How to Build an Internal Staffing Agency for Healthcare HR Leaders

In a post-COVID healthcare environment, Human Resources (HR) leaders face a unique challenge: balancing the need for highly skilled staff with the rising costs of contract labor. Hospitals and health systems across the country are exploring innovative ways to reduce expenses while maintaining exceptional patient care. One powerful solution? Building an internal staffing agency.

Why Healthcare HR Departments Are Turning to Internal Staffing Agencies

Many healthcare HR leaders are shifting towards building internal staffing agencies to address persistent challenges in workforce management. These challenges include:

• Soaring Contract Labor Costs: Traditional staffing agencies often charge high markups, significantly increasing operational expenses.
• Unpredictable Workforce Needs: Seasonal fluctuations, emergency situations, and pandemic-related surges have highlighted the need for greater staffing flexibility.
• Quality and Continuity of Care: By managing their own pool of contingent workers, hospitals can ensure higher standards in hiring, training, and workforce consistency.
• Increased Regulatory Complexity: As labor laws and healthcare regulations become more intricate, hospitals are seeking ways to simplify compliance while retaining control over staffing.

Internal staffing agencies allow HR leaders to take charge of recruitment, improve workforce planning, and build a talent pool that aligns with the hospital's long-term goals. This proactive approach not only reduces dependency on external agencies but also fosters a more stable and cost-effective workforce.An internal staffing agency empowers hospitals to source, onboard, and manage their own contingent workforce rather than relying solely on external staffing firms. Here’s a step-by-step guide on how HR leaders can build one—and how a healthcare-focused Employer of Record (EOR) can be a game-changer in this process.

1. Define Your Goals and Scope

Before diving into the logistics, HR leaders must clearly define the objectives of the internal staffing agency. These goals often include:

• Reducing contract labor spend by bringing staffing in-house.
• Creating a talent pool of nurses, technicians, and allied health professionals.
• Enhancing flexibility to respond to patient care demands.
• Ensuring compliance with labor laws and healthcare-specific regulations.

A healthcare-focused EOR can streamline this phase by providing market insights into labor costs, compliance requirements, and best practices for onboarding healthcare professionals.

2. Assess Your Current Workforce and Gaps

To effectively build an internal staffing agency, hospitals need to understand their existing workforce. This includes identifying:

• Positions frequently filled by contract labor.
• Common staffing shortages.
• Correct staffing ratios
• Seasonal or situational surges in demand.
• Local labor pools and available staff

A healthcare-focused EOR can offer workforce analytics tools to help HR leaders map these gaps and forecast future staffing needs, ensuring the internal agency is prepared to deliver.

3. Leverage Technology to Manage the Workforce

Technology is critical to managing an internal staffing agency efficiently. Invest in platforms that allow you to:

• Post and manage job openings.
• Track candidate applications.
• Onboard and offboard employees seamlessly.
• Build an employer branded webpage and recruitment site
• Maintain compliance with healthcare licensing and credentialing standards.

A tech-forward EOR can provide an integrated solution, combining payroll, benefits administration, and compliance management into one streamlined platform.

4. Develop a Talent Acquisition Strategy

Creating a robust talent pipeline is the heart of any successful internal staffing agency. HR leaders should:

• Tap into local healthcare schools and professional organizations.
• Offer competitive pay and benefits packages.
• Build a strong employer brand that highlights flexibility and professional growth.

Partnering with an EOR can help hospitals expand their reach, leveraging national networks to source top-tier talent for both permanent and temporary roles.

5. Focus on Compliance and Risk Management

Healthcare staffing comes with a unique set of compliance challenges, including:

• Ensuring licensure and certification requirements are met.
• Adhering to wage and hour laws.
• Maintaining HIPAA and other healthcare-specific privacy standards.
• Delivering ACA compliant benefits
• Workers compensation risks
• Onboarding and credentialing requirements

An EOR specializing in healthcare can take the compliance burden off your shoulders. By serving as the legal employer of your contingent workforce, the EOR handles payroll, taxes, benefits, and risk management, reducing liability for your hospital.

6. Monitor and Optimize Performance

Once your internal staffing agency is up and running, continuous improvement is key. Use key performance indicators (KPIs) to track success, such as:

• Reduction in contract labor costs.
• Fill rates for open positions.
• Time-to-fill metrics.
• Employee satisfaction and retention rates.

With an EOR’s support, you’ll have access to real-time data and reporting tools, enabling you to make data-driven decisions and continuously refine your approach.

The EOR Advantage: Lowering Costs and Enhancing Efficiency

Building an internal staffing agency is a significant investment, but the rewards can be substantial. Hospitals that take this step often see a dramatic reduction in contract labor spend, as they no longer pay the high markups associated with traditional staffing agencies. Instead, they can channel those savings into patient care and other operational improvements.A healthcare-focused EOR like FoxHire amplifies these benefits by simplifying the complexities of employment. From onboarding and payroll to compliance and benefits, an EOR provides a turnkey solution, freeing HR leaders to focus on strategic initiatives. By partnering with an EOR, hospitals can:

• Reduce administrative overhead.
• Scale their workforce quickly and efficiently.
• Stay ahead of ever-changing healthcare regulations.

Conclusion

For healthcare HR leaders looking to reduce costs and take control of staffing, building an internal staffing agency is a transformative solution. With the support of a healthcare-focused EOR, this vision becomes not only achievable but also highly efficient. By investing in this approach, hospitals can ensure they have the right talent in place—when and where they need it—while reducing their reliance on costly contract labor. The result? Better patient care, improved financial performance, and a more resilient workforce.