What Is a Staffing Agency? Meaning and How They Work

When used correctly, staffing agencies can be a much-needed human resources lifeline. They help companies find the right candidates quickly for even the most key positions, taking care of most of the administrative work and screening processes.

Simply put, a staffing agency can help streamline your hiring process by making it quicker and more efficient. But how do staffing agencies operate, and how can they fill your open positions? If you’re considering consulting a staffing agency, here’s everything you should know.

Definition of a staffing agency

A staffing agency acts as an intermediary between job seekers and companies looking for new workers. These agencies, also known as recruitment agencies or staffing firms, have systems in place to match skill sets and experiences with the requirements of the jobs available. This creates a suitable match between the open job positions and qualified candidates.

Often, people confuse staffing with recruiting, but they’re two different things.

Staffing agencies are involved from the time workers are recruited to the time they leave. The recruitment process is a part of staffing, but staffing also includes employee orientation, training, retention, and termination. Employment agencies refer only to the initial steps of hiring a candidate.

How staffing agencies work

As you probably know, the hiring process is time-consuming. Depending on your industry, you could spend an average of 36 days to hire a new worker.

Working with a staffing agency to find the most qualified candidates for your company can be a smart business move. It frees up your time and human resources.

If you’re considering using a staffing agency, the process usually looks like this:

1. Define your hiring needs. For example, is hiring a full-time staffing agency practical for your business, or is an on-demand staffing platform more suited for you? Consider whether you need temporary workers, temp-to-hire positions, or direct hire solutions.
2. Vet the agency you choose. Once you select a staffing agency or platform, look through its reviews to ensure it’s a reliable firm and a good fit for your needs. Check if they specialize in your industry, such as healthcare, and if they understand your company culture. You’ll also want to interview, at a minimum, the person you’ll be working with. Then, possibly visit the location or have at least a video call to get a feel for the staffing agency.
3. Contact the agency. Provide details about how many candidates you need, what skills you’re looking for, and what pay range you’re offering. Discuss your timeline for hiring the new candidates. Clarify your hiring needs, including whether you're looking for temporary workers or long-term employees. Be prepared with a detailed account of what you need and express this clearly to help the agency find the best match.
4. Review the job description. The agency will write a job description based on your requirements and advertise it to potential candidates. They may use job boards and their talent pool to find suitable candidates. Ensure that the agency understands your needs and that the job description is accurate.
5. Wait. Once candidates begin applying for the job, the staffing agency will review their qualifications and experiences and conduct one or more interviews to filter out the most suitable candidates for your business.
6. Make the final decision. The agency will send you a list of the candidates they found suitable, and you can choose to interview them again before hiring. Consider how each candidate fits with your company culture and team dynamics.
7. Oversee the onboarding process. Once you’ve decided on the candidates to hire, the agency takes care of all the required paperwork for employee onboarding. They can help your new hires integrate smoothly into your team.

Why do companies use staffing agencies?

Companies hire through staffing agency for several reasons, including:

• Better budgeting controls. One of the primary reasons companies turn to staffing agencies is to hire additional workers who can help with an increased workload. Staffing agencies help you hire quickly in these scenarios, saving you the money you’d otherwise have to pay existing staff to work overtime. These agencies also help you save on screening and testing costs (incurred while conducting background checks, drug tests, etc) by taking care of the entire process themselves.
• Extensive network. Staffing agencies often have an extensive network of available candidates looking for a job, so the scouting process can be much more efficient than if your company itself advertised the job vacancy.
• Access to expertise. Staffing agencies have experience in scouting top talent. So outsourcing the process might give you better results.
• Time. Staffing companies take care of the entire recruitment process from screening to training and onboarding of new employees. This allows your management team to save time and invest it in other important activities.

However, if you don’t think hiring a staffing agency is  the right choice for your company, there are alternate ways to hire, such as posting a job on a remote talent platform like Upwork.

Are staffing agencies the same as temp agencies?

Both staffing and temp agencies help people find employment, so the terms are often confused. While some services these agencies provide overlap, they play very different roles in providing employment opportunities.

As the name suggests, temp agencies provide temporary, short-term, or project-based work opportunities. These agencies are mainly used by companies that need extra help on specific projects or only on occasion. For example, warehouses or restaurants looking for short-term staff during holiday seasons might work with a temp agency.

While staffing agencies offer similar temporary work opportunities, they also provide many job options for people wanting long-term employment. For example, a staffing agency can fill:

• Temporary jobs that might be needed during holiday seasons
• Contract-to-hire jobs that have a trial period after which the employee might be hired for a full-time position if they fit the role
• Contractual jobs that are relatively long term and involve specialized roles that last for up to a year
• Permanent jobs where the employee is directly hired for the role if their qualifications and skills meet the company’s expectations

How to choose a staffing agency

If you decide to use a staffing agency, then choosing one that is reliable and reputable is essential. Keep these simple tips in mind:

1. Have clarity. Make sure you have a clear vision of the kind of workers you’re looking for. Be specific about the type of person you want for the job and communicate it to the staffing agency. Clearly defining your needs can help the agency fine tune its selection process.‍
2. Determine your staffing needs. Do you need full-time or part-time employees? Or would more flexible, on-demand staffing be more cost effective and efficient? ‍
3. Identify agencies that fit your budget.  Staffing agencies typically charge a net bill rate for their services. This includes the pay rate—the money they’ll pay the employee—and a markup—a surcharge that includes all employee benefits, taxes, plus a finder’s fee. Make sure you consider all these factors while picking an agency that fits your budget.‍
4. Look over the legal aspects for the role you’re filling. Look over the contracts and paperwork to protect both parties in case of any conflict. Based on the role, determine your company’s legal requirements. Communicate these needs to the staffing agency while they draft your paperwork.‍
5. Make sure you retain enough control over your hiring process. By the nature of their business, staffing agencies take some control of the staffing process away from your company. The people hired through a staffing agency are considered employees of the agency, and work to meet that contract. You’ll want to make sure the contract reflects the work you need done, the time that employees are expected to work, the functions they need to fill, etc.

Choosing the best staffing agency for you can be a process of trial and error. So be patient with new agencies as they send candidates your way.

What are other ways to supplement your workforce?

Staffing agencies serve a need, and can be great at that role. But they charge between 25% and 100% of the worker’s pay, which can be difficult for some companies to justify. Other companies may be uncomfortable giving that much control over the hiring process to a third party, especially for key roles.

In such cases, you can look for the right worker for your company in several other ways, including:

• Search within your professional network. Another good way to hire trusted individuals is to search within your network—including workers at other companies. You may even already know what the candidate can bring to the table.
• Look for talent on social media. Seeking employees on social media is a great way to reach out to a large number of relevant candidates at one time. For example, if you decide to hire on LinkedIn, you can message several candidates simultaneously.‍
• Hire a recruiter. If you have your staffing process streamlined and only need help to find suitable candidates, consider hiring a recruiter on Upwork. Freelance recruiters on Upwork can help you find qualified candidates based on your job openings. They can also interview them.

Find the right talent with the help of Upwork

Whether you need employees to fill a temporary or more permanent position, a staffing agency can help you find qualified job candidates. However, if you need help with more specialized projects, need a more economical solution, or want more control over the hiring process, Upwork can be a great option.

As a remote talent platform, Upwork can connect your business to freelance professionals from all over the world with the expertise and skill sets you need to get your jobs done quickly and efficiently. Tap into a global talent pool and discover new job opportunities for your projects. Get safe and secure hiring for any sized project with Upwork.