How to Start a Medical Staffing Agency: Step-by-Step Guide for 2026

A medical staffing agency has become one of the most critical solutions to today’s growing healthcare workforce crisis. With hospitals, clinics, and care facilities struggling to keep up with patient demand, staffing agencies are playing a vital role in filling workforce gaps quickly and efficiently. In fact, experts estimate the U.S. healthcare staffing market was valued at $24.6 billion in 2024 and is projected to grow at 5.8% annually through 2030, driven by staff shortages, an aging population, and increased healthcare utilization.

This demand spans every niche of the industry, from nurse and CNA staffing to specialized roles like medical billing and allied health professionals. Recent workforce studies highlight the urgency: the U.S. is expected to face a shortage of 78,610 full-time registered nurses (RNs) in 2025, followed by another 63,720 RN shortage by 2030. These numbers explain why searches like “how to start a medical staffing agency” and “healthcare staffing business opportunities” are rapidly increasing; entrepreneurs are recognizing a growing, long-term market with real impact.

Given these trends, now is an excellent time to start a healthcare staffing agency. The opportunity is clear, but success requires more than demand alone. Many aspiring agency owners want quick answers to questions like: What niche should I choose? How much does it cost to start? How do I find clients and recruit qualified healthcare professionals? This guide answers those questions by breaking down the exact steps to launch a medical staffing agency, from planning and pricing to recruiting and scaling.

Starting a healthcare staffing agency can also be financially rewarding. On average, staffing agency owners earn over $100,000 per year, making it an attractive business for those willing to invest time, effort, and strategic planning. While the industry has a relatively low barrier to entry, long-term success depends on having the right knowledge, systems, and funding in place from day one.

In this article, we’ll walk you through everything you need to know to start and grow a successful medical staffing company, including niche selection, business planning, client acquisition, candidate recruitment, branding, and financing options, so you can confidently turn opportunity into a scalable, profitable business.

How to Start a Healthcare Staffing Agency in 2026

Starting a medical staffing agency in 2026 is one of the most promising opportunities in today’s healthcare landscape. As hospitals, clinics, and care facilities face ongoing workforce shortages, the demand for reliable staffing partners continues to rise. While launching a healthcare staffing agency does require planning and commitment, the process is far more achievable when broken into structured steps.

At Vars Health, we believe success comes from understanding both the business and human sides of staffing, connecting healthcare facilities with qualified professionals while building trust, reliability, and long-term partnerships.

Below is a detailed, step-by-step guide to help you start and scale your staffing agency with confidence.

1. Choose the Right Staffing Niche

Choosing a niche is one of the most important decisions you’ll make when starting your medical staffing agency. The healthcare industry is broad, and trying to serve every specialty from day one can dilute your focus and slow your growth.

A niche allows you to:

• Develop deeper industry expertise

• Build targeted marketing campaigns

• Recruit candidates more efficiently

• Position your agency as a specialist rather than a generalist

Some common healthcare staffing niches include:

• Nurse staffing agency services (RNs, LPNs, CNAs, travel nurses)

• Physician and advanced practice staffing

• Allied health professionals (sonographers, radiology techs, respiratory therapists)

• Locum tenens and temporary healthcare staffing

When selecting your niche, consider market demand, competition, licensing requirements, and your own experience or network. Starting with one focused niche makes it easier to build strong systems and relationships. As Vars Health grows, expanding into new specialties becomes a natural next step.

2. Create a Strong Staffing Agency Business Plan

A comprehensive business plan is the backbone of your healthcare staffing agency. It serves as a strategic guide, helping you make informed decisions and stay aligned with your long-term goals.

Your business plan should clearly outline:

• Your staffing niche and ideal client profile

• Market size, trends, and demand projections

• Competitive landscape and differentiators

• Revenue streams and pricing strategy

• Short-term and long-term growth objectives

It should also include a clear mission statement that reflects Vars Health’s commitment to quality, reliability, and ethical staffing. Financial projections—such as startup costs, monthly operating expenses, and expected revenue—are critical for understanding cash flow and profitability.

Even if you’re not seeking external funding, a solid business plan helps you anticipate challenges, manage risks, and stay focused as your agency scales.

3. Define Your Service Offerings and Set Strategic Pricing

Your service offerings define how clients experience your medical staffing agency. Clear, well-structured services help healthcare facilities understand exactly what you provide and why your agency is the right fit.

Key service decisions include:

• Full-time placements vs. temporary or contract staffing

• Short-term coverage vs. long-term workforce solutions

• Credentialing, compliance, and background verification support

• Ongoing account management and replacement guarantees

Pricing must be carefully structured to cover all costs while remaining competitive. These costs typically include:

• Staff wages and benefits

• Payroll taxes and insurance

• Recruitment and advertising expenses

• Technology, software, and administrative costs

Most agencies operate with a 30%-50% markup, but Vars Health recommends building pricing models based on real numbers and scalability goals. Transparent pricing builds trust with clients and protects your margins as you grow.

4. Register Your Business and Ensure Legal Compliance

Proper registration is essential for operating a legitimate healthcare staffing agency. The structure you choose, LLC, corporation, partnership, or sole proprietorship, will impact liability, taxes, and operational flexibility.

After choosing a structure, you’ll need to:

• Register your business with state and federal authorities

• Apply for an Employer Identification Number (EIN)

• Obtain any required healthcare staffing licenses or permits

• Understand labor laws, healthcare regulations, and compliance requirements

Healthcare staffing is a regulated industry, so staying compliant protects your agency and builds credibility with clients. Keeping all documentation organized from the start saves time and prevents legal issues later.

5. Open a Dedicated Business Bank Account

A separate business bank account is not just good practice, it’s essential for managing finances effectively. It allows you to clearly track income, expenses, payroll, and tax obligations.

When choosing a business bank account, consider:

• Low monthly fees and reasonable transaction limits

• Online banking and reporting tools

• Payroll and ACH transfer capabilities

• Customer support and scalability

Using a dedicated account under Vars Health’s name enhances professionalism and makes financial reporting significantly easier as your agency grows.

6. Build a Strong Brand and Online Presence

In today’s digital-first world, your online presence is often the first interaction potential clients and candidates have with your healthcare staffing agency. A strong brand builds trust before a conversation even begins.

Key branding elements include:

• A professional, easy-to-navigate website

• Clear messaging that explains your niche and value proposition

• Consistent visuals, colors, and tone of voice

• Active and professional social media presence

Your website should clearly communicate how Vars Health solves staffing challenges, highlight your services, and make it easy for clients and candidates to get in touch. Strong branding positions your agency as credible, reliable, and established.

7. Set Up an Efficient Payment and Billing System

Cash flow is one of the biggest challenges for a medical staffing agency, especially in the early stages. Setting up a smooth billing and payment process ensures financial stability.

You’ll need to decide:

• How invoices are generated and sent

• Which payment methods you’ll accept (ACH, checks, online payments)

• How quickly clients are expected to pay

Many agencies use staffing-specific accounting software that integrates payroll, invoicing, and reporting. Having a reliable system in place ensures Vars Health can scale without payment delays disrupting operations.

8. Find and Build Long-Term Client Relationships

Clients are the foundation of your healthcare staffing agency. Winning clients requires proactive outreach, clear communication, and a strong value proposition.

Effective client acquisition strategies include:

• Direct outreach to healthcare administrators and decision-makers

• Networking within healthcare and staffing communities

• Leveraging referrals and professional connections

• Demonstrating reliability, speed, and quality placements

Rather than focusing only on short-term wins, Vars Health emphasizes building long-term partnerships. Consistency, responsiveness, and trust lead to repeat business and steady growth.

9. Recruit, Screen, and Retain Quality Candidates

Great candidates are what keep clients coming back. A successful nurse staffing agency or healthcare staffing firm prioritizes both recruitment and retention.

Candidate sourcing methods include:

• Professional networking platforms like LinkedIn

• Job boards and industry-specific platforms

• Referrals from existing candidates

• Healthcare conferences and job fairs

Beyond sourcing, thorough screening, credential verification, and ongoing communication ensure candidates are well-matched and supported. Treating healthcare professionals with respect and transparency helps Vars Health build a loyal talent pool.

Final Thoughts

Starting a medical staffing agency is both a business opportunity and a chance to make a meaningful impact on healthcare delivery. With the right strategy, systems, and commitment, Vars Health can grow into a trusted healthcare staffing agency known for quality, reliability, and long-term partnerships.

If you’re ready, we can continue expanding the next section or move into financing, scaling, or technology next.

Pros and Cons of Starting a Healthcare Staffing Agency

Like any business venture, launching a medical staffing agency comes with both significant advantages and real challenges. Understanding these pros and cons upfront allows you to prepare strategically, minimize risk, and build a stronger foundation for long-term success.

At Vars Health, we believe transparency is key. Below, we break down the most impactful benefits and drawbacks of starting a healthcare staffing agency, so you can make informed decisions before entering the industry.

Pros	Cons
Expands access to essential healthcare services, especially in underserved and rural communities	Filling highly specialized and technical medical roles can take longer and require extensive screening
Plays a vital role in reducing nationwide healthcare workforce shortages	Staffing healthcare professionals often involves higher upfront payroll and compliance costs
Offers greater flexibility and independence as a business owner	Building a strong client base can be challenging in the early stages
Operates within a fast-growing and potentially high-revenue industry	Navigating licensing, credentialing, and accreditation requirements can be complex

Pros of Starting a Healthcare Staffing Agency

1. You Improve Access to Healthcare Services

One of the most meaningful advantages of running a healthcare staffing agency is the direct impact you make on patient care. Many hospitals, clinics, and long-term care facilities, especially in rural or underserved areas, struggle to maintain adequate staffing levels.

By operating a medical staffing agency, you help:

• Ensure patients receive timely and consistent care

• Support facilities facing chronic staffing shortages

• Reduce burnout among existing healthcare workers

In many cases, staffing agencies are the only solution keeping healthcare systems operational, making this business both socially impactful and professionally rewarding.

2. You Help Address Critical Workforce Shortages

Healthcare staffing shortages are not limited to one city or state, they are a nationwide issue. A healthcare staffing agency has the unique advantage of recruiting talent beyond local boundaries.

This flexibility allows agencies to:

• Recruit professionals from other states or regions

• Place travel nurses and locum tenens professionals

• Source international healthcare talent where permitted

For example, a nurse staffing agency can fill gaps where local institutions cannot produce enough qualified professionals. This ability to move talent where it’s needed most gives staffing agencies a powerful role in stabilizing the healthcare workforce.

3. Greater Flexibility and Independence as a Business Owner

Owning a healthcare staffing agency offers a level of flexibility that many traditional healthcare roles do not. As an agency owner, you have control over how and where you work.

Some of the flexibility benefits include:

• The ability to work remotely or operate a home-based business

• Freedom to set your own schedule

• The option to scale at your own pace

This makes starting a medical staffing agency especially appealing for entrepreneurs who want independence while still operating in a high-impact industry.

4. Strong Revenue Potential in a Growing Market

The healthcare staffing industry is valued at over $20 billion and continues to grow due to increasing demand for medical professionals. This creates significant earning potential for agency owners who build efficient systems and strong client relationships.

Financial advantages include:

• High demand across multiple healthcare specialties

• Repeat business from long-term facility contracts

• Scalable revenue as you expand into new niches

With proper pricing, staffing models, and cash flow management, a healthcare staffing agency can become a highly profitable and sustainable business.

Cons of Starting a Healthcare Staffing Agency

1. Licensing, Credentialing, and Compliance Challenges

Healthcare staffing is a highly regulated industry, and compliance can be complex, especially when placing professionals across state lines.

Common challenges include:

• State-specific licensing requirements

• Credential verification and renewals

• Accreditation and compliance audits

Failing to meet these requirements can delay placements or lead to legal issues. However, with the right systems and processes in place, these challenges can be managed effectively over time.

2. Recruiting for Specialized Medical Roles Is Difficult

Not all healthcare positions are easy to fill. Many roles require highly specialized skills, certifications, or years of experience.

This means:

• Longer recruitment cycles for niche positions

• More rigorous screening and credential checks

• Higher expectations from healthcare facilities

For a medical staffing agency, recruiting quality talent requires persistence, strong networks, and a deep understanding of clinical roles, especially in specialized or high-demand fields.

3. Higher Upfront Costs for Staffing Healthcare Professionals

Healthcare professionals are among the highest-paid workers in the staffing industry. Competitive wages, benefits, and compliance costs can make staffing expensive, particularly in the early stages.

Upfront expenses often include:

• Payroll before client invoices are paid

• Insurance and workers’ compensation

• Credentialing and onboarding costs

Without proper financial planning, cash flow can become a challenge. This is why many healthcare staffing agencies rely on structured billing systems and financing solutions to stay stable.

4. Building a Client Base Takes Time

While demand for healthcare staffing is strong, winning clients, especially as a new agency, can be challenging. Facilities often prefer to work with agencies that already have a proven track record.

Early-stage challenges include:

• Limited brand recognition

• Strong competition from established agencies

• Longer sales cycles with healthcare decision-makers

That said, consistency, relationship-building, and delivering high-quality placements help new agencies like Vars Health gain trust and secure long-term contracts over time.

Final Perspective

Starting a healthcare staffing agency offers substantial rewards, both financially and professionally, but it also requires preparation, resilience, and strategic planning. By understanding the pros and cons, you can approach the industry with realistic expectations and a clear plan for success.

At Vars Health, the key to overcoming challenges lies in building strong systems, maintaining compliance, nurturing relationships, and staying focused on quality staffing outcomes.

If you’d like, we can next expand into risk mitigation strategies, how to overcome these challenges, or financing solutions for healthcare staffing agencies.

Staffing Agency Financing: How to Raise Funds for Your Business

Even when you follow every step involved in launching a medical staffing agency, one major challenge often stands in the way, financing. Before you can officially begin operations, you need working capital to cover expenses such as payroll, recruitment, licensing, insurance, software, and marketing.

For many first-time founders, financing a healthcare staffing agency can feel especially difficult. Traditional lenders often require an established business credit history, which new agencies typically don’t have. As a result, qualifying for standard bank loans can be challenging in the early stages.

The good news is that you don’t have to rely solely on traditional loans. There are several effective funding options available that can help you raise capital and maintain healthy cash flow as you build and scale your staffing business.

Below are some of the most common and practical financing options to consider.

Crowdfunding - Crowdfunding allows you to raise money from individual investors through online platforms by offering equity or other incentives in return for their investment.

This option can be appealing because:

• It doesn’t rely on business credit or loan approval

• You gain access to a broad pool of potential investors

• It allows you to validate your business idea early

Crowdfunding works best when you have a compelling business story and a clear growth vision. For a medical staffing agency with a strong mission, such as improving access to care or addressing workforce shortages, this can be an effective way to generate early capital.

Grants - Grants provide funding from government agencies, corporations, or private foundations without requiring repayment. While competitive, grants can be an excellent funding source for eligible healthcare staffing agencies.

Common grant categories include:

• Small business and startup grants

• Minority-owned or women-owned business grants

• Healthcare innovation and workforce development grants

• Regional or state-level economic growth programs

Although grants often involve detailed applications and reporting requirements, they can significantly reduce financial pressure and support early growth for agencies like Vars Health.

Invoice Factoring - Invoice factoring is one of the most popular financing solutions for healthcare staffing agencies. It involves selling your unpaid client invoices to a third-party factoring company in exchange for immediate cash.

Key benefits include:

• Receiving up to 80-90% of the invoice value within 24 hours

• Improved cash flow to cover payroll and operating costs

• No need for strong business credit

Because staffing agencies often pay employees before clients settle invoices, invoice factoring helps bridge that gap and provides consistent working capital, especially valuable for a growing nurse staffing agency or medical staffing firm.

Business Line of Credit - A business line of credit functions similarly to a credit card, allowing you to borrow funds as needed and repay only what you use.

This option is useful for:

• Covering short-term operational expenses

• Managing payroll fluctuations

• Handling unexpected costs

While no collateral is typically required, borrowing limits and interest rates depend heavily on your credit profile. For new healthcare staffing agency owners, access may be limited, but it can still be a flexible financing tool once approved.

Private Investors - Private investors provide capital in exchange for partial ownership in your business. In addition to funding, many investors offer valuable guidance, industry connections, and strategic support.

Advantages of private investment include:

• Access to larger amounts of capital

• Mentorship and business expertise

• Reduced reliance on debt

However, you’ll usually give up some control or equity in your medical staffing agency. This option works best when you’re comfortable sharing ownership in exchange for faster growth and long-term support.

Traditional Bank Loans - Traditional bank loans are standard financing options designed to support business expansion and operations. These loans typically offer lower interest rates but come with stricter qualification requirements.

Challenges for new agencies include:

• Minimum business credit score requirements

• Proof of consistent revenue

• Collateral or personal guarantees

Because of these barriers, traditional loans are often difficult to secure during the early stages of starting a healthcare staffing agency.

Understanding Alternative Lending Options

Many of the financing methods above fall under alternative lending, which refers to non-traditional funding sources that are more accessible than standard bank loans.

Alternative lending is especially helpful for healthcare staffing agencies because:

• Approval is often faster

• Credit requirements are more flexible

• Funding aligns better with staffing cash flow cycles

For startups like Vars Health, alternative financing solutions can provide the capital needed to launch, pay staff on time, and scale operations without the delays associated with traditional banking.

How Payroll Funding Supports Healthcare Staffing Growth

Payroll funding, often referred to as invoice factoring, is one of the most practical and widely used financing solutions for healthcare staffing agency owners. For businesses operating in the staffing space, especially those managing frequent payroll cycles, this funding method offers a reliable way to maintain financial stability while continuing to grow.

When starting a medical staffing agency, two financial priorities should always remain front and center: maintaining consistent cash flow and ensuring adequate working capital. Staffing agencies frequently face a timing mismatch between paying healthcare professionals and receiving payments from clients, which can place strain on day-to-day operations if not managed properly.

Payroll funding helps solve this challenge by improving both cash flow and access to working capital. After entering into an agreement with a payroll funding provider such as Vars Health, the responsibility of collecting outstanding invoices is handled on your behalf. Instead of sending payments directly to your agency, your clients remit payment to the funding provider, allowing you to focus more on recruitment and client relationships rather than collections.

Once an invoice is issued, the funding provider advances approximately 80–90% of the invoice value, typically within 24 hours. This immediate access to funds removes the uncertainty caused by long payment terms or delayed client payments. Rather than waiting weeks to receive revenue you’ve already earned, your agency benefits from a predictable and steady stream of working capital. When the client’s payment is received, the remaining balance is released to your staffing agency, minus a small factoring fee.

For healthcare staffing agencies looking to scale without taking on traditional debt, payroll funding offers a flexible and growth-friendly solution. If you have questions about invoice factoring, how payroll funding works, or whether it’s the right fit for your business, you can reach out to Vars Health directly at hello@varshealth.com. Our team is committed to helping healthcare staffing agencies strengthen cash flow and achieve sustainable business growth.

In Summary: Starting a Healthcare Staffing Agency in 2026

Starting a healthcare staffing agency involves many moving parts, and it’s completely normal to feel overwhelmed at first. From planning and registration to recruitment and cash flow management, there’s a lot to think about. However, when each step is approached with intention and care, what begins as a startup can evolve into a well-structured, scalable, and highly profitable medical staffing agency.

So, what does it really take to build a successful agency?

At its core, success comes down to following a proven process and executing each stage thoughtfully. Building a strong foundation early on makes it far easier to grow, adapt, and scale over time.

To recap, here are the essential steps involved in launching a successful healthcare staffing agency:

• Choose a clear staffing niche that allows you to specialize, build expertise, and stand out in a competitive market

• Create a comprehensive business plan that outlines your goals, market strategy, financial projections, and long-term vision

• Define your service offerings and set pricing that supports profitability while remaining competitive

• Register your business properly and ensure all legal and regulatory requirements are met

• Open a dedicated business bank account to keep finances organized and transparent

• Build a professional online brand that reflects trust, credibility, and your value to clients and candidates

• Set up a reliable payment process and invest in accounting software to maintain a healthy cash flow

• Focus on building a strong client base through outreach, networking, and relationship-building

• Begin recruiting qualified healthcare professionals and develop a talent pool you can rely on

Each of these steps plays a critical role in shaping the future of your business. When completed with diligence and consistency, they significantly increase your chances of building a sustainable and successful healthcare staffing agency.

At Vars Health, we believe that long-term success isn’t about shortcuts; it’s about doing the fundamentals well. By committing the time and effort needed to execute these steps properly, you’re positioning your staffing agency to grow into a trusted partner for healthcare facilities and a reliable employer for medical professionals alike.

Ready to take the next step? Book a demo with Vars Health today and see how we can help you build and scale your healthcare staffing agency with confidence.

Starting a Healthcare Staffing Agency in 2026: Have any Questions

How does a medical staffing agency generate revenue?

A medical staffing agency earns revenue by recruiting, placing, and managing healthcare professionals for medical facilities. In most cases, agencies charge a markup on the professional’s pay rate. This markup, often ranging from 25% to 100%, depending on role complexity and demand, covers recruitment costs, payroll, compliance, and operational expenses. The difference between what the client pays and what the healthcare professional earns becomes the agency’s revenue.

Can anyone start a healthcare staffing company?

Yes, anyone can start a healthcare staffing agency, but having experience or knowledge in healthcare can be a significant advantage. Understanding clinical roles, licensing requirements, and compliance standards makes it easier to place qualified professionals and build trust with healthcare facilities. While prior experience isn’t mandatory, it can help accelerate credibility and client acquisition.

How large is the healthcare staffing market in the United States?

The healthcare staffing market in the U.S. is substantial and continues to grow. As of 2022, the industry was valued at approximately $23.6 billion, driven by ongoing workforce shortages, an aging population, and increased demand for healthcare services. This sustained growth makes the industry attractive for new and established staffing agencies alike.

How much can a healthcare staffing agency earn?

Earnings for a healthcare staffing agency vary based on factors such as location, niche specialization, client volume, and operational efficiency. On average, staffing agency owners earn around $100,000 per year, with the potential to earn significantly more as the business scales and secures long-term contracts.

What is the biggest challenge when starting a healthcare staffing agency? 

One of the biggest challenges for new healthcare staffing agencies is managing cash flow, especially when paying healthcare professionals before clients settle invoices. Other common challenges include recruiting qualified talent, navigating licensing requirements, and building trust with clients. With the right systems, funding strategies, and planning, these challenges can be effectively managed.