What will I be doing?

There are more than 18,000 placement agencies in the U.S. Some are located in professional office buildings, but a growing number of them are operated from home offices. Some never see their clients, working exclusively by telephone and fax machine.

A placement service works with individuals looking for jobs as well as businesses seeking candidates for job openings. Your job will be to assist clients in identifying, approaching and securing a satisfying job or candidate for a job. It’s a rewarding business for both the owner and the clients. It requires extensive skills and experience, but can bring the owner an excellent income for an enjoyable task.

What will I need to start?

To help people find the job best suited to them, the placement counselor must have extensive experience in hiring, managing and placing employees. This experience must be based on professional skills that take years to develop. In addition, a placement counselor must have access to a variety of testing and human resource tools and materials and have a familiarity with the local job market.

Who will my customers be?

There is certainly no shortage of potential customers who will benefit from qualified placement services. They include unemployed and underemployed individuals as well as companies who need help placing or replacing current employees.

Customers will find you through ads and by professional referral. So it will be important for you to make ties with the employment community in your area. Up to half of your customers will be referrals.

How much should I charge?

The rate placement services use to calculate their pricing is $40 to $80 an hour. However, most placement services quote prices calculated on a commission based on the value of a new job. Depending on what services are offered and how much of your time it takes for the typical placement, you may price your services at one-month’s salary or even 25 percent of the annual salary of your client’s new job.

How much will I make?

Because your business is operated from your home, overhead expenses are lower than if you had to rent a plush office downtown. In fact, overhead expenses including telephone, advertising, supplies and related expenses will range from 20 to 35 percent of gross income. Deduct typical taxes and you’ll probably get to keep about 50¢ to 60¢ of every dollar you charge clients. Collecting your fees can be more difficult in this business than in others, so learn how to reduce overdue receivables.

How can I get started?

This is one profession where credentials are more valuable than in others. People want more than your word that you are qualified to help them find the right job. If you have extensive experience in employment, make sure your prospects know it. Join professional associations, especially those that offer certification programs. Join local professional groups that add credibility to your business. Work hard to earn referrals.

The SIC code for placement services is 7361-03.

How can I use computers to increase profits?

Jobs are won and lost on the Internet. You can log on to the Internet and check the large job placement boards (like http://www.monster.com), view jobs offered through your state’s department of employment (such as http://www.caljobs.ca.gov/), and search hundreds of other resources. In addition, you can accept and submit resumes electronically via e-mail as well as correspond with clients. Computers are powerful tools for placement services.