Staffing agencies in Cleveland: 425 locations, Ohio's workers' comp system and what a markup pays for

This report is for Northeast Ohio employers comparing agencies, job seekers deciding where to register, and B2B sellers who sell to staffing firms. Summit and Portage counties are covered in staffing agencies in Akron.

Cleveland staffing agencies by the numbers

US Census Bureau, County Business Patterns 2023, Cleveland, OH Metro Area (CBSA 17410), NAICS 56131 (Employment Placement Agencies and Executive Search Services) and 56132 (Temporary Help Services):

The temp help headcount is mostly the temps themselves. Census defines temporary help services as supplying workers to clients' businesses, and "the individuals provided are employees of the temporary help services establishment." So a branch with five recruiters and 150 people on assignment at plants and warehouses reports 155 employees.

How big and where

In broader bands: 242 locations have 1 to 19 employees, 144 have 20 to 99 and 39 have 100 or more (the total less the smaller bands; the top cells aren't published for the codes combined). From the industry rows, the 10 locations with 250 or more are seven temp branches with 250 to 499, two temp branches with 500 or more and one placement office.

Lake and Geauga carry the high-noise flag: the Census Bureau published their employee totals, but its confidentiality noise moved them by 5% or more, so we leave them out. Cuyahoga has 74% of the locations and 77% of the employees. Lorain's 27 locations are fewer but larger, about 61 employees each, against about 24 in Medina.

These are establishments with paid employees, not companies (a firm with branches in Cleveland, Euclid and Strongsville counts three times), self-employed recruiters aren't counted, and employment is one week in March 2023. PEO establishments (19 in the metro) fall under NAICS 56133 and aren't counted here.

Which kind of agency

If you're looking for work: the agency is your employer on a temp assignment and pays you, including overtime; a reputable agency is paid by the employer, not by you. Greater Cleveland Works runs the OhioMeansJobs Center for Cleveland and Cuyahoga County, with free job search help and training.

Ohio's rules that matter

Workers' compensation runs through the state. Ohio private employers fund workers' compensation through contributions to the state insurance fund, set as rates per $100 of payroll for each class code (Ohio Administrative Code 4123-17-06), unless they're approved to self-insure. A temp agency is the employer of its temps, so its policy with the Bureau of Workers' Compensation (BWC) covers them; ask for proof of that coverage before workers start.

PEOs register with the BWC; temp agencies don't. Ohio's rules define a PEO as a co-employer of a client's workforce and say the term "does not include a service agency that is in the business of employing individuals for the purpose of utilizing the services of the individuals for a temporary period of time" (OAC 4123-17-15). A PEO must register with the BWC within 30 days of forming and every year after, pay a renewal fee by 31 December, and give the bureau a list of its clients with their BWC policy numbers (OAC 4123-17-15.2). If a firm offers to take over payroll and HR for your existing staff, it's acting as a PEO and that registration applies.

Worked example: what a 40% markup pays for

Illustrative example. The pay rate, tax rates other than FICA, premium rate and cost split are invented to show the arithmetic; real figures vary by agency, class code and experience.

A Cleveland agency quotes $25.20 an hour for a machine operator paid $18.00, a 40% markup of $7.20:

$2.46 of the markup, 13.7% of pay, goes to payroll taxes, unemployment and workers' comp before the agency pays a recruiter or earns anything, and state fund rates vary widely by class code, so the workers' comp line can be much larger for plant work than for office work. A quote that seems too cheap is usually cheap somewhere in the bottom four lines: fewer screens, thinner supervision, slower replacements. Ask the agency to walk you through its markup at this level.

Selling to Cleveland staffing agencies

Ohio's system gives one pitch an unusually clear return: because temp agencies pay state fund premiums on their whole temp payroll, a safety or return-to-work program that reduces claims shows up in their workers' comp costs. Build the list from ClearlyRated's 113 Cleveland listings and the ASA directory, add expansion leads from the City of Cleveland's economic development office, and read job posts to find branches staffing plants in Cuyahoga, Lorain and Lake counties. Matching branches to the plants they staff is the slow step; Bebop finds agencies that fit a description like that and explains each one. The prospect list guide covers the rest of the method.

Subject: Claims on [agency]'s plant placements

Hi [first name],

I saw [agency] is filling [number] [role, e.g. machine operator] jobs at plants in [county] this month. In Ohio your temps sit on your own BWC policy, so every injury at a client site lands in your claims history.

We [what you do, e.g. run site-specific safety onboarding and early injury triage] for staffing branches.

Would it help to look at your last year's claims by client site?

[Your name]

Local sources

Next step: compare the smaller market south of Cleveland in staffing agencies in Akron.