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FAQs

• Is an employment agency the same as a staffing agency?

  While employment agencies and staffing agencies are similar in that they both connect employers with qualified employees, there are differences in the types of employment they focus on. Employment agencies qualify candidates on behalf of employers for long-term or permanent positions. Staffing agencies, on the other hand, typically provide employers with short-term workers. Some specific types of agencies include:

  • Traditional employment agencies help employers find candidates to fill open long-term jobs.
  • Temp agencies provide employers with workers to fill open jobs on a short-term basis.
  • Industry-specific employment agencies have insider knowledge about the skills an employer needs for positions that require special training, skills, or licensing.
  • Recruitment firms manage the recruiting process to help companies find qualified workers.

• How do staffing agencies work?

  Employers contact staffing agencies and list qualifications they need in an employee as well as details about the job, including how long they expect to need the worker. The staffing agencies search through the list of available workers, interview candidates on behalf of the company, and send the most qualified ones out to the work site. Staffing agencies also manage the employee paperwork, such as payroll and taxes, as long as the worker is employed through the staffing agency.

• What is a temp agency?

  A temp agency sends workers with the necessary skills to companies that contact the agency about open, often limited-term, positions. This type of agency manages the paperwork and payroll of the temporary employee while the company pays a contracted fee to the agency to cover the costs of recruiting and managing the HR functions.

• How much do staffing agencies charge?

  Staffing agencies typically charge employers a fee that starts around 20% of a worker's hourly wage to find candidates and manage HR functions on the company's behalf. Some agencies also charge a fee for recruiting employees based on the worker's expected annual salary.

  • Traditional agencies charge the employer a percentage on top of employee wages, though some agencies charge a fee to workers as well.
  • Temp agencies usually charge the employer the worker's base salary plus 15% to 60% or more to cover the costs of recruiting and maintaining payroll and HR paperwork.
  • Recruiters are sometimes referred to as headhunters and these agencies typically charge the employer between 20% and 30% of the employee's first-year wages.

• What companies use staffing agencies?

  Companies that struggle to find qualified workers and those that require a large number of workers to keep the company operating use staffing agencies. Businesses with temporary staffing needs during peak times, such as the holiday season, also use temporary staffing agencies.

  Examples of companies that bring on temporary workers through staffing agencies include manufacturing companies with large orders to fulfill, call centers that need people to answer phones and make sales calls, and warehouses that manage large shipping orders, such as Amazon.

• Do temp agencies provide health insurance?

  Some temp agencies offer health insurance to employees, which provides a benefit for employers who don't want to manage coverage in-house for workers. While it was required under the original Affordable Care Act (ACA), changes to this law have since been enacted. It may now depend on the number of employees the temp service manages or the business decision of the temp agency's management team.

• What is a medical staffing agency?

  Medical staffing agencies provide clinical professionals for various medical facilities and insurance establishments. Hiring through these agencies ensures facilities have qualified professionals on staff. Some of these agencies specialize in short-term positions, such as traveling nurses. The specific types of jobs filled by medical staffing agencies include nurses, pharmacy technicians, physical and occupational therapists, and massage therapists.

• Why do companies hire through staffing agencies?

  Companies hire through staffing agencies for a variety of reasons that affect a company's bottom line and management morale. Reasons for hiring through staffing agencies include:

  • Cutting costs: As of 2016, the average cost to hire a new employee was $4,129, according to the Society for Human Resource Management. Using a staffing agency can reduce that initial cost outlay.
  • Reducing lost HR hours: Hiring an agency also reduces the cost of managing HR paperwork.
  • Stress reduction: Choosing an agency that specializes in helping companies find workers in a specific field can help reduce a manager's concerns and time finding qualified help.
  • Accounting department savings: Using an agency can reduce time spent managing payroll in house by the accounting department for contract staff.

• Are staffing agencies worth it?

  Working with a staffing agency to manage hiring needs benefits a company by providing workers quickly. It also saves a company about 30% to 40% compared to hiring each employee directly and lets employers assess workers' skills without any pressure or expectations from the workers. Some reasons companies might prefer to hire directly rather than use a staffing agency include training workers in-house for specific tasks and keeping employee morale high by choosing workers who are a good fit for the company's established culture.