Do you want to start contracting workers through a staffing agency? If YES, here are 6 easy ways to contract workers through a staffing agency in 2023. A staffing agency indeed can save your business time and money. This agency acts as a middleman between employers and workers, helping to match qualified candidates with companies that have current job openings.
If your business needs additional labor, working with a staffing agency can save your company time, plus it offers other benefits as well, including flexibility and reduced potential legal risks.
Finding qualified talent remains a tough task for many small companies. Reviewing applications, interviewing candidates, and negotiating salaries tend to take precious time away from a business owner’s existing obligations, which may end up hurting the business in the long run. That’s why most employers prefer to partner with staffing agencies, which takes a lot of the time and effort out of the search for candidates.
For senior-level management positions, a company may choose to hire an executive search firm, also known as head-hunters. An executive search firm works under a retainer agreement and leverages a set code of standards to identify and place workers in these highly visible positions.
Staffing agencies charge around 25% to 100% of the hired employee’s wages. So, for instance, if you and the staffing agency have agreed on a mark-up of 50%, and the new employee earns an hourly wage of $10, you will pay the agency $15 per hour for their work. Coupled with the mark-up you will pay, you may be expected to cover additional fees for filling the position or a contract buyout fee if you hire a temporary worker permanently.
However, one of the most widespread misconceptions about hiring a staffing agency is that it’s too costly to be worth it. Why pay extra in recruiting fees when you could hire someone yourself? You might think you’re saving money upfront, but in the long run, using a staffing agency might save your company money.
A good number of companies will only look at the agency’s fees to determine the cost but typically fail to understand the value and savings they can provide as well. Time to hire is a crucial factor when it comes to how much an open position can cost a company. The longer a position is open, the higher the cost, due to a loss in productivity and diverting resources.
Indeed, working with a staffing firm can help decrease the time to hire and also decrease a loss in productivity. As employers increasingly turn to part-time, freelance, and temporary workers to fill in their workforce gaps, staffing agencies have become a valuable resource for finding that talent quickly and efficiently.
Steps to Contract Workers through a Staffing Agency
Using a staffing agency isn’t the right choice for every business, but if you’re considering working with one to meet your hiring needs, here’s what you need to know about the process.
Table of Content
- Understand Your Company’s Needs
- Weigh The Benefits Of A Staffing Agency Against The Cost Of The Service
- Reach Out To Staffing Agencies, And Start Asking Questions
- Ensure The Agency Understands Your Business
- Know What The Agency Charges, And How And When You Will Pay
- Be An Ongoing Partner With Your Staffing Agency
Understand Your Company’s Needs
Have it in mind that no staffing agency can serve their clients well without an in-depth conversation about employee needs. Therefore, right before a company meets with a staffing agency, it is imperative to type out specific job duties and necessary credentials. Go over these “wish list” items with the agency to ensure the right candidates are picked first. Without a clear picture in mind, general workers are often interviewed that don’t truly fit the position.
Weigh The Benefits Of A Staffing Agency Against The Cost Of The Service
Using a staffing agency to hire new workers indeed can help cut costs compared to direct hiring. According to experts, the average cost of direct hiring is in excess of $4,000 per employee. Howbeit, using a staffing agency to bring in workers can help a company save on average between 30% and 40% off of that significant up-front amount. Some specific benefits of contracting with a staffing agency include:
- No need to manage payroll: Staffing agencies manage payroll as part of the services provided.
- No need to take care of employee income taxes: Staffing agencies manage employee HR and income tax paperwork, and they handle collecting taxes from workers’ pay.
- Pre-screened candidates: A staffing agency will provide your company with candidates who are pre-screened for various factors, including job-specific skills, and attendance consistency at past jobs. They will also perform background checks.
- Less stressful: Hiring through an agency can be a good way to reduce employee stress from both the hiring process and managing workers on an ongoing basis.
Reach Out To Staffing Agencies, And Start Asking Questions
When contacting staffing agencies about your staffing needs, ensure you have a list of specific skills workers are expected to have to be successful at your company. It also helps to be clear about how long you need the workers and if there’s a chance you might eventually want to make them permanent employees. Questions to consider asking before contracting with an agency include:
- How many clients does the agency serve?
- What industries does the agency specialize in serving?
- Have they worked with other companies in your industry?
- Do they have employees in their pool of temps who are experienced in your industry?
- What is their after-hours policy, and if a worker doesn’t show up, can they send a replacement quickly?
- What is their pricing structure, and is there room for negotiation?
- What training do they offer workers? For example, do they train them to read materials safety data sheets (MSDS) or perform basic quality control (QC) tasks?
- If you like the employee’s performance, what are the terms for making them permanent?
- What sets the agency apart from other staffing services?
- Will you have a dedicated contact person if you contract with them?
Ensure The Agency Understands Your Business
Coupled with the questions above, and explaining the specifications of the jobs you need to be fulfilled, it’s also necessary to explain some details about the broader scope of your business. Take time to describe what your business does and why, and show them your company’s website and social media profiles.
Also, talk to the agency about your company culture so they can choose workers who show the attitude and goals that match your business plans and will be a comfortable fit with your existing employees. Also, discuss some of the primary elements that make your brand unique so the recruiter can confidently describe your company to potential employees. Note that this helps the recruiter find the right people to send to you, and it helps potential employees feel positive about coming to work at your business.
Know What The Agency Charges, And How And When You Will Pay
Note that a staffing agency more or less charges a percentage of the temporary employee’s hourly wages or a percentage of annual wages if you’re hiring a permanent worker. Traditional agencies are likely to use the percentage of wages to set the fees. Temp agencies prefer to charge a fee of 15% to 60% or more of the employee’s base hourly wage. Recruiters providing permanent employees will charge a percentage ranging from 20% up to 30% of the worker’s annual salary.
Also, note that there are some legal protections to look for in your contract with a staffing agency, including information about who is responsible for providing employees with PPE (personal protective equipment) and the training on its proper use as well as whether your company or the agency is responsible for providing safety training.
Be An Ongoing Partner With Your Staffing Agency
Companies that experience fluctuations in demand may gain a unique advantage by being able to upscale or reduce workforce numbers quickly by hiring staffing agencies to manage employee fulfillment. Note that this makes the staffing agency a partner in your company’s success. Some of the things you can do to make the most of the partnership, regardless of the agency type you choose, include:
- Be direct and clear about what skills you require in workers so the recruiting agent can find the best candidates to send you.
- Ensure to keep the lines of communication open. This helps them respond to your needs effectively.
- Discuss concerns you have about legal issues and contractual details to hash out terms, ensuring the agency can meet your needs with no surprises.
- Find an agency that specializes in serving clients in your industry, especially if it is a niche industry, such as the medical field or accounting, which requires special licensing. This reduces the time you need to spend explaining your needs because they’re already accustomed to serving clients in your field who have similar needs.
Indeed it may take some trial and error to find the right staffing company for your business, but once you’ve found one that offers high-quality service and well-qualified workers, stick with it. Furthermore, discussing new workers with your agency representative can help both you and the company with your future talent searches. When hiring from a staffing agency, be clear about your expectations, review legal aspects and stick with the same company if satisfied.