing solutions and embracing hybrid work models are key to future-proofing. This includes exploring various contract lengths, per diem options, and hybrid roles that effectively combine on-site and remote work to meet the evolving preferences of both nurses and healthcare facilities [6].

Optimize Your Staffing Agency Operations

Improve your staffing agency operations, which will provide analytics and powerful features to track and enhance performance.

Discover Ringover

State-Specific Considerations

Regional Market Analysis

The global healthcare staffing market shows distinct regional differences. North America holds a leading position, with 58% of the total market share [7]. This dominance is driven by a highly developed healthcare infrastructure and consistently high demand for specialized services. Conversely, the Asia-Pacific region is identified as the fastest-growing regional market, reflecting expanding healthcare access and increasing investment in healthcare infrastructure.

State-specific licensing requirements and regulations are critical factors that directly impact an agency's operational scope. Each U.S. state has its own Nurse Practice Act, which carefully governs nursing licensure and professional conduct. Agencies must ensure strict compliance with these varying regulations for every state in which they operate or place nurses.

Regional nursing shortage variations also present unique opportunities and distinct challenges. States experiencing more acute nursing shortages may offer higher demand and potentially more favorable billing rates, but also require more aggressive and strategic recruitment efforts. Understanding these detailed regional differences is crucial for strategic market entry and successful expansion.

Location-Based Setup Strategies

When considering the best location for operations, an agency can choose between a home-based or a traditional office-based setup. A home-based model offers significant advantages such as lower overhead costs and increased flexibility, particularly beneficial during the initial stages of establishment. An office-based setup, conversely, can project a more professional image, provide dedicated infrastructure, and serve as a central hub for larger internal teams.

Operating across multiple states requires careful consideration of multi-state nursing license verification. The Nurse Licensure Compact (NLC) allows Registered Nurses (RNs) and Licensed Practical Nurses (LPNs) to hold one multi-state license, making it easier to practice in NLC states. However, agencies must still carefully navigate non-NLC states, which require individual state-specific licensure.

Cultivating strong regional healthcare facility relationships and strategic partnerships is vital for local success. This involves understanding the specific needs, organizational culture, and preferred operational models of healthcare providers within a chosen region. Building these crucial relationships often requires a dedicated local presence and targeted outreach efforts.

Consistent adherence to state-specific compliance and regulatory requirements is non-negotiable. This includes strict adherence to labor laws, professional licensing boards, and tax regulations relevant to each state of operation.

Challenges to Expect When Starting a Nursing Staffing Agency

Starting a nursing staffing agency involves navigating a complex landscape with several inherent challenges.

These typically include significant capital requirements for payroll funding, especially given the often-delayed payment cycles from healthcare facilities. Intense competition within established markets can make client acquisition difficult, requiring a demonstrably strong value proposition.

Regulatory compliance, which varies significantly depending on your location, demands careful attention to licensing, credentialing, and labor laws. Attracting and retaining qualified nursing talent is an ongoing challenge, influenced by prevailing market demand, compensation expectations, and the agency's reputation. Additionally, effectively managing fluctuating demand from healthcare facilities and reducing professional liability risks are constant operational considerations that require proactive strategies.

How Do Nursing Staffing Agencies Work?

Nursing staffing agencies act as essential connectors, expertly linking qualified nursing professionals with healthcare facilities that need temporary, contract, or permanent staffing solutions.

The process generally begins with the agency actively recruiting a diverse pool of nurses, carefully checking their credentials, verifying their skills, and evaluating their experience. At the same time, agencies proactively engage with hospitals, clinics, and other healthcare providers to precisely understand their specific staffing needs, including specialty requirements, desired shift patterns, and essential qualifications.

Once an optimal match is found, the agency handles all administrative aspects, including contract negotiation, seamless payroll processing, timesheets, and incident reporting.

The agency then bills the healthcare facility at an agreed-upon rate, typically a strategic markup over the nurse's hourly wage, to cover these operational costs and generate profit. This efficient model allows healthcare facilities to quickly access a flexible and skilled workforce, while simultaneously providing nurses with diverse employment opportunities and enhanced flexibility.

Types of Placement Contracts

Nursing staffing agencies primarily offer three distinct types of placement contracts, each designed to meet various client and candidate needs:

1. Temporary/Per Diem Placements: These are short-term assignments, often lasting for a single shift or a few weeks, specifically designed to cover immediate needs such as unexpected call-offs, vacation relief, or sudden patient surges. Nurses in these roles are typically paid an hourly rate directly by the staffing agency.
2. Contract/Travel Nursing Placements: These involve assignments ranging from several weeks to several months, frequently requiring nurses to travel to different geographic locations. The agency manages comprehensive aspects such as housing arrangements, travel stipends, and benefits, in addition to the nurse's hourly wages. These contracts are crucial for effectively addressing regional or longer-term staffing shortages.
3. Permanent Placements: In this model, the agency acts as a dedicated recruiter to find and carefully screen candidates for a healthcare facility seeking to hire a nurse directly into a full-time, permanent position. Once a successful permanent hire is made, the agency receives a one-time placement fee from the facility, typically calculated as a percentage of the nurse's annual salary. The agency's involvement concludes once the placement is successfully completed and the nurse begins employment directly with the facility.

Conclusion

The nursing staffing industry presents a compelling and continuously growing opportunity for new businesses. With the global healthcare staffing market projected to reach a formidable USD 82.92 billion by 2034 [1], driven by persistent nursing shortages and an aging global population, the definitive path to success lies in careful planning, strategic technology investment, and consistent adherence to compliance standards.

The use of cutting-edge technology, particularly AI assistants, conversational AI software, and business phone systems like those offered by Ringover, is no longer merely an advantage but a critical necessity for competitive differentiation and operational efficiency. By proactively addressing the ongoing nursing shortage crisis with professionalism, innovation, and technological foresight, a well-managed nursing staffing agency has significant potential for substantial returns and impactful contributions to the vital landscape of healthcare delivery.

How to Start a Nursing Agency FAQ

Do I need to be certified to start a nursing staffing agency?

No, you do not typically need to be a certified nurse to start a nursing staffing agency. However, you must have a comprehensive understanding of the healthcare industry, nursing credentials, and all relevant regulations. Hiring or strategically partnering with experienced healthcare professionals or consultants is highly recommended to ensure full compliance and maintain credibility within the sector.

How much does it cost to start a nursing agency?

Startup costs for a nursing staffing agency can vary significantly, typically ranging from approximately $16,000 to over $1 million, depending on factors such as intended scale, geographic location, necessary technology infrastructure, and marketing efforts. A substantial portion of these initial costs will be allocated to working capital, which is essential to cover payroll for placed nurses before client payments are received.

How do I start my own nursing staffing agency?

Starting your own nursing staffing agency involves several critical steps: conducting thorough market research, precisely defining your niche, developing a comprehensive business plan, securing adequate funding, establishing your business entity and obtaining all necessary licenses, setting up robust technology infrastructure (including advanced communication platforms like those from Ringover), building a reliable recruitment process, and devising a compelling client acquisition strategy.

How much do nursing staffing agencies make?

Profitability for nursing staffing agencies typically ranges from 15% to 30% of their total revenue. This margin is influenced by factors such as the specialization of nurses placed, specific geographic market conditions, operational efficiency, and the chosen pricing model. Higher margins can often be achieved through highly specialized services and exceptionally efficient operational management.

Is a healthcare staffing agency profitable?

Yes, a healthcare staffing agency can be highly profitable, particularly given the persistent and growing demand for qualified healthcare professionals. The U.S. healthcare staffing market alone is expected to reach USD 34.09 billion by 2034 [2]. Success in this sector hinges on effective recruitment, robust client relationships, strict compliance, and efficient operational management, often significantly enhanced by advanced communication technologies from providers like Ringover.

Citations

• [1]https://towardshealthcare.com/insights/healthcare-staffing-market-sizing
• [2]https://towardshealthcare.com/insights/us-healthcare-staffing-market-sizing
• [3]https://mordorintelligence.com/industry-reports/per-diem-nurse-staffing-market
• [4]https://branchapp.com/blog/healthcare-staffing-trends-to-follow
• [5]https://definitivehc.com/blog/healthcare-staffing-trends
• [6]https://medicalsolutions.com/blog/client/top-healthcare-staffing-trends-in-2025-what-you-need-to-know
• [7]https://precedenceresearch.com/us-healthcare-staffing-market

Published on October 1, 2025.