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Summary: A temp agency sources and assigns employees to client companies for short periods of time.
Temp Agency
A temp agency is an organization that provides workers to companies on a temporary basis according to their needs. It is also known as a temporary employment agency or simply an employment agency.
Temp agencies normally work with clients both on a one-off basis and on a repeating basis, providing workers as needed. They recruit and retain large pools of staff who they can then match to the needs of their clients. Temp agencies send their staff to work for companies for single days, several days, or even indefinite periods. The clients that use their services normally require staff sporadically and, therefore, prefer to use temporary workers rather than hiring their own staff part- or full-time.
Which industries does a temp agency cover?
Temp agencies can provide workers for numerous industries. These include both unskilled workers and professionals in such industries as:
- Construction
Unskilled laborers or skilled tradespeople can be recruited temporarily. - Shipping and warehousing
Unskilled laborers may be needed for packing, loading, and cleaning jobs. Skilled logisticians may help with tracking and planning activities. - General office temping
Workers with office experience may be hired temporarily to perform administrative support tasks like taking calls, preparing documents, etc. - Education
Substitute teachers can be employed by temping agencies to fill teacher absences day by day or during leave periods. - IT
Many businesses need to install software or new systems and networks. They require only temporary help in these endeavors and, therefore, choose to hire temporary workers. - Accounting
Some companies might need extra accounting assistance for large projects such as mergers or audits and would choose to hire temps to assist them. - Healthcare
Nurses, technicians, and other skilled health workers may be needed on a temporary basis, particularly since post-pandemic needs have increased dramatically. - Retail
Retail companies may choose to hire temps to fulfill their staffing needs during peak and seasonal periods. - Hospitality
Restaurants, caterers, and hotels often use temps to fill positions on a seasonal basis or when they need to quickly take on a large number of staff for special events.
What is the difference between a temp agency and a staffing agency?
While the terms “temp agency” and “staffing agency” sound like they might be used interchangeably, these two business models are very different.
Temp agencies work on filling temporary roles for their client companies. They hire pools of staff and sort them according to their skills and abilities. They also actively reach out to clients to offer their services. When these clients ask for staff, the temp agencies send them workers that match the skills and requirements they need well and then bill the companies for their services. They pay the temporary workers a daily wage and keep the rest for their operational expenses and as profit.
Staffing agencies, on the other hand, are concerned with filling the long-term needs of their clients. They, too, recruit talent, but rather than sending them to work temporarily for their clients, they try to place their people in permanent or semi-permanent jobs. Leading staffing agencies may also provide temporary workers if their clients need them. However, they normally look to lease staff or place them directly with companies and receive one-time recruitment fees for their services. Staffing agencies essentially provide the recruitment functions for companies that wish to outsource rather than perform these functions in-house.
What are the benefits of a temp agency?
While it may seem like temporary positions aren’t as beneficial as permanent ones, this is not always the case. There are several reasons why workers might wish to take on temporary employment and why employers would choose to hire temps. These benefits include:
For employers
- Cost savings
In general, temporary workers cost less to hire than full- or part-time workers. Though temp agencies may actually bill more per hour, employers are normally not required to pay extra benefits to temps. They may also save time and money on training and orientation. Since the temp agency also handles human resources (HR) functions like payroll, costs are also lower for client companies. - Flexible hiring
Hiring full-time employees takes time and financial commitments. In most jurisdictions, it’s also difficult and costly to then dismiss workers when they’re no longer needed. Hiring temporary workers, however, allows companies to quickly staff up when they need more help, as in special events, busy seasons, or specific tasks. Once these are completed, they have no long-term commitments to their temporary workers. - Easy recruiting
Hiring temporary workers is one way that companies can try out staff to see how they fit into their organizations. While most temp agencies have agreements with clients that they can’t hire staff directly within a set period of time, some may allow clients to do this and pay them a recruitment fee. - Fast filling
Because most temp agencies keep large pools of workers on hand, they can find appropriate staff to fill positions immediately. This allows their clients to stay efficient and focus on creating value.
For workers
- Flexibility
Some workers have commitments that make them unable to take on full-time employment. Others may simply not want to work regularly. Temp agencies allow them to work on a daily basis when they need to earn money and have free time to do so. - Experience
It can be a struggle for workers to find employment in some competitive industries without first gaining work experience. Temp agencies use their connections with clients to provide work for temporary employees, who can then use this as experience on their resumes.
Costs of Working with a Temp Agency
When working with a temp agency, it’s essential to understand the various factors that influence the costs. Here’s a breakdown of the key points:
Factors affecting temp agency costs
- Type of position
- Duration of the assignment
- Agency’s markup
Markup rates
- Typically, staffing agencies charge a markup between 25% and 100% of the hired employee’s wages.
- Example: If the agreed markup is 50% and the employee’s hourly rate is $20, the bill rate would be $30 per hour
Flat fee for direct-hire placements
- Some agencies may charge a flat fee for their services
- The fee can range from 15% to 30% of the employee’s first-year base salary.
Importance of discussing pricing structure
- To ensure you understand all associated costs
- To budget accordingly
By understanding these factors and discussing the pricing structure with the temp agency beforehand, you can make informed decisions and effectively manage your staffing costs.
Engage an international temp agency
Some companies need staff in other countries for temporary tasks and seasonal work. International temp agency services like those provided by Remote People can help these companies fill positions fast. Because these agencies hold offices/entities in multiple countries around the world, they can work quickly and effectively to find the staff needed. They can also handle all the HR requirements to ensure that they comply with local laws and workers’ rights so temporary workers are hired and treated properly.
How to Choose the Right Temp Agency for Your Business
Selecting the right temp agency can significantly impact your business’s operational efficiency and workforce flexibility. When choosing a temp agency, consider factors such as their industry expertise, the quality of their talent pool, and their reputation for reliability and compliance with labor laws. Look for agencies that offer robust screening processes to ensure that the temporary workers they provide are skilled and dependable. Additionally, evaluate their customer service and support to ensure they can respond quickly to your staffing needs. By partnering with a reputable temp agency, you can ensure that your business remains agile and well-staffed, even during peak periods or special projects.
Andrew (Drew) joined the Remote People team in 2020 and is currently Director, Regulatory Affairs. For the past 13 years, he has been a trusted advisor to C-Suite executives and government ministers on international compliance and regulatory issues. Drew holds a law degree from the University of Otago, a PhD from the University of Sydney, and is an enrolled Barrister and Solicitor of the High Court of New Zealand.
