temporary agency, staffing agency, temporary employees, hiring, small business owner, staffing costs, temporary workers
Small Business

Managing Your Business

What small business owners need to know about temporary staffing agencies

Two key employees quit, and you've got no one to process orders for the next week. You've got a pile of resumes on your desk, and no room in your schedule to book interviews. Or just as the rush of holiday orders and requests comes in, your inbox start filling up with your employees' requests for end-of-year vacation days.

Choose what’s right for your business, links to business banking landing page

Just about every business owner feels the occasional staffing pinch, but when you own a smaller shop, it's often more acute. You don't want to over-stress your dedicated workers, nor refuse them the vacation time they have due—but you can't leave your business needs unattended, either.

One way to bridge the gap is to hire temporary staff. For some small business owners, finding extra pairs of hands may be as simple as putting out word to family and friends. Alternately, if you need to make a quick hire, the idea of picking up the phone and arranging for workers to show up at your door in a jiffy may sound appealing. But hiring in a hurry can leave you with mixed results: while you might get the qualified workers you need, you could also find yourself paying a premium for not-so-great help.

If you need to get experienced professionals in the door quickly, you might benefit from working with an agency that specializes in finding the type of people you need. In 2018, some 3.4 million temporary and contract staffing jobs were filled by staffing agencies in the fourth quarter alone, according to the American Staffing Association.

Another advantage: Many agencies offer benefits to longer-term temporary workers. According to a recent Staffing Industry Analysts' survey, 70 percent of staffing firms offer temps some kind of subsidized healthcare, and about half offer paid holidays and other paid time off.

Here's what you need to know to choose the right staffing agency, and get the most out of the arrangement.

Personal contact is key

There are hundreds of staffing firms in the U.S., ranging from one-person shops to international firms that place thousands of workers every day. While a large firm may be able to more easily handle bulk staffing needs, if the work is specialized—say, graphic design or accounting—look for a firm that recruits for those professionals specifically.

Regardless of how large or small the agency is, you should be able to work with a single contact consistently. That person should be willing to come for a face-to-face meeting, to see the office space and get a feel for your company's culture. A personal meeting will also help you get a sense of whether you trust the staffing firm as a partner.

And keep in mind that speed isn't everything. While it's critical that a staffing firm be responsive, someone who just wants to make a sale by getting a warm body in your door isn't likely to be looking out for your best interests as an employer.

Rates are negotiable

In the staffing world, rates are generally determined by "mark-up"—meaning the premium that the agency charges on top of the rate they are paying a worker. Mark-ups are typically a minimum of 30 percent to 50 percent; so if the worker is making $20 per hour and the markup is 50 percent, the agency will charge you $30. If the job requires a specific skill that's hard to find, the markup could be much higher.

However, since the world of staffing is so competitive, mark-ups are almost always negotiable. Particularly if you're hiring a bunch of workers at once, or there's the possibility of a lot of future work, an agency may be willing to offer you a deal.

Even if you're confident that you only need short-term help, it's important to also negotiate the so-called conversion or buyout fee, in case you wind up opting to hire the person full-time.

There's work on your end, too

It's understandable if you don't want invest much time training a temporary worker. But giving some thought to the specific tasks and requirements of the job before you reach out to a recruiter can go a long way towards helping them find an employee who can get the job done with a minimum of hand-holding.

If you need to find the person urgently, divide the list of requirements into must-have and nice-to-have. That will give the agency enough flexibility—while still making sure you have your bases covered.

The Pros and Cons of Hiring From Staffing Agencies

Agencies can help—but they're not the only way to hire. Here's a rundown of the benefits and drawbacks.

Staffing Agencies: Pros and Cons

Screen Reader Users: To load more articles, scroll down the page, or click the list of articles.