You may already know that staffing agencies act as the middleman connecting employers to job seekers. For employers, they can be an extremely effective and cost-effective way to find the best candidate for your position. For job seekers, they can be a relatively easy and fast way to find a job.
If you’re new to the staffing agency world, though, you may be wondering: How do these people make money? We explain how staffing agencies work and whether they’re more cost-effective than other options below.
ARE STAFFING AGENbenefits of temporary staffing CIES FREE?
Yes, staffing agencies are typically free for job seekers. Employers—not candidates—pay staffing agencies to source, screen, and place qualified talent in temporary, temp-to-hire, or permanent roles.
Staffing agencies make money by charging companies a fee based on the employee’s wages. For temporary staffing, this is usually an hourly markup added to the worker’s pay rate. In most cases, employer fees range from 25% to 100% of the employee’s hourly wage, depending on the role, industry, and level of expertise required.
For example, if a worker earns $15 per hour and the staffing agency applies a 30% markup, the employer pays $19.50 per hour. The agency retains $4.50 per hour as their service fee, which covers recruiting, payroll processing, benefits, and administrative support.
This model allows job seekers to access opportunities at no cost, while employers benefit from faster hiring and reduced administrative burden.
IS DIRECT HIRING CHEAPER THAN USING A STAFFING AGENCY?
Hiring a staffing agency isn’t free for employers, but it often ends up being more cost-effective than direct hiring after taking hidden costs into consideration. Staffing agencies also tend to provide employers with better results and more qualified job candidates than they would get on their own.
Although staffing agencies usually charge employers a markup, direct hiring can prove to be costly in other ways. If your team can’t dedicate enough time to hiring while they’re understaffed and the process stretches out, there will be substantial productivity losses. Direct hiring without a temporary trial period can also have a long-term negative impact on your business if the person hired isn’t as good at their job as expected. Firing an unproductive direct hire could lead to expensive litigation, higher turnover costs, and even more time spent on hiring their replacement.
Using a staffing agency to find qualified candidates for your company pays off in a number of ways. An agency can save you time and money by doing all the hard research it takes to find the perfect employee with the right qualifications. They can also dedicate more time to hiring quickly than anyone at your (currently understaffed!) organization probably can, speeding up the hiring process immensely. As a result, you are far more likely to get a stellar new employee who can help with your business right when you need them.
Staffing agencies will also often handle much of the time-consuming paperwork that comes with a new hire, such as payroll tasks, taxes, and contracts.
WORK WITH AN EFFICIENT STAFFING AGENCY
An efficient staffing agency should give you the freedom to focus on the things that are the most important when running your business. Hiring a successful staffing agency with proven results for both employers and employees can save your company time, stress, and money.
LG Resources is a staffing agency that focuses on finding high-quality and experienced candidates for a wide variety of businesses. After successfully helping thousands of clients, we have proven ourselves to be a worthy asset for your staffing needs.
One of our primary focuses is conducting comprehensive screening processes with all potential hires. These efforts ensure our clients are presented with only the best temporary and permanent employees based on their experience, ability, and expertise.
In addition to connecting employers to candidates, LG offers our clients the option to join our healthcare savings program as well as our free payroll service. We also provide comprehensive workplace evaluations to help eliminate workplace hazards.
REQUEST AN EMPLOYEE FROM LG RESOURCES TODAY!
Request an employee from LG Resources today by filling out our employee request form to get in touch with a hiring professional. You can also post your job listing free of charge on our job board by simply completing our job form, which gives you partial access to LG’s massive outreach.
