Staffing Agency Contracts are created to describe the agreed-upon terms associated with the staffing services being provided. By accepting this agreement, all signers are likely to share the same set of expectations. Whether a staffing agency is providing full-time, part-time, or temporary staff for an employer, creating documentation of your engagement is key.

For the better part of the past hundred years, staffing agencies have offered companies of all sizes an option to deviate from traditional, in-house hiring and employment practices. Although these agencies have grown and scaled over time to better fit the growing demands of the business world, their prevailing philosophy has stayed relatively consistent—to offer a wide range of businesses an army of quality laborers who are available to work on a temporary, seasonal, or temp-to-hire basis.

However, the primary objective of staffing agencies is to match qualified candidates with clients eager to fill employee positions. Traditionally speaking, these specialized job agencies were created in order to provide large businesses with a large volume of talent, but many have evolved to include temp-to-hire and, in some cases, full-time position placements.

In those situations, the staffing agency acts as a de facto, contracted human resources department, managing the hiring of the client’s short-term and long-term workers. In addition to placement, background checks, drug testing, reference screening; skills training are conducted by temp agencies, particularly the larger, more all-inclusive firms.

Since the agency’s contract is on the line if it doesn’t deliver reliable talent, clients see this as an added advantage that could lead to boosted productivity, particularly in the short term. It is not all roses though: One of the primary setbacks companies find in working with staffing agencies is that time-to-fill rates can be exceedingly long, making it an inconvenient (if not entirely unrealistic) solution for companies that steadily have to fill shifts or secure qualified talent on short notice.

Have it in mind that any agency operator deciding not to make a Staffing Contract can anticipate some issues, including questions about timing and uncertainty about fees. It is also important to note that the agencies don’t just provide financial stability; they are also on the hook when it comes to physical safety as well. For example, if a worker is placed at a factory, it is the responsibility of the agency to ensure that the work environment is suitable.

How to Navigate a Staffing Agency Contract

Making a Staffing Agency Contract will be helpful to you because it helps to ensure that all roles and responsibilities are understood by all, and there are no surprises about how long the engagement will last, and there is no confusion about compensation. Howbeit, to properly understand the content of a staffing agency contract and make a reasonable decision, here are key points to note;

  1. Understand The Industry Specific Terms

Dealing with a staffing agency means you must become informed about the field. Understanding industry-specific terminologies will let you ask crucial questions before signing the dotted line.

  • Terms specific to the staffing industry include direct hire, temporary, temp-to-perm, and assigned employee.
  • Direct hire is when the agency finds an individual to fill a permanent position.
  • Temporary involves filling a position that involves a specific time period.
  • Temp-to-perm involves placing an individual on a temporary basis, with the possibility of being hired as a permanent employee.
  • Assigned employee is the term used for any individual the agency fills your open position with.
  • Contacting a sales consultant who is specially trained in understanding staffing agency contracts can be your key to success to help your firm expand.
  1. Understand The Agency’s Duties And Responsibilities

Have it in mind that staffing agencies can provide a wide range of hiring options to satisfy many businesses. Do you need a temporary agency to provide you with extra personnel to work on a special project? Do you need an employee, but are hesitant to hire one without testing her out first? If so, you may need an agency that does temporary-to-hire staffing.

  • Extensively understand what services the staffing agency will offer. Will they pay the employee’s payroll taxes or expect you to do this? Did they require the employee to sign a confidentiality agreement to protect you? Or, do they expect you to do that?
  1. Know What Is Expected Of You

Remember that even clients have certain duties and responsibilities as well, as specified in the contract. Duties may include providing a safe work environment, properly supervising the employee, and not changing assigned duties without first notifying the staffing agency.

  • Right before signing the contract, take your time to discuss with your staffing agency professional whether there are any penalties involved. If so, what situations warrant the penalties? For example, you may be financially liable for assigning new duties to your assigned employee.
  1. Understand The Rates And Fees Involved

Note that placement fees are the amount you pay for the privilege of doing business with a staffing agency. The agency is getting a new hire, going through the interview process, and referring the individual to you for final approval. All these involve time, money, and knowledge. A placement fee can be either a percentage of the employee’s annual salary or a predetermined amount.

  • Your staffing agency may have extra fees such as a hiring fee when you permanently hire a temporary employee. Be sure your contract has a clause stating what the fee will be and how it will be determined.
  • Know that extra bill rates may happen when the staffing firm incurs increased or new labor costs associated with your new employee. Costs include benefits, payroll taxes, wages, and social program contributions.
  1. Read The Fine Print

Although contracts can be quite daunting to go through, do not make the mistake of skimming over the fine print. As tiring as it can be, read this information with a keen eye. This is where hiring a professional can be especially helpful.

  • Whenever you do not understand information, ask the staffing agency and if the answer you get is not satisfactory, find another staffing agency. There is no such thing as a stupid question.
  • If something is not the way you want, tell your staffing agency professional that you want your attorney to look over the contract. A reputable staffing agency will have no problem with this request.
  • Fine print is where you will find additional financial information that can make or break your business relationship.
  • Entering into a staffing agency contract can be one of the best decisions you and your business make when hiring a new talent. If you still are uncertain about the legalities involved, hiring a sales recruiter who is specially trained in dealing with staffing agencies will keep you protected.

Frequently Asked Questions

  1. How Do You Start A Contract Staffing Agency?
  • Conduct your market survey and feasibility studies
  • Learn everything you need to learn about owning and operating a contract staffing agency
  • Choose a name and register the business
  • Draft a detailed Business Plan
  • Secure the needed licenses and permits
  • Apply for an EIN (Employer Identification Number) / Federal Tax ID Number.
  • Open a corporate bank account
  • Lease, equip and furnish your office
  • Hire employees
  • Market and promote your services
  1. How Do You Get Out Of A Staffing Agency Contract?

The first step you should take is to contact your agency representative and inform them of your decision to leave, especially if it is prior to the agreed date.

  1. What Are The Benefits Of Using A Recruitment Agency?
  • Access to the best candidates.
  • Save time and money.
  • Industry expertise.
  • Expert recruitment law opinions.
  • Enable business growth & innovation.
  1. How Do Staffing Agencies Get Clients?
  • Leverage Candidate Relationships.
  • Utilize Job Boards.
  • Ask for Referrals.
  1. What Details Are Needed In Your Staffing Contract?
  • Job information
  • Compensation and benefits
  • Time off, sick days, and vacation policy
  • Employee classification
  • The schedule and employment period
  • Confidentiality agreement
  • A technology privacy policy
  • Termination terms and conditions
  • Severance or outplacement plan information
  • Requirements after termination
  1. How Do You Get Hired As A Temp?

The process of using a temp agency is relatively simple for workers. It’s just like applying for a job. You submit a resume (possibly online, depending on the agency), fill out an application, and have an interview.

  1. Should I Use A Staffing Agency To Find A Job?

Using a staffing agency to find a job will help get your resume in front of more employers – some you might not have even known were hiring! Recruiters work closely with the companies they send people to so they always have the latest insight on available positions at companies.

  1. How Long Can My Employer Keep Me On A Temporary Contract?

An employee can be kept on successive fixed-term contracts for a limit of four years. If your contract is renewed after that you become a permanent employee unless the employer can show a good reason why you should stay on a fixed-term contract.

  1. How Do You Recruit Clients?
  • Take advantage of job posting websites.
  • Use social media.
  • Try email marketing.
  • Cold call prospective clients.
  • Gather referrals.
  1. How Do You Manage A Staffing Agency?
  • Define why you are better than competitors.
  • Find the right clients.
  • Find the right temporary employees.
  • Become a master match-maker.
  • Master human resources and relations.
  • Master organization.
  • Watch your cash flow carefully.
  1. What Is The Difference Between A Staffing Agency And A Temp Agency?

Temp agencies and staffing agencies offer temporary workers to their clients. While temp agencies only offer temporary work, staffing agencies focus on the long term needs of their clients as well as placing candidates in what can turn out to be full time employment.

  1. Do Staffing Agencies Charge A Fee?

Staffing agencies typically charge 25% to 100% of the hired employee’s wages. In addition to the markup you will pay, you may be expected to cover additional fees for filling the position or contract buyout fees, if you hire a temporary worker permanently.

  1. Should Every Staffing Agency Write A Contract For Staffing?

Yes, it is very important for every staffing agency to write a contract for staffing because it will help put things in proper perspective.

  1. Who Pays The Headhunter Fee?

The hiring organization pays the headhunter. The fee level will vary considerably based on the nature of the service provided. A retained executive search fee is typically calculated based on the total compensation of the successful candidate – 33% is not unusual.

  1. How Do You Make Your Recruitment Agency Stand Out?

You can make your recruitment agency stand out when you;

  • Hire qualified and certified staff members to fill strategic positions in your organization
  • Work with key players in various industry
  • Hire experts to handle your PR and branding
  • Position your office in a strategic location in your city
  • Be deliberate with the output of your job and make sure your customer services is top-notch.
  1. What Is A Typical Headhunter Fee?

The average percentage fee is 20-25%, though it can range from as low as 15% to as high as 40% or more, depending on the firm the headhunter works with and the type of job position being filled.

  1. What Are The Best Staffing Agencies For 2021?
  • Best Overall: Randstad.
  • Runner-Up, Best Overall: Robert Half.
  • Best for Executive Hiring: Korn Ferry.
  • Best for Temp or Hourly Workers: Adecco.
  • Best for IT & Tech: TEKsystems.
  • Best for Health Care: FlexCare Medical Staffing.
  1. What Industries Use Staffing Agencies?

Here are 5 industries best suited for utilizing temporary labor and staffing;

  • Light Industrial/ Manufacturing Staffing.
  • Hospitality Staffing.
  • Shipping/ packaging Staffing.
  • Clean-up Staffing.
  • Agricultural Staffing.
  1. How Much Does It Cost To Start A Staffing Agency?

Generally, the cost of starting a staffing agency is dependent upon size and a host of other factors. Start-up costs can range from $58,000 to $127,000, and you should have a suggested operating capital of between $80,000 to $135,000.

  1. How Much Money Can You Make Owning A Staffing Agency?

A Bullhorn survey of 1,337 staffing agency employees found that HR professionals at North American organizations had an average salary of $81,000. That’s nearly half that of the average staffing agency partner, owner or CEO, who earns around $154,000.

  1. How Do I Run A Successful Staffing Agency?
  • Streamline your entire recruiting process.
  • Create a ‘follow-up’ system.
  • Optimize for mobile.
  • Share success stories.
  • Respond to client feedback on social media.
  • Collect client feedback.
  • Understand your client’s industry.
  • Adopt efficient collaboration tools.
  1. Can Recruiters Make Millions?

There is virtually no limit to the amount of money they can make. According to www.glassdoor.com, the national average salary for internal recruiters is $45,360.

  1. How Do You Generate Staffing Leads?
  • Lead generation for recruiters
  • Talk to the people you know.
  • Network with locals.
  • Contact lapsed clients.
  • Talk to current clients.
  • Backfill positions.
  • Use a recruiting network.
  • Use social media.
  • Optimize your website.
  1. What Percentage Does A Staffing Company Take?

Staffing agencies typically charge 25% to 100% of the hired employee’s wages. In addition to the markup you will pay, you may be expected to cover additional fees for filling the position or contract buyout fees, if you hire a temporary worker permanently.

  1. Can I Hire A Headhunter To Find Me A Job?

Headhunters work exclusively as third-party agencies that companies hire to fill vacancies. However, candidates can also work with headhunters to help them find a job.

  1. How Do You Start A Recruitment Agency With No Experience?

Although you would need relevant experience to be able to start and manage a recruitment agency, but however, if you want to start a recruitment agency without having the required experience, then you would need to partner with someone who have the required experience or hire a Chief Operating Office (COO) with the required experience, business exposure and qualifications.

  1. How Much Do Staffing Agencies Make Per Employee?

Staffing agencies typically charge 25% to 100% of the hired employee’s wages. So, for example, if you and the staffing agency have agreed on a markup of 50%, and the new employee earns an hourly wage of $10, you will pay the agency $15 per hour for their work.

  1. What Makes A Good Recruitment Agency?

Highly effective recruitment agencies provide plenty of training for their recruiters to help enhance and upgrade their skills. Recruitment firms must work well with their clients’ managers and staff to ensure that all requirements and demands have been met.

  1. Which Recruiters Make The Most Money?

On top is Salesforce, with a reported average salary of $134k, closely followed by Uber, where their Senior Technical Recruiters can expect an average pay of $126k including commissions.

  1. How Do Staffing Agencies Get Corporate Contracts?

In order for a staffing agency to get corporate contracts, they would need to build their corporate profile to suit the requirements of corporate clients, and then pitch their services to their target corporate clients.

  1. Is Staffing A Good Industry?

The Staffing Industry is Larger than Most People Realize, Yet it’s Highly-Fragmented. Staffing is a $174B industry – and one of the fastest-growing industries in B2B services. There are over 20,000 staffing and recruiting companies in the U.S., operating over 39,000 offices combined.

  1. How Do You Know If You Are Hired By Amazon Or A Staffing Agency?

If you are hired directly by Amazon, they will notify you by email. An email will come straight from Amazon if you have been hired. Amazonians are typically blue badges while staffing agency are white badges.

  1. What Temp Agency Works With Amazon?
  • Integrity Staffing Solutions.
  • Staff Management.
  1. Do I Need To Issue 1099 To Staffing Agency?

No – The staffing agency would be considered a vendor and you will not have to send them any Form 1099-MISC related to using their services.

  1. How Long Can You Work For An Agency?

After 12 weeks in the same job, agency workers are entitled to equal treatment as if they had been recruited directly by the hirer. This includes key elements of pay, but also other entitlements such as annual leave.

  1. How Do You Minimize Staffing Agency Snags?
  • Ensure that HR is involved.
  • Provide detailed job descriptions.
  • Recognize that not all staffing agencies are equal.
  • Conduct spot checks.
  • Focus on safety.
  1. Is Temping Bad For Your Career?

Absolutely, no, and this is so because it offers numerous advantages and the flexibility to still job search while you earn money in the process. Temping often holds over households while they transition from one full-time job to another.

  1. Do Recruitment Agencies Take A Cut Of Your Salary?

Standard recruitment costs tend to range between 15% and 20% of a candidate’s first annual salary, but this can go as high as 30% for hard to fill positions.

  1. What Is The Difference Between A Recruitment Agency And Employment Agency?

In contrast to a staffing agency, a recruitment agency (also known as an employment agency) tends to focus on permanent recruitment. They will be given a detailed brief from the employer and will be tasked with finding the right candidate for that position.

  1. Who Is The Largest Staffing Company In The US?

In terms of revenue, Allegis Group is the clear leader in the U.S. staffing market, with 10.48 billion U.S. dollars in 2019, the group generated over twice the income of their nearest competitors, Randstad and Adecco.

  1. Are Staffing Companies Worth It?

A staffing agency can save your business time and money and find well-qualified candidates. A staffing agency acts as a middleman between employers and workers, helping to match qualified candidates with companies that have current job openings.

  1. What Happens If You Get A Job Through An Agency?

The agency interviews the job seekers and places them in appropriate positions. Typically, the agency then pays the selected candidate to work for the client company. If the company decides to hire the job seeker permanently, the staffing agency will no longer pay the job seeker.

  1. How Long Will It Take To Get An Interview Request?

It depends on the company and the urgency with which they intend filling up he available role.

  1. How Do You Get Your First Client?

Most often than not, you get your first client from referrals or from your family members and friends.

  1. What Are The Disadvantages Of Staffing?

Temps may not be treated with much respect by others, and they may even be perceived as a potential threat by long term workers who have grown to be less motivated. An issue with few temps is that they may not seem as committed to the business objectives as permanent employees.

  1. How Can You Become A Staffing Agency For Amazon?

To become a staffing agency for Amazon, you would need to apply on Amazon’s careers website would need to reach out to their recruiters on LinkedIn. Make sure your resume is well-formatted and typo-free. Study the company’s 14 leadership principles, and be prepared to talk about how you’ve demonstrated them.

  1. What Are The 6 Functions Of Staffing?

The staffing function includes recruitment, selection, training, development, transfer, promotion and compensation of personnel.

  1. Does Amazon Use A Temp Agency?

Amazon hires contingent workers and temps through staffing agencies and consulting companies but does not publish their preferred vendor list.

  1. How Do Recruitment Agencies Make Money?

An agency finds candidates for a vacancy. The business then pays the agency upon hiring one of their candidates. Standard recruitment costs tend to range between 15% and 20% of a candidate’s first annual salary, but this can go as high as 30% for hard to fill positions.

  1. How Do I Choose A Staffing Agency?
  • Evaluate your staffing needs.
  • Do your research on potential staffing agencies.
  • Evaluate the cost of services and contracts.
  • Understanding the agency’s recruitment process.
  1. How Can One Apply For Technology Contracting Positions Without Going Through A Staffing Agency?

Check the company’s website, get their address or the link to their job portal and then send in your applications directly to them.

Solomon. O'Chucks