A temp agency (also known as staffing agency, employment agencies and temporary staffing) is a business that places temporary workers into short to long-term contract positions.
Job seekers can get access to many industries including construction, industrial, tech and human resources - and businesses looking for employees can get access to a large pool of skilled workers.
But temporary work is not the only end game…
Companies who hire staffing agencies to fill temporary positions can also choose to turn the contract into a permanent position.
In fact, half (49%) of all short term employees say that temp work is a good way to get a permanent job.
And over one-third (35%) of short term employees were offered a permanent job by the company where they worked on contract.
After a period of time, part time work can lead to a solid, long-term career.
Benefits for Employers to Use a Staffing Agency
Temp agencies are not only good for employees - they’re an ideal choice for companies and employers for several reasons as well.
A 2016 Harvard and Princeton study shows that 94% of the total employment growth in the US economy from 2005-2015 is a result of temporary workers, independent contractors, on-call workers and freelancers.
So it's no surprise that working with the right temp staffing agency can bring the following benefits:
- Convenience - add or reduce worker payroll based on business needs (high vs low seasons)
- Fill-ins - temp workers can take the place of absent employees, like those on maternity leave or disability
- Cost Savings - save on workers’ compensation payouts, medical/dental benefits, health insurance, vacation/sick pay, retirement and other income security benefits, that are normally reserved for full and part-time employees
- Quick Talent - get quick access to skilled workers that are properly suited for any particular job
- Training Costs - save on training new employees by getting access to skilled workers who already have the right experience and credentials
The need for temp jobs is expected to rise in the coming years - this is due to the fact that temporary work gives employees more flexibility with their schedule, and employers the ability to focus on their core business by outsourcing the hiring process.
How Does a Temp Agency Work?
In plain terms a temp agency works as an extension of an HR department, Hiring Manager or Project Manager. And in many cases a temp agency can perform these hiring duties more efficiently.
The secret to this lies in a temp agency’s massive applicant pool of pre-screened employees and the fact that workers see temp agencies as a place that will get them a secure paying job even in a difficult market.
The Temp Agency Process
When working with a staffing agency, here’s what a business can typically expect from start to finish:
- The business is in need of new employees and comes to a staffing agency looking for jobs from a pool of skilled workers
- The agency qualifies and screens the workers (in most cases this is already done) to weed out the applicants that won’t fit based on skill sets
- The business enters into a contract with the agency, that defines the type of workers, the cost paid per hour of work, as well as other details
- The agency selects the right workers based on the skills needed and sends them to their new placement
- The agency pays the new workers their hourly wage
- The employer pays the agency based on hourly wages of all workers staffed, plus an extra amount to cover agency services/expenses
Here is a deeper look into the duties that are performed by a temporary employment agency
Simple Recruitment
Staffing agencies collect all resumes and certifications in order to screen applicants before job placement. Interviews are also done in order to reduce the overall hiring strain on employers.
Background and reference checks (and in some cases drug testing) are completed to agency standard. This makes sure that the applicant pool is filled with the highest quality employees before a contract with an employer is even signed.
Effortless Training
In some cases specified knowledge, skills and experience is needed to do a certain job - a good temp agency will make sure that only employees with the necessary training and skills are deployed to a job site.
Quick Placement
Based on working conditions, laws, required duties and additional skills, the temp agency will place the necessary worker at the job site necessary gear needed to perform their duties. In many cases a good temp agency can place travelling workers at a moments’ notice.
Care-free Payment
Temp employees are on “loan” to the employer, which puts the responsibility of hourly wage payment in the hands of the temp agency. They are also responsible for additional payroll such as workers’ comp, unemployment insurance, social security benefits and government tax deductions.
Available Recourse
The business is responsible for supervision of the temp employee. If the employee does not meet the needs of the business most temp agencies will agree to terminate the contract within the first 8-hour day.
Specialized Staffing Agencies Means Better Temp Workers
But before a business outsources their hiring process - here’s one major warning - they should make sure to only hire a temp agency that specializes in their industry.
The average staffing company has a large pool of unskilled workers who can be placed in generalized roles and basic job positions.
These are the kind of jobs that require little training and no special skill sets or industry experience.
If a company is in the market for skilled labor, then a generalized temp agency just won’t do.
Properly vetting a staffing agencies experience in a given industry, such as construction or tech, is the best way to make sure that a business receives exactly what they need.
This can help avoid costly mistakes on the job, and make sure that the business gets the full benefits to hiring a qualified temp agency.
