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How to Start a Locum Recruitment Agency in 2025

Published 03 Jan 25

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by Patrick Hill

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Medical professionals in a modern healthcare setting
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In this post, we'll cover:

  1. Why Start a Locum Recruitment Agency?
  2. The Locum Agency Business Model
  3. Understanding the Locum Landscape
  4. Conduct Market Research & Find Your Niche
  5. Develop a Solid Business Plan
  6. Build Your Digital Infrastructure
  7. Conclusion

The locum recruitment industry is booming...

Why Start a Locum Recruitment Agency?

The Growing Demand for Locum Professionals

Healthcare organizations worldwide are grappling with unprecedented staffing challenges. In the United States, physician shortages are projected to skyrocket:

According to updated projections by the Association of American Medical Colleges (AAMC) in 2024, the U.S. will face a physician shortage of up to 86,000 physicians by 2036.

Meanwhile, NHS Scotland is also feeling the pressure:

Recent workforce statistics show consultant vacancies at 447.7 (WTE) in March 2024---up by 2.57% on December 2023 and 0.25% compared to the previous year. Vacancies of six months or more are at the highest figure in a decade, while spending on locums has nearly doubled since 2014 to £129.6 million per year.

The takeaway is clear: public and private healthcare systems alike need temporary locums to bridge ever-widening staffing gaps.

Opportunity Across Sectors

The global locum tenens market---valued at USD 8.80 billion in 2023---is expected to reach USD 9.44 billion in 2024 (Grand View Research). This growth extends beyond hospitals into:

  • Pharmacies
  • Veterinary Clinics
  • Long-Term Care Facilities
  • Specialty Practices (e.g., emergency pharmacists, oncologists)

Whether you're in the U.K. or the U.S., these shortages translate into strong, ongoing demand for reliable locum recruitment agencies.

Key Action Step: Identify the biggest "pain points" in your local healthcare market (e.g., nursing shortages in rural areas or specialized vet staffing). This will help you shape your agency's focus.

The Locum Agency Business Model: How It Can Be Profitable

Locum agencies make money through several core streams:

  1. Client Fees

    • Charge healthcare organizations a fee based on the locum's hourly or daily wage.

  2. Markup on Employee Wages

    • Pay locums a set rate, then charge the client a higher rate to cover recruitment, payroll, and overhead.

  3. Placement Fees

    • Earn a percentage of a candidate's annual salary if a locum converts to a permanent hire.

  4. Contract or Project-Based Work

    • Negotiate a fixed contract rate with the client and retain the margin after paying the locum.

  5. Additional Services

    • Offer background checks, payroll management, or training at an added cost.

Pro Tip: In high-demand fields---like emergency pharmacists or critical care physicians---some agencies add urgency fees or premium pricing for last-minute requests.

Key Action Step: Determine your primary revenue channel (e.g., markup model vs. placement fees) and then layer on additional services for extra income.

1. Understand the Locum Landscape

What Is Locum Work?

Locum positions are temporary roles filled by qualified professionals to cover short-staffed or specialized needs. Common examples:

  • Healthcare: Doctors, nurses, medical technicians
  • Pharmacy: Pharmacists, pharmacy technicians
  • Veterinary Services: Veterinarians, vet nurses, other specialists

Why Locum Staffing Is on the Rise

  • Growing Healthcare Demands: Aging populations, expanded access to care
  • Retirement Wave: A large cohort of seasoned clinicians nearing retirement
  • Gig Economy Mindset: Many professionals enjoy flexible, contract-based roles

Challenges include managing compliance, scheduling, and last-minute client demands. Rewards include recurring revenue, strong client relationships, and a real impact on patient care.

Mini-Recap: Locum staffing meets the need for speed and specialized coverage. If you can streamline compliance and scheduling, you'll stand out in a growing market.

2. Conduct Market Research & Find Your Niche

Identifying the Right Sector

Some high-demand areas for locum work:

  • Nurses: Often the largest segment (39.10% of the market in 2023)
  • Physicians: Especially in underserved or rural areas
  • Pharmacists: Hospitals and retail chains frequently need rapid coverage
  • Veterinary Specialists: Driven by rising pet ownership

If you have industry connections---say you were a locum pharmacist---that existing network can be a major advantage.

Analyzing the Competition

  • Service Offerings: Which specialties do they serve?
  • Gaps to Fill: Are rural clinics or short-term projects overlooked?
  • Pricing & Markup: How can you position your fees more effectively?

Crafting Your Unique Value Proposition (UVP)

  • Speed & Efficiency: Real-time shift scheduling, quick candidate matching
  • Compliance Expertise: Automated license renewal tracking
  • Exceptional Candidate Experience: A user-friendly candidate portal fosters loyalty

Next Steps: Now that you've outlined your target market and UVP, it's time to turn those insights into a clear business plan.

3. Develop a Solid Business Plan

Estimating Startup Costs & Funding

Budget line items commonly include:

  • Licensing & Registration
  • Insurance (professional liability, cybersecurity)
  • Technology & Software (recruitment website builder, CRM, scheduling tools)
  • Marketing & Advertising (online ads, trade shows)

You could fund your venture via personal savings, small business loans, or angel investors---especially if you anticipate quick growth.

Legal & Compliance Requirements

Healthcare and pharmaceutical locum placements are heavily regulated:

  1. Register with relevant professional bodies.
  2. Understand licensing requirements for doctors, nurses, pharmacists, etc.
  3. Maintain up-to-date records of certifications, immunizations, and background checks.

Ignoring compliance risks major fines and reputational damage, so embed it into your operations from Day One.

Setting Measurable Goals

  • Client Acquisition: Number of client facilities in the first quarter
  • Candidate Registrations: Target size of your locum pool
  • Revenue Targets: Overhead vs. markup structures

Mini-Recap: Your business plan should map out how you'll balance compliance with speed---two critical success factors for any locum agency.

4. Build Your Digital Infrastructure

Hypothetical Scenario: Many locum agencies today rely on a basic WordPress site without a dedicated candidate portal. Each time candidates apply for a shift, they must re-upload their CV. If you're filling multiple shifts per week (as in pharmacy, vet, or doctor markets), you'll end up constantly emailing or calling to confirm availability. This leads to slow turnaround and a frustrating candidate experience.

Solution: Offer a modern, integrated platform so you can have a pulse on your candidate pool. You'll know exactly who's available for upcoming shifts, get a faster time-to-hire, and provide exceptional service to clients.

Invest in a Recruitment Website Builder

Look for:

  • Clean, Intuitive Navigation
  • Job Board Integration
  • Brand Customization (logos, color schemes, specialized content)

Implement a Candidate Portal & Shift Scheduling Software

A candidate portal:

  • Updates Availability: Candidates can block out personal commitments.
  • Encourages Repeat Engagement: They see shifts tailored to their preferences.
  • Centralizes Compliance: All certificates and licenses in one place.

A shift scheduling system:

  • Automates Real-Time Notifications: No more chasing via phone calls.
  • Matches Candidates Instantly: Based on location, specialty, and availability.

Leveraging the Portal for Permanent Recruitment

Platforms like Hirepad keep track of each candidate's preferences---including those open to permanent roles. This means:

  • Additional Revenue Streams through placement fees
  • Better Client Retention by handling both temp and permanent needs
  • Time Savings as you already have all candidate data in one system

Mini-Recap: A robust digital infrastructure cuts down admin tasks and upgrades the candidate experience, which in turn speeds up time-to-fill and keeps clients happy.

5. Attracting Your First Clients & Building Partnerships

With your business plan in place and digital tools ready, it's time to land your initial clients. Given global staffing shortages, facilities actively seek reliable, tech-savvy locum partners.

Brand Visibility & Thought Leadership

  • SEO: Target niche keywords like "locum pharmacist shifts" or "emergency vet staffing."
  • Content Marketing: Publish blog posts, success stories, and whitepapers on compliance best practices or local staffing trends.
  • Social Media & Networking: LinkedIn is crucial---engage with hospital administrators, pharmacy managers, and vet clinic owners.

Referral Incentives & Industry Events

  • Conferences & Job Fairs: Great for face-to-face networking
  • Professional Associations: Boost credibility and connect with decision-makers
  • Referral Rewards: Offer discounts or bonuses to clients who introduce you to new facilities

Showcasing Your Tech-Forward Approach

Let potential clients see how your platform:

  • Reduces Time-to-Fill with automated shift matching
  • Ensures Compliance via integrated tracking
  • Handles Permanent Placement if they're also seeking full-time hires

Mini-Recap: Emphasize your modern, streamlined approach to locum staffing. This resonates with clients drowning in manual processes.

6. Sourcing & Retaining Top Locum Talent

A robust talent pool is your agency's lifeblood. High-quality candidates lead to higher fill rates and more satisfied clients.

Candidate Engagement Through Portals

  • Smooth Onboarding: Minimize repetitive forms
  • Push Notifications: Instantly alert candidates about relevant shifts
  • Self-Service Tools: Let them see pay stubs, shift history, and compliance status

Streamlined Compliance Tracking

A compliance success story:

Hypothetical Success Vignette: One locum agency integrated automatic certificate reminders and cut expired certifications by 50%. This saved them hours per week chasing documents and kept client satisfaction high.

Retention Tactics & Perks

  • Competitive Pay & Quick Payment: Nothing motivates repeat engagements like fast, fair compensation
  • Flexibility & Respect: Accommodate location or specialty preferences when possible
  • Recognition Programs: Shout-outs, testimonials, or even small bonuses for top performers

Mini-Recap: Invest in a user-friendly, transparent candidate experience. Satisfied locums often become your biggest advocates---and help fill shifts faster.

7. Scaling & Ongoing Optimization

With the locum market's continued expansion, you can scale quickly---provided you track performance and refine your approach.

Monitor Key Performance Indicators (KPIs)

  • Time-to-Fill
  • Fill Rate
  • Candidate Retention
  • Client Satisfaction (via regular surveys or check-ins)

Feedback Loops

  • Post-Shift Surveys: Gather insights from both locums and clients
  • Monthly Check-Ins: Connect with major clients proactively to anticipate needs

Continuous Improvement & Technology Upgrades

  • AI Matching: Automatically surface the best candidates for each shift
  • Analytics & Forecasting: Spot demand spikes in certain specialties or locations
  • Further Automation: Timesheet approvals, compliance reminders, shift confirmations

Mini-Recap: Data-driven decisions ensure you're always one step ahead, able to handle larger volumes and more complex staffing needs.

Conclusion

Starting a locum recruitment agency in 2025 is both lucrative and fulfilling. You're not only solving staffing crises in healthcare, pharmacy, and veterinary settings---you're also improving patient care and supporting professionals who crave flexible career paths.

Ready to take the first step?

  • Book a Hirepad Demo: See firsthand how our integrated recruitment website builder, advanced job board, scheduler features, and candidate portal can accelerate your locum placements.
  • Boost Revenue with Permanent Roles: Leverage each candidate's profile preferences to identify those open to full-time opportunities---no extra system required.
  • Stand Out in a Crowded Market: Offer streamlined compliance, real-time shift matching, and an exceptional user experience that keeps clients and candidates coming back.

Take action now to differentiate your locum agency and capitalize on a market that's projected to keep growing well beyond 2025.

Additional Resources