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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:
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.
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.
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.
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.
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.
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.
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:
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.