Why do staffing agencies have a bad reputation?

The staffing industry tends to get a bad reputation due to the misconception that they submit candidates for roles without properly assessing their skills . This is highly incorrect. A good staffing agency limits the number of orders they take on so they can appropriately focus on the obligations of an individual role.

What are the disadvantages of using an agency?

As agencies are external to your company, communication may sometimes cause confusion that interferes with results . Both parties need to make an effort to improve communication. You must be clear about your objectives and provide the agency with the correct information to create and execute strategies.

What is the future of the staffing industry?

For 2024, the staffing industry is poised for continued growth thanks to three key reasons: the evolving nature of work, the need for flexible staffing, and the rapid growth of the gig economy.

Is it a good idea to use a staffing agency?

Simply put, you're paying for the assistance of someone in the know. Employment agencies work directly with employers and often have a better idea of exactly what they're looking for. They may also know of positions that you'd be unlikely to hear about on your own. Agencies can also help you be a better candidate.

What are the problems with staffing?

Staffing issues are any challenges your business faces related to your employees. Issues in staffing can include anything from high turnover to dealing with employees who aren't quite performing at their best . If it's an issue involving your employees, it's probably a staffing problem.

Why do staffing agencies fail?

Poor Cash Flow . Cash flow is the lifeblood of any business. In fact, 82 percent of business ventures fail due to poor cash flow. Unfortunately, times are even tougher in the staffing industry, where staffing agency owners face upside-down cash flow.

Why do staffing agencies make so much money?

So after starting a staffing agency, how does this money come in? As a business that services almost all industries, staffing agencies make money from the fees paid for recruiting services . Their earnings come from providing workers to companies who are looking to employ them.

Are staffing agencies becoming obsolete?

Labor demand may be lower than in 2022, but businesses are still hiring, and opportunities for staffing agencies remain .

Why would a company use a staffing agency?

Companies may prefer to hire temporary staff to support a project during times of increased work volume or for seasonal work , such as during the holidays. IT staffing agencies can also provide short-term staff for when an employee might go out on leave for maternity or other reasons.

What is one of the biggest advantages to companies in using a staffing agency?

One of the biggest advantages of partnering with a staffing agency is access to a vast and diverse pool of prospective individuals . They have an extensive network of candidates, including passive job seekers who are not actively searching for employment.

How do staffing agencies save companies money?

It saves money — Using a staffing agency can save your company money on things like pre-employment testing and background checks . With an agency, you can reduce your cost per hire. You also don't need to hire a recruiter to conduct interviews or screen candidates.

The Pros And Cons of Staffing Agencies (2024 ) (2024)

The Pros And Cons of Staffing Agencies (2024 ) (1)

There are pros and cons to using a staffing agency and it is important to weigh them when hiring employees for your business.

As recruiters, we obviously feel there is a sound advantage to using a staffing company but we list some of the pros and cons when using a staffing agency to help you make a more informed decision when accessing staffing needs.

A list of the common pros and cons of staffing agencies.

PRO: Staffing agencies reduce business liability

The temporary worker performs duties as an employee under the business’s direction.

A staffing agency covers workers’ compensation insurance, general liability insurance, takes out payroll taxes, pays the worker, and covers other costs associated with employment.

Using a staffing agency gives an employer the ability to try out an employee before making a long term commitment observing their work habits, skillset, and interaction with full-time employees lowering hiring risks.

If a contract employee becomes sick and contracts COVID-19 the staffing agency (depending on size) is responsible for paying the employee under Families First Coronavirus Response Act (FFCRA or Act)

This employment law requires certain employers (depending on size) to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.

CON: Training contractors can take time

Having a contract temp worker come on board usually means the learning curve is shortened as work must be completed quickly and efficiently.

PRO: Staffing agencies reduce time to hire

As an employer, you do not have to sift through hundreds of unqualified applicants when hiring available job seekers or waste time talking with uninterested candidates.

A good staffing agency saves you time and costs associated with finding better-qualified candidates while reducing the time to fill cycle. With many different positions such as a engineer or payroll accountant.

They check references, screen candidates for the right qualifications, shortlist potential hires, and complete background checks during the offer stage.

CON: Potential team bonding and culture issues

A temporary worker may not mesh well with long term employees.

Full-time employees and temporary staff may have a short term view of each other resulting in reduced team bonding and interpersonal interaction.

PRO: Staffing agencies have deep talent pools

The best staffing agencies have spent years building a database of quality candidates to aid in filling jobs with the best talent possible such as agency for RN staffing.

Posting a position on a job board and hoping for great candidates to apply is hit or miss. This method can take weeks if not months to find a great candidate if you are even able to find the right permanent employee at all.

A staffing agency reduces an employer’s time to hire job cycle to days, instead of weeks and months by leveraging their large talent networks to find candidates within the time frame requested saving time and money.

CON: Some control of the hiring process is lost

You are outsourcing part of the hiring process, the staffing agency doesn’t know your company culture as well as you do and if you use the wrong staffing firm they may not present your employer brand and opportunity as well you could.

PRO: Staffing agencies save employers money

Using a staffing agency eliminates upfront costs used to market, find and attract talent, they also reduce employer’s overhead by eliminating benefits costs, improve an employer’s cash flow, and reduce overtime costs associated with the company’s full-time regular employees.

CON: Poor recruitment processes

Not all staffing agencies spend time and resources to develop and nurture deep candidate networks.

Because of this companies may receive resumes that are subpar and not up to the standards the employer requires.

By working with a recruitment agency that specializes in the types of positions the company is looking to fill an employer can avoid issues like these aiding in finding that perfect candidate.

If you have open positions in your IT department filled make sure you reach out to top IT staffing agencies instead of a general agency that usually places warehouse personnel.

PRO: Staffing agencies offer Flexibility

During times of economic uncertainty and general slow periods, staffing agencies offer employers the flexibility of bringing on skilled contractor workers to complete short term projects and assignments.

An employer as the ability to hire a contractor to complete the work and then when the assignment is completed they can let the contractor go with no issues.

This creates a win-win situation as the contractor is able to make money being employed and the employer reduces there long term costs.

PRO: Save time on onboarding and payroll costs

The staffing firm takes care of the contract employees onboarding paperwork such as W4, I-9, and other documents.

They pay employee-related payroll taxes, provide workers’ compensation insurance, general liability insurance, and unemployment benefits.

When using a staffing agency the employer also does not have costs associated with health care, 401k retirement plans, sick days, and vacation pay.

PRO: Insider market knowledge

When working with a staffing specialist an employer gains access to years of market knowledge, a good staffing firm will know what the going salary ranges are for a particular position, market history, passive candidates that are open to new opportunities, and active potential employees looking as well.

They will act as a resource and a partner to present your opportunity to candidates in the best light.

Final thoughts on the pros and cons of using a staffing agency

Though working with staffing agencies when hiring workers is not always a perfect solution, the benefits far outweigh the drawbacks.

Temporary employees can be a great enhancement to your workforce reducing the burden on your full-time workforce by making sure projects are completed on time and on budget.

Do you have hiring needs? Need top engineering or IT talent? Reach out to us today

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