All You Should Know About Temp Agencies

Temp agencies, often known as “temp services” or “staffing agencies,” are businesses that hire workers on a temporary, seasonal, part-time, or temp-to-hire basis.

All You Should Know About Temp Agencies

Some temp agencies are general entities that cover the hiring and placement of several workers, while others focus on niche industries.

These boutique agencies find temporary candidates of more specialized skill sets.

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Being the intermediary that connects candidates and companies, temp agencies are similar to employment agencies.

During busy periods, companies usually hire temporary workers to work on a project-by-project basis.

Similarly, candidates who are looking for work for a specific period of time use the services of temp agencies.

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Although there is no assurance that a temporary position will be converted to a permanent position.

Sometimes, if all sides agree and there is enough work to justify hiring that temporary employee permanently, an employer may convert a temporary job to a permanent position.

How Does a Temp Agency Work?

The primary difference between temp agencies and regular HR departments is that temp agencies manage the temporary worker’s hiring, firing, and onboarding.

However, this means that the contracting company, called the temp agency’s client, has no involvement in the temporary worker’s compensation or benefits.

The client just agrees with the temp agency on the number of temporary workers that will be placed.

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For each worker provided, the client pays a percentage or an hourly fee.

It is the job of the temp agency to negotiate the workers’ schedules, payment, and all other important employment details.

If there is ever a problem with a client, the worker will report it to the temp agency.

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If someone dissatisfied a client with a temp’s performance, they must agree with the temp agency, as they can not fire the worker directly.

Whether full-time, part-time, or seasonal, all temps are employees of the temp agency.

It is the agency that provides these employees with benefits, tax status, and more.


Roles of a Temp Agency

A temp agency can play a lot of roles, but essentially the process works like this:

1. The agency screens the workers, screening out unsuitable candidates and evaluating the skillsets of those hired.

2. The agency has a pool of workers that come to the agency looking for jobs.

3. Temp agency draws workers with the required skills from its pool of workers and sends them to the new temporary employer.

4. An employer in need of temporary workers signs a contract with the temp agency.

The contract specifies the employees the company seeks, as well as the cost paid per hour of work and other information.

5. The Staffing agency pays the workers an hourly wage.

6. The employer pays the temp agency based on the hourly wages of all the workers provided, plus an additional amount to cover the agency’s services.

Benefits of Temp Agency

While temp agencies aren’t as cutting-edge as today’s on-demand hiring platforms, they offer several advantages to both clients and workers.

Importance of Team Agencies to Companies

Let’s look at how the classic temp agency structure benefits the company’s clients:

1. The agency takes the pressure off the company’s internal HR department

2. Temp agency handles hiring, firing, drug testing, background checks, screening, and even skills training

3. If the agency is a large, full-service one, it will deliver last-minute skilled temps

4. Most staffing or temp agencies offer recruitment services at a fraction of the cost of traditional recruiters

5. Temp-to-hire buyout options make for cheaper onboarding processes

Importance of Team Agencies to Employees

Here’s what temp agencies do for their employees:

1. Offer full-time, part-time, or seasonal scheduling options

2. Very flexible scheduling options

3. Provide short-term jobs that match employee skill sets

4. All placements are completely free for the employee

5. Provide free skills training in the industries they serve

6. Opportunities for temp-to-hire employment

Demerit of Temp Agency

Hiring or joining a temp agency, like most things, has significant drawbacks, the most obvious of which is the issue of markups.

Markups are the costs that are added to each employee’s hourly compensation.

Although markups differ from agreement to agreement, it’s not uncommon for them to exceed 100% of the worker’s hourly wage.

According to HCM Works, some temp agencies have a bad habit of hiding additional fees or misleading their clients into agreeing to extra charges on top of the markup.


Considering this, it is advised that contracting clients ask questions about additional fees prior to signing the agreement.

Companies should also ask for discounts for bulk hires, (when a sizable number of workers are requested).

Unfortunately, temp agency employees, or temps, are often forced to face a set of notable drawbacks, as well.

For one, it’s unusual for temps to have any level of autonomy in their roles.

Often, these placements are entry-level positions that require few qualifications.

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It’s a “plus” in the sense that the agencies can easily fill the roles, but it also means that there are hundreds, or sometimes even thousands, of other workers willing to do the job.

This scenario can make temps feel expendable and undervalued.

Besides the lack of autonomy, they rarely provide most temps full-time work.

Though this might be a decided advantage for some, this also usually means no benefits, like health insurance, stock options, retirement funds, etc.

As seen, temp agencies play a role in our economy. That said, the jury’s still out whether or not these firms can stay relevant as the ultra-modern gig economy continues to expand and strengthen.

1. Temp Agencies Charge Employers, not Employees

The first thing you should know about working for a temp agency is that being a part of their talent pool should not cost you anything.

This is because you are the product, not the customer, and you are selling your services to companies seeking people like you. Temp agencies operate solely to link you with the appropriate clients.

Companies turn to staff agencies when they do not want to devote resources to the hiring process.

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They may not have time to advertise job openings on employment boards, look through dozens of resumes, and conduct interviews.

This is especially true if the company requires part-time or temporary employees.

While personnel is needed for a short-term project, such as when an employee is on maternity leave or during high season, hiring through an agency saves time.

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The company pays a fee to the temp agency to provide a pre-approved employee to satisfy their talent needs in order to save time.

They then pay the agency for the work rather than the employee.

If your agency provides any benefits in addition to your compensation, they will be provided by them rather than your employer.

Mostly, this implies that the salary and benefits for most temp workers are identical.

2. You are Employed by the Temp Agency

The temp agency still hires you even though you are put within a company and show up to work every day.

Although the agency’s contracting company may have papers logging your time there, they are not liable for your salary, benefits, or other concerns.

The temp agency has a mechanism in place to ensure that they pay their employees on time.

This is fantastic news for people who work for a temp agency regularly. If you’ve previously set up your details, you’ll be able to keep getting paid regardless of where you work.

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You may bring certain HR issues to your place of employment, but you can also bring your difficulties to the agency.

They’ll talk to the company about the problem and take the action to resolve any complaints.

The good news is that the contracting firm can still be listed on your CV.

You can utilize the company’s brand and employer recommendations to help you get a full-time job in the future by talking about the skills you learned there.

3. They do not Offer Guaranteed Employment

Most people believe that if they sign up with a temp agency, they will be contacted and placed right away. This isn’t always the case, though.

You’ll almost certainly go through an interview and vetting procedure to determine your qualifications and then meet with a recruiter to discuss your objectives.

The recruiter will do everything possible to place you in an appropriate position.

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It is in the best interests of the temp agency to send top applicants to its clients.

If they dissatisfied a company with the applicants sent by an agency, they may discontinue employing temps through that agency.

The success of the agency’s personnel determines its professional reputation.

4. You will Work with Professional Hiring Managers

Experts that work for temp firms specialize in finding people to hire. They spend their days assessing candidates and learning to spot red flags and matches.

These individuals also keep track of their placements’ success and improve their ability to spot good hires over time. This implies that you must be well-prepared for each interview.

Make sure you arrive at your interview with a resume on hand or send a resume ahead if you have a call or video interview planned.

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Even if they already have your resume, this shows that you are invested and prepared to provide whatever they may need.

During the interview process, make sure you highlight your skills and strengths.

Your recruiter might want to place you in a specific role because of this skill set or have more roles open to you because of what you can do.

Be open and honest about what you can do and the contributions you can offer.

5. Put in your Effort

Not only do you want to put your best foot forward to impress the recruiter and stand out so you get placed, but you also want to do your best for the company you work for.

Your assigned employer will likely submit employee reviews of your performance and the performance of other temps.

They will compare your work to other hires. By doing your best, you can earn a positive review and a potential recommendation in the future.

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A good work ethic can help you grow your relationship with the temp agency.

For example, if you do an outstanding job with a six-week seasonal position, your name will move to the top of the list the next time that the agency has space to fill.

Some people work closely with their recruiters for years because the recruiter knows that they can trust the worker and the worker knows there will always be work for them.

6. Some Companies Specialize in “Temp to Hire”

While some people enjoy the flexibility and dynamic nature of temp work, other people want something more stable, and only work with the temp agency to cover their immediate expenses.

If this is the case, talk to your agent about any potential “temp-to-hire” positions.

These are positions where the company wants to test out potential employees and see if they are a good fit before taking them on full-time.

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“Temp-to-hire” positions are ideal for companies that are considering expanding their workforce but are not sure if they can afford it or if the extra work will benefit the company.

As a temp in this situation, it is your job to prove your value to the company. Show them you are an essential staff member who they cannot afford to lose.

If a company hires you, then your contract with the temp agency will end. You will get paid by your new employer and receive benefits through them.


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