Staffing agencies in Nashville: 465 offices, the Rutherford County giants and what a markup pays for

This report is for Middle Tennessee employers choosing an agency, job seekers comparing agencies, and B2B sellers whose customers are staffing firms.

The Nashville market in one table

Source: US Census Bureau, County Business Patterns 2023, Nashville-Davidson--Murfreesboro--Franklin, TN Metro Area (CBSA 34980), NAICS 56131 (Employment Placement Agencies and Executive Search Services) and NAICS 56132 (Temporary Help Services).

What the employee count measures

Census counts people where they're employed, and a temp is employed by the agency. So the assemblers, nurses' aides and warehouse workers that Nashville agencies place at clients' sites appear in staffing, which is why 365 temp offices report almost 26,000 employees. Two cautions follow. The figure is a single week in March, so it misses seasonal peaks. And the Census Bureau notes that employment services firms may pay many workers from one payroll office, which puts their employees in that office's county rather than where they work.

Where the big branches are

"Not reported" means the Census Bureau published the figure but flagged it as high-noise, because the noise added for confidentiality changed it by 5% or more.

Rutherford County (Murfreesboro, Smyrna, La Vergne) has a third as many offices as Davidson but half as many employees: its 54 temp offices report 5,866 people, about 109 each, against about 62 per temp office in Davidson. Wilson County's 27 temp offices average about 84. Williamson County is the white-collar end, with 28 placement and search offices among its 94.

How big they are

In broader bands, 246 establishments have 1 to 19 employees, 126 have 20 to 99 and 93 have 100 or more, the last derived as the total less the smaller bands because the top classes aren't published for the two codes combined. The temp rows show 61 temp offices with 100 to 249 employees, 21 with 250 to 499 and 6 with 500 to 999.

The counts are establishments with paid employees, not companies, and exclude self-employed recruiters. Professional employer organizations (NAICS 56133, 22 more establishments) aren't included.

The kinds of agency in Nashville

• Light industrial and manufacturing temp: assembly, warehouse and production crews, billed hourly. The large branches in Rutherford and Wilson counties are mostly this.
• Healthcare staffing: nurses, aides and allied health on per diem, contract or travel assignments.
• Office, accounting and IT contract: weeks or months of work, billed hourly.
• Temp-to-hire: a trial period, then a conversion to your payroll, with a fee if you convert early.
• Direct hire and executive search: a fee per hire, or a retainer for senior searches.
• PEOs: co-employment of staff you already have, for payroll, benefits and HR.

Tennessee rules to know

• PEOs register. Tennessee Code section 62-43-106 says no person may provide or advertise professional employer services in the state unless registered under the chapter, which the Department of Commerce and Insurance administers. Registration lasts two years. The same chapter defines temporary help services separately, as firms that recruit and hire their own employees and assign them to clients.
• No state minimum wage. The federal $7.25 applies, so pay is set by the labor market.
• E-Verify. Tennessee Code section 50-1-703 requires private employers with 35 or more full-time-equivalent employees to use E-Verify, or keep copies of listed identity documents, for hires since 1 January 2023; a revised version of the section takes effect on 1 January 2027. Most temp agencies are over that size because the temps are their employees.

Worked example: what a markup has to pay for

Illustrative example. The pay rate, markup, state unemployment rate and workers' compensation rate are invented; the federal tax rates are the IRS's.

A Smyrna parts supplier gets a quote for assemblers at an $18.00 pay rate and a 38% markup: a $24.84 bill rate, so $6.84 an hour above pay. Over a 1,000-hour assignment, here's where that $6.84 goes:

The statutory costs come to about 10.3% of pay. A quote with a markup near or below that can't cover taxes and insurance, so ask what's missing: workers' compensation, unemployment accounts, or whether the workers are really employees. Comparing a 32% and a 45% quote is then a question of what the extra $2.34 an hour buys: faster fills, better retention, or just margin.

Questions to ask before you sign

1. What is the pay rate, and what is the markup? Will they change if pay rises?
2. How are overtime, holidays and minimum shifts billed?
3. What does it cost to convert a temp, and when does the fee drop to zero?
4. Can you send workers' compensation and liability certificates naming us?
5. Who gives safety training, and who reports injuries?
6. Who are two clients with similar work we can call?

Search an agency's name on ClearlyRated's Nashville listings for client and job seeker ratings, and check the entity with the Tennessee Secretary of State. Job seekers shouldn't be asked to pay a temp agency to register.

Selling to Nashville staffing agencies

The 88 or more large temp branches are where workers' compensation, safety, screening, timekeeping and transport spending concentrates, and they cluster outside Davidson County. Healthcare staffing firms follow the region's hospital and health system employers; see healthcare companies in Nashville. Read each agency's job postings to sort industrial from healthcare from office work before you write. For method, use how to build a prospect list; Bebop finds agencies that match a description and researches each one.

Subject: Workers' comp on [agency]'s Rutherford County accounts

Hi [first name],

I saw [agency] is hiring [number] assembly and warehouse roles around [town].

For a branch your size, workers' compensation is often the biggest cost inside the markup after payroll taxes, and it moves with every new client's risk class. We place comp for staffing firms and price each new account before you quote it.

Would a quick review of your next new-client quote be useful?

[Your name]

Local sources

Next step: see the region's wider business base in companies in Nashville.