How to Grow Your Staffing Company: The 6-Step Model for Strategic Growth

Scaling a staffing company isn't about making a series of random moves. It's about strategic growth that follows a proven sequence. At Zeal, we talk to hundreds of staffing companies per year and work with some of the fastest growing staffing companies in America. Based on our insights we’ve developed a model that’s tailored to help staffing companies move from a niche player to a nationwide powerhouse, unlocking new revenue streams and securing long-term success.

This step-by-step growth strategy is designed to help leaders at staffing companies understand how to grow, no matter what size you are today. Whether you're just starting out or looking for a way to take your staffing agency to the next level, this guide will walk you through the six essential ways to grow—and how to make each opportunity work for your business.

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1. Specialize – Nail One Niche

Initially, staffing companies need to prove to clients and workers that they can make high quality matches. This is only possible when you have a deep, laser-focused expertise in a specific industry or role. It’s tempting to think you can serve everyone, but true growth starts by becoming the go-to expert in one niche. Clients need to see that you truly understand their world, their challenges, and their talent needs better than anyone else.

When you focus on mastering a niche, you gain a competitive edge. You can create tailored solutions and a reputation that draws clients to you rather than the other way around. So, focus your efforts on one industry and perfect your niche. It’s a strategy that not only helps you win trust but also positions you as a subject matter expert.

‍One of the best examples of a staffing company that’s excelled by focusing on a niche is Lawtrades. By zeroing in on the legal industry, Lawtrades has become a go-to provider of highly specialized legal talent, offering a unique service for law firms and in-house legal departments.

Instead of trying to serve every sector under the sun, Lawtrades doubled down on what it knows best: legal professionals. They’ve developed an expertise that not only meets the needs of the legal industry but anticipates them, offering a tailored approach to legal staffing that generalist agencies simply can’t match.

By understanding the nuances of legal work and staying attuned to the fast-changing demands of law firms, Lawtrades has built a reputation as the premier destination for on-demand legal talent. Whether it’s for contract roles, project-based work, or even high-level legal consulting, they’ve shown that true success comes from specializing deeply and positioning yourself as the expert in a particular area.

Why it Works:

• Expertise: Lawtrades has mastered the language, tools, and needs of the legal sector, creating an unmatched level of trust among clients.
• Tailored Solutions: Rather than offering a one-size-fits-all approach, they offer personalized staffing solutions that are in tune with the legal industry’s specific needs.
• Market Leadership: By committing to their niche, Lawtrades has positioned itself as the go-to staffing partner for legal professionals—building a competitive advantage that’s hard for generalists to replicate.

Lawtrades’ success shows that when you specialize and own your niche, you don’t just gain a competitive edge—you also unlock long-term growth and industry leadership.

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2. Add New Locations – Spread Your Playbook to New Markets

Most staffing companies not only focus on a single industry, but also serve a single market. Whether it’s a specific city or state, for regulatory compliance and reach it’s easier to begin with one market. Once you’ve perfected your niche and developed a repeatable playbook, it’s time to scale. But instead of stretching your resources thin by moving into a new industry again, you’ll expand thoughtfully by replicating your success in new locations. Think of it like taking your winning formula and testing it in a fresh market.

Start with one additional location—maybe a nearby city or a region that shares similar needs to your original market. Once that location is up and running smoothly, expand further.

Expanding within the same state can be a strategic move, especially for staffing companies looking to maximize their reputation and minimize their exposure to new regulations. Staying within a state allows you to avoid having to navigate the complexity of state-level compliance variations. Many states have their own tax laws, worker classification rules, labor standards, and workers' compensation regulations. By focusing on expanding to nearby cities or regions within the same state, you can limit the compliance risks that come with jumping across state lines.

This localized expansion approach allows you to:

• Simplify Compliance: As you remain in one state, you're able to master and streamline your understanding of that state’s labor laws, tax codes, and safety regulations. This reduces the need to adapt to a new set of state-level requirements.
• Leverage Existing Resources: You can use the same internal compliance systems, such as tax reporting, workers' compensation, and unemployment insurance, across all your new locations within the state. This consistency helps you avoid the administrative headaches of managing different compliance requirements for different states.
• Adapt to Local Markets: Even within the same state, there can be nuances in how businesses operate in different cities or regions. By focusing on nearby locations, you can fine-tune your offering to meet local needs while maintaining compliance with consistent state-level regulations.

Once you’ve established a successful model in one or two new cities or regions, you can then consider expanding to additional states, taking the lessons learned from your regional expansion to navigate new state-level compliance challenges. You can continue to scale location-by-location, state-by-state for quite a while, and potentially go nationwide.

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3. Launch a W-2 Program – Unlock Opportunities with Enterprise Clients

This step applies specifically if you’re running a 1099-native staffing company or gig marketplace that uses 1099 workers only. When you're getting started, the strategy to only use 1099 workers is a good one, especially when your industry allows for this type of classification. But as you grow, create a reputation, and want to serve clients and workers better, the next logical move is to introduce a W-2 program. Enterprise clients in sectors like education, healthcare, and government are often looking for W-2-compliant staffing solutions.

By offering this option, you open doors to larger contracts and new revenue streams. What was once a barrier—“we can’t work with gig models”—becomes a strength. Instead of saying “we can’t,” you’ll be able to confidently say, “We’re already doing it.”

Transitioning from a 1099-based model to offering W-2 employment brings new compliance requirements. Read our guide on making the shift from 1099 to W-2. But moving into a W-2 worker model isn't about compliance—it's a strategic move that can unlock significant growth. Companies like Wonolo, Qwick, and Traba have leveraged Zeal's platform to seamlessly integrate W-2 capabilities, enabling them to tap into enterprise-level contracts and scale their operations efficiently.

Wonolo, an on-demand staffing platform, has raised over $200 million and connected over 1 million workers with flexible job opportunities. By adopting Zeal's W-2 solutions, Wonolo has streamlined its onboarding, payroll, and tax processes, ensuring nationwide compliance. Expanding to W-2 workers has allowed them to work with more enterprise clients, including major corporations like Coca-Cola and Uniqlo.

Qwick, a staffing-as-a-service platform for the hospitality industry, has experienced exponential growth, with over 500,000 shifts filled across 23 U.S. cities. Utilizing Zeal's platform, Qwick has automated payroll, tax reporting, and benefits administration, enabling them to scale operations and maintain compliance as they expanded from 1099 independent contractors only to W-2 workers as well. The ability to handle W-2 compliance across many jurisdictions contributed to them being acquired and merging with GigPro.

Traba, a marketplace for light industrial staffing, has raised $45.6 million to enhance its platform. By using Zeal's platform, Traba has streamlined its onboarding and employment eligibility verification processes, ensured compliance with multi-jurisdiction taxation, and provided workers with transparent paystubs. This has positioned Traba as a reliable partner for enterprises seeking flexible staffing solutions such as Albertsons, Ryder, and MedLit Solutions.

By adopting a W-2 model with Zeal's comprehensive compliance tools, staffing companies can not only meet regulatory requirements but also unlock new opportunities with enterprise clients, paving the way for sustainable growth.

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4. Expand Types of Work – Win New Opportunities with Existing Clients and Gain New Clients

As your staffing company grows, one of the most effective ways to scale is by diversifying the types of work you offer. This strategy not only helps you unlock new opportunities with existing clients but also opens the door to potential clients who require a different approach or type of staffing solution.

By differentiating your services, you can meet the diverse and evolving needs of the workforce, all while expanding your reach and versatility. Below are several types of staffing models that can help you target both new and existing clients:

Shift-Based Staffing

This model is ideal for on-demand, urgent needs, or one-off projects. It allows companies to fill positions quickly and efficiently, particularly in industries like healthcare, hospitality, retail, or logistics where there’s a constant need for last-minute or short-duration labor. Offering shift-based staffing enables you to cater to businesses that need flexibility and fast turnarounds.

• Example: A healthcare facility might need per diem nurses to fill shifts due to staff shortages or high patient demand. A healthcare staffing company that specializes in locum tenens could move into offering per diem staffing, helping hospitals or clinics fill these urgent needs on short notice without a long-term commitment.

Contract Staffing

Contract staffing works well for seasonal or short-term work, providing businesses with the talent they need for a set period, such as during peak seasons or for specific projects. It’s also ideal for companies looking to supplement their workforce temporarily without the long-term commitment of a direct hire.

• Example: A retail chain or hospitality business experiencing a seasonal uptick in customer traffic—like during the holidays or tourist season—can rely on contract staffing to bring in extra workers for a few months. Staffing companies who offer long term placements could engage inactive workers with a new opportunity.

Project-Based Staffing

For companies with clearly defined goals, timelines, and deliverables, project-based staffing is a perfect fit. This model is well-suited for businesses that require specialized skills for specific tasks with a fixed start and end date, such as IT rollouts, marketing campaigns, or construction projects.

• Example: A company in need of accountants to manage the influx of work during tax season can rely on project-based staffing to bring in experienced professionals for the duration of the filing period. Again, staffing companies who offer more long term jobs could tap into their inactive workforce to find people who could work as needed to meet the specific goals of the firm, providing expertise without long-term commitments.

Temp-to-Hire Staffing

Temp-to-hire is ideal for roles that require flexibility but with the potential for long-term growth. This model works well for businesses that need to assess a candidate’s fit over a period before making a permanent hire. It’s a great option for industries where hiring is based on need and performance, such as manufacturing or customer service.

• Example: A warehouse operation may hire a temp worker for a 6-month period, with the intention to offer full-time employment if the worker meets performance standards. For high performers in shift-based and contract opportunities, staffing companies could provide growth opportunities for those workers and themselves.

Direct Hire Staffing

Direct hire staffing is a staple for full-time, permanent roles that require specific skills or qualifications. It’s particularly effective for industries like healthcare, engineering, and legal, where companies need specialized talent for critical, long-term positions. Offering direct hire staffing allows you to fill high-demand roles that often require a more thorough vetting process.

• Example: A law firm looking to hire a permanent paralegal or a tech company in need of a senior software engineer would rely on direct hire staffing to find highly qualified candidates for their roles. Again, staffing companies can offer their best workers more stable and lucrative work that usually comes with advancement opportunities and benefits.

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5. Enter New Industries – Repeating the Formula in Adjacent Sectors

With a solid playbook in place, the ability to offer different types of work and workers, and multiple locations, your next step is to take your proven model and apply it to adjacent industries. The groundwork you’ve laid in your initial niche gives you a blueprint for success in other sectors. The industries might be different, but the core approach to staffing and client relationships remains the same. 

For example, if you’ve grown successfully in healthcare, you might start exploring staffing in sectors like biotech, pharmaceuticals, or even healthcare-adjacent fields like medical insurance. As long as the market is a good fit for your staffing services, you can replicate your success.

One of our customers, WorkGenius, was originally focused on the professional services and tech sectors, and then expanded their reach by moving into the marketing and creative talent industries. This strategic move allowed WorkGenius to diversify its offerings and enter new industries, leveraging its existing technology and expertise to serve a broader client base. WorkGenius scaled from $7 million in revenue per year to over $100 million in revenue per year, in just 3 years using this and other growth tactics.

All types of expansion bring on new compliance requirements, and you should expect that new industries will be the same. Industrial may require some safety materials to be presented to workers, healthcare may have certifications required, hospitality may require background checks, transportation may require a specific license, and these are just a few examples. Each industry is different in terms of compliance requirements, make sure you’re set up to handle compliance regardless of the industry you serve. 

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6. Grow by Acquisition – Immediate Access to Growth

The final way to grow your staffing company is through merger and acquisition. This is where you start thinking big—about leveraging all of the ways to grow in one move. By acquiring competitors or niche players, you accelerate your growth and solidify your position as the dominant force in the market.

Acquisitions can provide immediate access to new talent pools, technologies, and client relationships. They also help you eliminate competition and consolidate market share. Done strategically, acquisitions offer a pathway to rapid scaling without having to reinvent the wheel each time you enter a new market.

Acquisitions can even give you access to multiple other types of growth.

WorkGenius has done 4 acquisitions. Some were to consolidate in industries where they already found success. When WorkGenius decided to move into marketing and creative staffing, they did so by acquiring another staffing company. They also acquired to move into new geographic markets.

Another example is 1099-only hospitality staffing company GigPro. They acquired and merged with their competitor Qwick, who had already done the work to figure out W-2 staffing. Now the combined entity has capabilities for both types of workers, multiple types of work, coverage for more industries, a larger geographic footprint, and a better reputation among a larger set of workers and clients.

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Final Thoughts: Strategically Scaling Staffing Companies

In staffing, growth isn’t about random expansion; it’s about a calculated, strategic approach that builds on past successes. By leveraging these six growth methods—specialize, expand by location, launch a W-2 program, differentiate types of work, enter new industries, and grow by acquisition—you can scale your staffing company with purpose and confidence.

But scaling a staffing business isn't without its challenges, particularly when it comes to compliance. As you choose different ways to grow, staying on top of regulatory requirements across different industries and jurisdictions can be overwhelming. This is where Zeal can make all the difference.

Zeal is designed to help staffing companies navigate the complexities of compliance as they scale. With Zeal, you can streamline and automate the most time-consuming and error-prone aspects of staffing, ensuring that your business is fully compliant, no matter how you grow.

Here’s how Zeal helps staffing companies manage their compliance challenges:

As your staffing company grows, having a reliable platform like Zeal to handle compliance will give you peace of mind and free up your time to focus on what matters most—driving your business forward. Whether you're expanding into new markets, offering new types of work, or managing a growing workforce, Zeal is here to support you every step of the way.