If your staffing firm currently focuses on permanent placements, you’ve likely enjoyed the high margins and simplicity of those one time hires. However, contract staffing increases staffing firm value by providing steady recurring revenue and greater financial stability. In today’s staffing market, adding contract placements can open the door to more than just consistent income, it can significantly boost your firm’s worth, especially if you plan to sell or exit in the future.
Transitioning into contract staffing is easier than you think, especially with Madison Resources’ payroll funding and back office support behind you.
Why Add Contract Staffing to Your Business Model?
Create Predictable, Recurring Revenue: Permanent placements offer a one time fee. Once the role is filled, the revenue stops. With contract staffing, however, every active contractor generates ongoing weekly or monthly revenue giving your firm a consistent income stream and improved cash flow. This steady income is one reason why contract staffing increases staffing firm value over time.
Offer More to Clients: Clients are increasingly looking for flexible hiring solutions, especially in industries like IT, healthcare, logistics, and finance. By offering contract staffing in addition to permanent roles, you become a full service partner, helping clients fill short term roles, project based work, or contract to hire positions.
Boost Your Firm’s Resilience: Market slowdowns or hiring freezes can hit permanent placement firms hard. But staffing firms with a healthy contract workforce weather economic dips better, as contractors remain on payroll and generate income even when full time hiring stalls.
Want to Sell Your Firm One Day? Contract Staffing Increases Valuation
Here’s something most staffing owners don’t consider early enough: when it comes time to sell your business, buyers typically value contract staffing firms higher than those focused solely on permanent placements. Here’s why:
Recurring Revenue Is More Valuable: Buyers place a premium on predictable income. A firm with ongoing weekly billings from contractors is more attractive than one relying solely on unpredictable permanent fees.
Higher Multiples: Staffing companies that generate most of their revenue from contract placements often sell for higher EBITDA multiples. In contrast, permanent heavy agencies are often seen as more transactional and less stable.
Better Buyer Pool: Buyers, especially private equity or strategic acquirers are often seeking scalable, system driven businesses. A contract staffing firm, especially one with back office systems in place, looks more like an investment grade operation.
This is why contract staffing increases staffing firm value and is a strategic move for long term growth and successful exits.
Concerned About Payroll? Madison Resources Makes It Easy
One reason firms hesitate to move into contract staffing is the payroll burden. You need to pay contractors weekly, even if clients pay in 30, 45, or 60 days. Thats where Madison Resources comes in:
Payroll Funding: We give you the working capital to pay contractors on time, every time, without draining your cash or lines of credit.
Back Office Services:
- Payroll processing and tax filing
- Invoicing and collections
- Timekeeping systems
- Financial reporting
With our support you can scale your contract staffing without building new internal infrastructure.
Scale Today. Sell for More Tomorrow.
By adding contract staffing, you’re not just improving short term cash flow, you’re future proofing your business. Whether your goal is to grow steadily or prepare for an eventual sale, expanding into contract staffing can dramatically increase your revenue, stability, and overall valuation.
Ready to Expand and Elevate Your Firm?
Madison Resources helps staffing companies make the jump from permanent only to contract ready with funding, tools, and expertise to fuel your growth.
Let’s talk about how we can help you build value and build your future.
Ready to start your funding journey? Partner with Madison Resources today [apply here]
About the Author
Tyler Tierney is a funding expert at Madison Resources, specializing in helping staffing firms secure the capital they need to grow. With a strong track record of supporting both established companies and startups, Tyler works closely with clients to design strategic funding solutions and operational plans that maximize business potential and drive sustainable growth.
Watch a video from our clients Social Capital as they explain the importance of adding contract to their existing perm mix.
Explore our website to find more staffing insights. Madison Resources is the premier payroll funding and back office support partner to the staffing industry. Grow with confidence.