What Is A Staffing Firm?

A staffing firm fulfills the hiring needs of the client company in accordance with the applicant skills they are looking for.

Their main objective is to fill their clients’ provisional open positions with the most qualified talent.. The people that join the company through staffing firms are not employees but rather temporary workers who are on the payroll of those firms.

  • Businesses usually hire staffing agencies in the following situations:
  • When there is an urgent requirement for skilled talent on a short-term project
  • At the time of seasonal jobs
  • When a company needs a highly qualified individual with a specialized skillset
  • When a company doesn’t have time or resources to manage recruiting process
  • When a business aims to cut recruitment costs (HR department, employee insurance, etc.)
Recruitment agent in a staffing agency, tapping on a virtual screen and choosing the right people

As many as 90% of companies use a staffing service

What Do Staffing Agencies Do?

When client companies need to hire new staff, they contact a staffing firm specializing in their specific industry. The employer specifies the job requirements, the number of employees needed and the required working period.

Based on this information, staffing firms compose a job description, recruit the suitable talent from the database and/or advertise job position(s) on their website or job boards.

Although employment through staffing agencies is often short-term it can morph into a part-time or full-time job.

By registering with a staffing firm, prospective employees have the potential to make relevant connections with managers looking to find candidates for their job openings that suit their description and resume.

Job candidates can browse the opportunities on the agency’s website or other channels (social media platforms), meet with recruiters and discuss their qualifications. From that moment on, the staffing firm manages the entire recruitment and hiring process, gives candidates feedback to improve their chances of success and introduces selected candidates to the employers.

Staffing agencies provide end-to-end staffing solutions and take care of tasks and responsibilities including:

  • Candidates’ contracts and contract termination when necessary
  • Employment taxes (Social security, payroll, etc.)
  • Understanding the client company’s workload needs
  • Vetting prospective candidates through background checks and employment history
  • Follow-ups on temp workers performance

There are several different types of staffing models:

  • Contract staffing
  • Contract-to-hire staffing
  • Direct hire staffing

For temporary positions (contract staffing), staffing agencies are in charge of employee salaries. If and when employees get hired by the client company, the employer takes over the payroll.

On the other hand, if the worker is not the right fit, it’s the responsibility of the staffing firm to terminate the hire and compensate with replacement talent, as needed.

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What Is The Difference Between Staffing Agency And Recruiting Agency?

As both types of agencies act as a middleman between employers and candidates, it’s easy to understand the confusion of differentiating between staffing agencies and recruitment agencies, especially in the remote work era, where candidate engagement became much more streamlined.

Both aim to understand and determine the job candidate profile the employer needs and they also understand what type of job the candidate is looking for.

What makes them different?

Staffing agencies are better equipped to help client companies find short-term employees, whereas recruiting agencies are experts in finding talent for long-term and/or permanent positions.

Staffing agencies are highly valued for their large pool of applicants who are available to work (often at short notice) and who have been thoroughly vetted by the recruitment team.

7 Reasons To Hire A Staffing Firm

By employing staffing agencies to hire recruits, companies can focus on the growth of their business and take on more short-term projects without adding to the overall number of employees.

Besides onboarding and handling payrolls, the main benefits of hiring staffing agencies are:

1. Reducing Overhead Costs And Overtime Pay

Permanent employees cost more than the sum of their salaries. Adding to it are health care, sick leaves, PTOs, retirement plans, not to mention employer taxes.

With temp staffing companies, companies don’t pay any of that, but rather pay for the work done, with no additional overhead costs.

Two of the top three contributors to employee burnout (besides unfair compensation), are unreasonable workload (32%) and too much overtime work (32%).

In order not to put more strain and additional demands on permanent in-house teams, employers also use staffing firms to bring temporary workers to help with tasks during busy times.

2. Emergency Hires

Every business goes through “emergencies” like staff members being sick, on maternity leave, family emergency, quitting, taking leave, absence or vacation... The list goes on.

Working with staffing agencies presents employers with a flexible opportunity to hire someone for a short period to handle these situations and someone who will keep track of every employee’s status.

3. Saving Time And Money On Training

Training new hires demands a significant investment of both time and money. It would be counterintuitive to train a worker hired to cover for a limited amount of time so temp staffing companies provide employers with candidates ready to do required work right from the get-go.

4. Quick Access To Specialists

Sometimes, companies are looking to hire specialists for specific temporary projects that require a certain type of expertise.

The staffing firm can provide employers with a staffing expert and save them valuable time by going through hundreds of resumes and references to find a perfect candidate. This way, staffing firms help specialist workers while saving employers time and money so they can focus on other core business aspects.

5. Access To Talent Networks

The best staffing agencies spend years broadening their talent pool through referrals, networking and speaking with candidates. Your typical employer generally doesn’t have time or resources to constantly engage with potential talent.

Businesses can expand a talent pool 10 times by recruiting through employee networks. Temp staffing agencies deliver qualified talent in less than a day due to its extensive network of candidates.

6. Industry Market Knowledge

Another handy benefit of working with staffing agencies is that employers gain access to insider knowledge of available, skilled candidates, their status, employee history, salary ranges and local market trends.

7. Employee Tryouts

It can be hard to determine whether your new hire will fit into the team. Starting out as a contract worker gives the employer an opportunity to evaluate the new recruit’s team-playing qualities and whether a new addition is a good match for the company.

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How To Choose The Best Temp Staffing Company For Your Hiring Needs

Choosing the right staffing firm to partner with can be a time-consuming endeavor and you don’t want to waste your time working with someone unable to meet your requirements.

When reviewing staffing agencies, before you make a choice, take these tips into consideration:

1. Evaluate Your Staffing Needs

Before you start your search for a staffing firm, make sure you know exactly what your hiring needs are.

Do you need someone to work on short notice, on a short contract, contract-to-hire or are you willing to hire someone on a direct-hire basis?

2. Agency’s Industry Knowledge

When evaluating different staffing firms, you may notice that many, if not most of them, are specialized in their industry.

You will want to find one that has a deep understanding of your specific industry/niche, relevant experience, as well a strategic approach to engaging top-tier talent.

3. Cost Of Service

Be aware that choosing an agency simply because it’s the cheapest one can be a huge mistake and even cost you more in the long run.

As always, if it looks too good to be true, it usually is. On the other hand, it’s pointless to look for the best temp staffing firms on the market if you can’t afford them.

Stay within your budget and search for an agency that won't cut corners when searching for temporary employees Make sure they provide a copy of their “certificate of insurance” (COI).

4. Agency’s Recruitment Process And Resources

When interviewing your prospective partners try to understand their candidate sourcing strategy; ask them about their specific selection process for finding, engaging and attracting candidates.

What recruiting tools and resources are they using? Which platforms? Are they using AI recruiting software? How many years have they spent building their candidate network?

5. KPIs

Once you narrow down your search, it’s time to finalize the selection process by evaluating your potential partners’ ability to deliver results. Ask for information on their important key performance indicators (KPIs) including:

  • Time to hire
  • Cost to hire
  • Quality of hire
  • And more

The best staffing agencies will aim to custom-tailor a timely solution that addresses your staffing needs and provides you best possible hire.

How Much Do Staffing Agencies Charge For Their Services?

Staffing agencies typically charge 25% to 100% of the hired employee's wages.

For example, if you and your chosen staffing firm agreed on a markup of 25%, and the new employee earns $10 per hour, you will pay the agency $12.5 per hour for their work.

Hiring someone on a full-time basis through a staffing agency usually costs a lump sum fixed percentage fee based on the hire’s first-year salary.

When it comes to the contract-to-hire model, employers pay as they go with the ability to end the contract any time if something is not working out.

10 Questions To Ask Temp Staffing Companies Before You Hire One

Before selecting one of the shortlisted staffing firms, make sure to gather as much information as you can about their approach, selection process, their resources and quality of work.

Ask them the following questions:

  1. What industry does your agency specialize in?
  2. What types of staffing services do you provide?
  3. How do you handle the sourcing, vetting, screening and selection process?
  4. How extensive is your talent network and how can we benefit from it?
  5. What are your rates and fee structure?
  6. What guarantees do you offer when placing workers and how do you handle poor hires?
  7. How does a typical hiring timeline look like? How long does it take to present qualified candidates?
  8. How do you offer value to our internal HR team?
  9. What technology and tools do you use and how does it make it easier to do business together?
  10. Do you expect your rates to be higher, lower or about the same as other agencies we may consider? Why?

Takeaways On Trusted Staffing Solutions

Staffing firms fulfill the hiring requirements of employers in accordance with their business needs.

They handle responsibilities like:

  • Candidates’ contracts
  • Employment taxes
  • Understanding the client company’s workload needs
  • Vetting prospective candidates
  • Follow-ups on temp workers performance

The benefits of working with temp staffing firms include:

  • Reducing overhead costs and overtime pay
  • Efficient emergency hires
  • Saving time and money on training
  • Access to specialists
  • Access to talent networks
  • Possibility of employee tryouts

When choosing a staffing agency to partner with, be mindful of:

  • Your staffing needs
  • Agency’s industry knowledge
  • Agency’s recruitment process
  • Cost of service
  • Meaningful KPIs

Best of luck!

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