Winning a U.S. client can open up significant opportunities for UK recruitment agencies, particularly those looking to expand their contract business. However, securing a requirement and being in a position to deliver it are two different things. 

A client might need three contractors in Texas, a specialist in California or a project team working across several states. While the recruitment process may be familiar, the commercial and operational requirements can differ considerably from those in the UK. 

Before accepting a U.S. contract opportunity, agencies need to understand more than the job specification and potential fees. Worker location, engagement arrangements, start dates and payment terms can all influence whether a placement is viable. 

Here are five questions worth asking before committing to a U.S. contract requirement. 

1. Where Will the Contractors Actually Be Working? 

One of the first things to establish is where the contractors will physically carry out their work, rather than where the client is headquartered. 

A business based in New York, for example, might be recruiting remote contractors in Florida, Texas or California. Although the agency is working with one client, employment requirements may differ depending on each worker’s location. 

The U.S. has employment requirements at federal, state and sometimes local levels, affecting areas such as payroll taxes, workers’ compensation insurance and wage and hour rules. 

For UK agencies, supporting a contractor in one state does not automatically mean the same arrangements can be used in another, even when both workers serve the same client. 

2. Do You Have the Compliance Arrangements in Place to Onboard All Worker Types? 

U.S. contract recruitment involves several worker engagement arrangements, and UK agencies need to be prepared to support them before accepting a requirement. 

Three common arrangements agencies may encounter are: 

• W-2 employees: Workers employed through an employer responsible for payroll withholding, applicable employment taxes and employment obligations. 
• 1099 independent contractors: Self-employed individuals providing services independently, subject to applicable worker classification rules. 
• C2C (Corp-to-Corp): An arrangement where services are provided through a business entity rather than a direct individual employment relationship. 

Each arrangement comes with different compliance, documentation, onboarding and payment requirements. Having the infrastructure to support W-2 employees does not automatically mean an agency can onboard 1099 independent contractors or manage C2C engagements. 

For UK agencies entering the U.S. market, this is an important consideration. A client may require a particular engagement arrangement, or a suitable candidate may operate through their own business rather than as a W-2 employee. 

The question is whether the agency has the necessary compliance arrangements and operational support in place to accommodate these different worker types. Without that capability, agencies could find themselves turning down viable contract opportunities or identifying suitable candidates they cannot onboard. 

3. Can You Realistically Meet the Required Start Date? 

Speed matters in U.S. contract recruitment, particularly when clients need specialist skills for time-sensitive projects. 

The U.S. employment market also differs from the UK. At-will employment is the prevailing model across most states, and employees generally aren’t subject to the same statutory notice requirements common in the UK. Some candidates may therefore be available to start relatively quickly. 

However, candidate availability is only part of the equation. 

Before confirming a start date, agencies need to establish whether the necessary arrangements can be completed in time. Depending on the engagement, these may include contracts, employment eligibility verification, onboarding documentation, payroll setup and state-specific requirements. 

A client requesting a contractor to start the following week may be presenting an achievable opportunity if the agency already has the necessary arrangements in place, whether through its own U.S. operations or a staffing-focused Employer of Record (EOR) that can handle onboarding, employment documentation and payroll setup within the required timeframe. 

For an agency entering the U.S. market for the first time, the same timeframe could be difficult if it still needs to establish how the worker will be engaged and paid. 

4. What Are the Client’s Payment Terms, and How Will You Fund Payroll? 

Contract recruitment can generate recurring revenue, but it also creates ongoing financial commitments that agencies must account for. 

One of the biggest considerations is the difference between when workers must be paid and when the client pays the agency. 

Depending on the engagement and applicable requirements, workers may be paid weekly or biweekly, while clients operate on Net 30, 45 or 60-day payment terms. 

This creates a potential funding gap, particularly when the agency must pay workers before receiving payment from the client. 

Consider an agency supplying three contractors, each working 40 hours per week at $60 per hour. Together, they generate $7,200 in weekly gross pay, before employer costs and other expenses. 

If the client operates on Net 60 terms, the agency could be funding several weeks of payroll before receiving payment, depending on invoicing and payment schedules. 

As contractor numbers increase, so can these financial commitments. This is why payment terms need to be considered alongside placement margins. A contract may be profitable on paper, but the agency still needs sufficient working capital or an appropriate funding arrangement to meet payroll obligations. 

Payroll funding, factoring or suitable third-party arrangements may help manage this gap, depending on the agency’s business model. 

5. Could This Expand Beyond the Initial Placement? 

An initial contract requirement may be the beginning of a much larger client relationship, particularly if the business has ongoing hiring needs or plans to expand into new markets. 

For UK recruitment agencies, understanding the client’s longer-term plans can help establish the potential value of the account beyond the immediate placement. Is the requirement tied to a single project, or does the client anticipate further hiring?  

These conversations give agencies a better understanding of where the relationship could lead and whether there is an opportunity to develop the account beyond the original requirement. They can also help inform how much time and resource the agency chooses to invest in pursuing the business. 

A single placement may be worthwhile on its own, but understanding the client’s wider hiring plans provides a clearer picture of the commercial opportunity.