The Nursing Agency Market in 2025

The US healthcare staffing market reached $21.59 billion in 2025 and is projected to more than double to $42.82 billion by 2035 (CAGR 7.09%), according to Precedence Research. Nursing makes up the largest slice: the global nurse staffing segment alone was valued at $47.68 billion in 2025 and is on a trajectory to reach $72.65 billion by 2032 (Brand Essence Research).

North America accounts for 57.9% of global healthcare staffing revenue. Travel nurse placements represent the largest sub-segment, 40.5% of the US market, while per diem (shift-by-shift) placements are the dominant model for independent nursing agencies. The per diem segment dipped 22% between 2023 and 2024 as post-COVID surge demand normalised, but structural nursing shortages continue to underpin long-run demand: the US Bureau of Labor Statistics projects 194,500+ registered nurse job openings per year through 2032.

In the UK, healthcare staff recruitment agencies generated approximately £1.4 billion in revenue in 2025-26, growing at a compound annual rate of 1.8% over the past five years (IBISWorld UK). The NHS Long-Term Workforce Plan aims to reduce agency dependency from 9% of total staffing costs (2021-22) to around 5% by 2032-33, which means the market is contracting for NHS-facing agencies, but demand from private hospitals, care homes, and private GP networks remains robust.

Who Dominates the Market, and Where Independents Win

The top five US firms, Aya Healthcare ($6.9B revenue, 2024), AMN Healthcare, Cross Country Healthcare, CHG Healthcare (Salt Lake City), and Medical Solutions, collectively handle the bulk of hospital MSP (managed service provider) programmes. These players win on volume, vendor-neutral technology platforms, and established Joint Commission approval.

Independent agencies cannot outbid AMN or Aya on bill rate. What they can do is fill in 4 hours what a national agency takes 48 hours to arrange, speed-to-fill in a nurse shortage is worth a premium to facilities. The sustainable niche for new entrants is typically a specific geography (one metro or rural corridor), a specific clinical specialty (ICU, OR, labour and delivery), or a private-pay client base (private hospitals, clinics, care homes) that national agencies under-service.

SBA Funding & Finance Routes for Nursing Agencies

Nursing and healthcare staffing agencies are classified under NAICS code 561320 (Temporary Help Services). The SBA size standard for this code is $34 million in annual revenues, meaning the vast majority of independent agencies qualify as small businesses for SBA 7(a) loans.

The SBA 7(a) programme is the most practical funding route for new nursing agency owners. Loans go up to $5 million; terms stretch to 10 years for working capital and up to 25 years for real estate. Interest rates are prime-linked (currently prime + 2.25-4.75%, depending on loan size and maturity). For a nursing agency, the primary use of SBA 7(a) funds is working capital to cover the payroll float, the gap between paying nurses weekly and receiving facility payments 30-60 days later. A $42,000-$75,000 SBA microloan is often sufficient for a solo operator placing 6-10 nurses to bridge the first 90 days.

SBA Loan Application: What Healthcare Staffing Lenders Want to See

• Two years of financial projections, monthly P&L, cash-flow statement, and balance sheet; bill-rate and pay-rate assumptions documented
• Signed or LOI-stage client contracts, even a letter of intent from one hospital or care facility significantly improves approval odds
• Evidence of nursing licenses in your placed-nurse pipeline, verifying nurse credentials demonstrates operational readiness
• Insurance certificates, professional liability / malpractice binder in place before application
• Owner's resume or clinical background, lenders value founder experience; former nurses, healthcare managers, and HR professionals have higher approval rates
• Business plan (full document, lender-ready format), Avvale's bespoke plan service is formatted to SBA submission standards

UK Funding Options

In the UK, the Start Up Loans scheme (British Business Bank) offers £500-£25,000 per director at a fixed 6% interest rate with up to five years to repay, plus free mentoring. Most nursing agency startups use this primarily for working capital and initial technology (payroll software, scheduling platform). For larger operations, commercial invoice finance (factoring) against outstanding facility invoices is a highly practical route, factors will advance 80-90% of a verified invoice immediately, eliminating most of the cash-flow gap.

Startup Costs & Budget Breakdown

Starting a nursing agency requires far less capital than a physical healthcare business, there are no premises to outfit and no medical equipment to buy. The dominant cost driver is working capital: you pay nurses every week, but hospitals and care homes pay invoices in 30-60 days. That float needs to be funded upfront. Budget $16,000-$100,000 in the US or £8,000-£60,000 in the UK, depending on how many nurses you plan to place in your first quarter.

Typical Pre-Launch Cost Breakdown

• Business formation (LLC/Ltd filing, registered agent): $500-$2,000 (£50-£500), do this before approaching hospitals; facilities won't contract with a sole trader
• State nursing agency / healthcare staffing licence: $200-$2,500 (UK: CQC registration £232-£2,396 if placing nurses in regulated activities), 20+ US states require a dedicated licence beyond a general business licence
• Professional liability & malpractice insurance (Year 1): $3,000-$8,000 (£2,000-£5,000), non-negotiable; most hospital MSPs will not contract with an uninsured agency
• Workers' compensation insurance: $2,000-$6,000/yr (UK employer liability insurance £500-£1,200), required in all US states before placing your first employee-nurse
• Payroll software (e.g. Gusto, ADP, Paychex): $100-$300/mo (£80-£200/mo), weekly payroll for nurses; factor in Year 1 setup fees
• Applicant tracking & scheduling software (e.g. Bullhorn, JobDiva, NurseGrid): $150-$500/mo (£100-£350/mo), ATS, credential tracking, and shift scheduling in one platform
• Background checks & credential verification per nurse (e.g. Checkr, URAC-certified screener): $50-$150/nurse (£40-£100; DBS Enhanced check £44), budget per cohort, not per year
• Website, job board postings (Indeed, NurseRecruiter, NHSjobs): $2,000-$8,000 (£1,500-£5,000) for launch; ongoing ~$500/mo for job boards
• Legal / employment counsel (contract templates, employment agreements): $1,500-$5,000 (£1,000-£4,000), particularly important for the nurse employment agreement and facility service agreement
• Working capital float (first 60 days of payroll before invoices are collected): $5,000-$60,000 (£3,000-£35,000), the single biggest variable; scales directly with how many nurses you place from day one

The Cash-Flow Gap: What Most Guides Miss

Most nursing agency startup guides list insurance, software, and licensing costs, and then underestimate the working capital requirement by a factor of three. Here is the actual maths: if you place 10 RNs averaging 36 hours per week at a pay rate of $50/hr, your weekly payroll obligation is $18,000. If facilities pay on 45-day terms, you will have disbursed $162,000 in payroll before your first invoice is cleared. Even on 10-nurse scale, a $42,000 SBA microloan gets used up quickly. Plan for this before you sign your first hospital contract.

Invoice factoring solves this problem for UK and Australian operators. US agencies often use a combination of SBA working capital loans and a payroll financing facility (companies like Advance Partners or Allied Capital specialise in staffing agency payroll funding).

BLS Wage Data: What Nurses Earn, and What You'll Bill

Getting your pay-rate and bill-rate right requires starting from verified wage benchmarks, not guesswork. The BLS Occupational Employment and Wage Statistics (May 2024) put the median registered nurse wage at $93,600/year ($45.00/hr). The top 10% earn $132,680 or more; the bottom 10% earn $63,720. Specialised nurses commanding the highest rates include certified registered nurse anesthetists (CRNAs) at a mean of $214,000/yr and nurse practitioners (NPs) at $126,000-$148,000/yr.

Nurse Pay Rates by Role, and Agency Bill-Rate Benchmarks

The SIA/NATHO Travel Nurse Benchmarking Survey (2025) reported that the average travel nurse bill rate fell to $89.78/hr in 2024 (down from $106.63 in 2023), and aggregate gross margins settled at 19.3%, a return to pre-COVID normalisation after the aberrant 2021-2022 surge. For independent per diem agencies, gross margins of 25-35% are achievable because per diem placement costs are lower (no housing stipend, no travel reimbursement) than travel contracts.

UK Agency Rate Benchmarks

In England, NHS frameworks (e.g. NHS Shared Business Services and NHS Supply Chain agency frameworks) set rate caps for registered nurses. Band 5 (newly qualified RN) agency rates run approximately £28-£38/hr; Band 6 (specialist nurse) £34-£48/hr; ICU/ITU Band 7 up to £60/hr on short-notice shifts. Private hospitals and care homes operate outside NHS caps and typically pay £32-£55/hr for RN shifts, with agencies billing £45-£75/hr.

Revenue Model & How Nursing Agencies Make Money

A nursing agency earns money on the spread between the bill rate (charged to the facility) and the pay rate (paid to the nurse), minus payroll burden costs (taxes, workers' comp, insurance). This is the bill-rate model, and it is the only significant revenue mechanism for per diem and short-term placement agencies.

The Bill-Rate Markup Explained

Typical per diem markups run 40-60% over the nurse's hourly pay rate. On a $50/hr RN pay rate, a 50% markup yields a $75/hr bill rate. The $25/hr spread is gross revenue per hour, but it is not gross profit. Payroll burden (employer FICA 7.65%, FUTA/SUTA ~2-3%, workers' comp 2-5%, professional liability allocation 1-2%) typically totals 12-15% of the nurse's pay rate, or roughly $6-$8/hr on a $50/hr RN.

That leaves true gross margin of $17-$19/hr per nurse placed per diem. At 40 shifts/week averaging 12 hours each, a single RN generates approximately $8,160-$9,120 in gross margin per week. A portfolio of 10 active nurses at that rate generates $81,600-$91,200/week in gross revenue and $17,000-$19,000 in weekly gross margin before fixed overhead.

Worked Revenue Example, Nashville Per Diem Agency

A small Nashville-based nursing agency places 8 per diem RNs averaging 36 hours per week at a bill rate of $75/hr and a pay rate of $50/hr:

• Weekly gross billings: 8 × 36 × $75 = $21,600
• Weekly nurse payroll (pay rate): 8 × 36 × $50 = $14,400
• Weekly gross margin (before burden): $7,200 (33.3%)
• Payroll burden (FICA, FUTA, workers' comp at 14%): $2,016
• Net gross margin after burden: $5,184/week (24%)
• Weekly fixed overhead (recruiter salary, software, insurance prorated): ~$2,500
• Weekly net operating income at 8-nurse scale: ~$2,684
• Annualised NOI at 8-nurse scale: ~$139,600

Scaling to 20 active nurses roughly doubles overhead while gross income triples, net margin expands to 12-16% of billings as fixed costs are spread. This is why growth to 20+ active placements is the standard inflection point in nursing agency economics.

Travel Nurse Placement (13-Week Contracts)

Travel nurse placement involves placing an RN on a 13-week assignment at a facility located away from the nurse's home base. The agency typically provides a housing stipend ($1,500-$2,500/ month), a travel allowance, and a non-taxed per diem. Bill rates for travel nurses averaged $89.78/hr in 2024, but gross margins are lower (18-25%) because of the stipend obligations. Per-placement profit on a 13-week contract for a general RN (assuming $90 bill rate, $60 pay rate, $2,000/mo housing, 36 hrs/week) works out to approximately $4,800-$6,200 for the contract duration.

Additional Revenue Streams

Experienced agencies supplement placement income with: permanent placement fees (15-25% of first-year salary for direct hire; a Band 5 RN at £33,000 generates a £4,950-£8,250 fee); contract conversion fees (when a facility hires a temp nurse permanently, agencies charge 8-15% of annual salary); and international nurse recruitment (placing NCLEX/IELTS-qualified overseas nurses into US or UK facilities, with fees of $8,000-$18,000 per placement, as practised by O'Grady Peyton International and AMN's international division).

For a deeper dive into building investor-ready financial projections for your nursing agency, see Avvale's guide on professional business plan writing.

Licensing, Registration & Compliance by Jurisdiction

Nursing agency licensing is genuinely fragmented, there is no single federal or national licence in the US, UK, or Australia. What you need depends on which state or country you operate in, whether you direct and supervise the nurses you place (as opposed to simply introducing them), and the clinical settings you target.

United States

At federal level, you need an EIN from the IRS (free, instant online) and a business entity registration (LLC or corporation) with your home state Secretary of State ($50-$500, typically 1-10 business days). That is the floor.

The critical additional requirement is state-specific healthcare staffing licensing. More than 20 US states mandate a separate nursing agency or supplemental staffing licence:

• Minnesota: Supplemental Nursing Services Agency (SNSA) licence through the Minnesota Department of Health, one of the most prescriptive; $100-$400 fee; 30-90 day approval; annual renewal
• Illinois: Nurse Agency Licensing Act (amended 2025); administered by Illinois Department of Labor; required for any agency placing registered nurses, LPNs, or CNAs with healthcare facilities
• New York: Health Facilities Management licence required if placing nurses in certified home health or hospice settings; NYS Department of Health oversight
• California: No specific nursing agency licence, but placment agencies must register with the California Labor Commissioner and comply with AB5 / independent contractor classification rules, the strictest in the country

Optional but commercially valuable: URAC accreditation ($5,000-$15,000; 3-6 months) or Joint Commission certification for healthcare staffing services. Hospital MSP programmes from Aya or AMN typically require JCAHO or URAC credentials before listing an independent agency as an approved vendor.

Worker classification is a parallel legal risk. Placed nurses almost always satisfy IRS employee tests (control of work, integration into facility operations, no independent business); misclassifying them as 1099 contractors attracts back tax, penalties, and potential state enforcement action. Engage employment counsel before finalising your nurse engagement agreements.

United Kingdom

UK nursing agency operators must comply with the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003, both enforced by the Employment Agency Standards (EAS) Inspectorate (BEIS). There is no upfront licence fee, you notify before operating. Key obligations include: not charging nurses fees for finding work, providing written terms to every nurse before they start, and keeping records of all placements.

CQC registration is the other regulatory pillar. The Care Quality Commission (CQC) requires registration for providers of "nursing care" as a regulated activity. Crucially, a nursing agency that merely introduces a registered nurse to a facility, without directing or supervising that nurse's clinical role, is exempt from CQC registration for the nursing care activity. Most genuine staffing agencies (as opposed to care providers) fall into this exempt category. If you are placing nurses into domiciliary care settings where you do supervise clinical practice, CQC registration is required; fees range from £232 to £2,396 depending on turnover band; the process typically takes 8-12 weeks.

All UK nursing agencies must ensure every placed nurse has a current DBS Enhanced check (£44 per nurse; 2-8 weeks), is registered with the NMC (Nursing and Midwifery Council), and holds valid professional indemnity insurance. From 2024, NMC registrants must revalidate every three years. Agencies are expected to track revalidation status; placing a nurse whose registration has lapsed creates direct liability.

Register with the Information Commissioner's Office (ICO) for data protection (£40-£60/yr Tier 1) before processing any nurse or client data.

For a related compliance comparison, see the healthcare staffing agency business plan guide.

Australia

Australian nursing agencies do not register with a central federal licensing body. The regulatory obligation falls on nurse verification: every placed nurse must hold current registration with AHPRA (Australian Health Practitioner Regulation Agency) under the Nursing and Midwifery Board of Australia (NMBA). Placing a nurse whose AHPRA registration has lapsed is a criminal offence under the Health Practitioner Regulation National Law (adopted in all states and territories). Agencies must check AHPRA's public register before each placement, not once at onboarding.

State-level labour hire licensing also applies in Victoria and Queensland (and pending in other states). Victoria's Labour Hire Authority requires a licence for any business that supplies workers to host employers; applications cost $517.10-$2,069.10 (2025 fee schedule) depending on size; processing takes 60-90 days.

Six Costly Mistakes That Sink New Nursing Agencies

The following failures appear repeatedly among first-year nursing agency operators. They are specific to this niche, not general startup pitfalls.

1. Misclassifying Nurses as Independent Contractors

The IRS applies a multi-factor test to determine employee vs. independent contractor status. Placed nurses are almost universally employees under this test: the facility controls their schedule, their work is integral to the facility's operations, and they are not running an independent business. Agencies that classify nurses as 1099 contractors to avoid payroll taxes expose themselves to IRS back-tax assessments (up to 3 years retroactive), state penalties, and in California, AB5 enforcement which carries $25,000+ per violation. Structure nurse agreements correctly from Day 1.

2. Underpricing to Win the First Contract

The impulse to undercut competitors by $5-$10/hr on bill rate is understandable, but nursing agency margin is thin enough that a 10% bill-rate reduction can wipe out net profit entirely. Before pitching any facility, model your floor rate: (nurse hourly pay) × (1 + payroll burden %) + (pro-rated insurance and overhead per nurse-hour) = your true break-even. Anything below that is a loss-making contract. Target 40-50% markup minimum on per diem; accept 25-30% only for high-volume, guaranteed-hours travel contracts.

3. Ignoring the Payroll Float Problem

You pay nurses every week. Hospitals pay invoices in 30-90 days. On 10 active nurses, that is a $40,000-$100,000 cash obligation sitting unpaid at any given time. Agencies that start without a working capital line, SBA loan, invoice factoring, or a payroll funding facility, hit a cash wall within the first 60 days. The fix is simple but must be arranged before placement starts, not after you're already short on payroll.

4. Skipping State-Specific Nursing Agency Licensing

Registering an LLC in your home state does not constitute a nursing agency licence. In Minnesota, Illinois, New York, Maryland, and more than 15 other states, a separate healthcare staffing or supplemental nursing services licence is required before you can legally place nurses. Operating without it risks fines up to $10,000/day in some states, immediate contract termination by hospital compliance departments, and personal liability for the business owner. Run a licensing checklist for every state in which you place nurses , even if that's just travelling nurses placing a few shifts in a neighbouring state.

5. Credential Shortcuts

Hospitals require documented evidence of nursing licence currency, immunisation records (hepatitis B, MMR, varicella, flu), BLS/ACLS certification, and skills competency checks for the clinical area. JCAHO-accredited facilities have specific credentialing standards that agencies must meet. Failing to maintain complete credential files, not just at onboarding, but with every renewal, is the fastest route to contract termination. Invest in a credentialing management platform (NurseIO, HealthTrust, or a Bullhorn credentialing module) from Day 1.

6. No On-Call Protocol

Facilities call at 10 pm for a 7 am shift. If there is no one answering that call, no on-call coordinator, no text cascade, no automated scheduling tool, the facility calls a competitor. Agencies lose long-term contracts not over bill rates but over on-call responsiveness. Even a solo operator in Year 1 should have an on-call protocol and ideally a part-time coordinator covering evenings and weekends before pursuing hospital accounts.

Sample Nursing Agency Business Plan, Preview

Below is an extract from a composite nursing agency business plan. This illustrates the level of specificity Avvale builds into each plan. Names and identifying details are fictional; financial structure is based on actual nursing agency unit economics.

The full Avvale template includes all nine sections (executive summary, company description, market analysis, competitive positioning, services, marketing, operations, management team, and financial plan) plus a five-year financial model with monthly cash-flow projections for the first two years.

What's Inside the Nursing Agency Business Plan Template

The Avvale nursing agency template is a 30-45 page editable Word document structured for SBA lenders, angel investors, and bank financing. Every section includes instructional notes explaining what to write and why lenders care about it.

• Executive Summary, one-page pitch covering service offering, target market, competitive advantage, and funding ask
• Company Description, legal structure, founding story, mission statement, and geographic scope
• Market Analysis, nursing shortage data (BLS, state-level), healthcare staffing market sizing, target segment definition (per diem vs. travel vs. permanent)
• Competitive Analysis, how to position against national players (AMN, Aya, Cross Country) and local independents; differentiator framework
• Services Offered, per diem, travel nursing, LPN/CNA placement, permanent hire, contract-to-hire; bill-rate and margin documentation per service type
• Marketing & Client Acquisition Plan, hospital procurement process, MSP vs. direct contract strategy, nurse recruitment channels (Indeed, NurseRecruiter, referral programmes)
• Operations Plan, credentialing workflow, scheduling platform selection, on-call protocol, quality assurance (Joint Commission / URAC prep)
• Management & Team Structure, founder background, recruiter hiring plan, advisory board template
• Financial Plan, 5-year P&L, monthly cash-flow (Year 1-2), balance sheet, break-even analysis, payroll float schedule, SBA loan repayment model
• Appendices, licence checklist, sample nurse employment agreement outline, sample facility service agreement outline, credential tracking log template

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Nursing Agency Business Plan, Frequently Asked Questions