What Is a Temp Agency? Common Services and How They Work

A temp agency — also known as a temporary employment agency — is a recruiting firm that acts as an intermediary between job seekers and companies needing short-term employees. These workers are usually hired to fill in for simple, entry-level positions that don't require much training.

Temp agencies connect you with temporary employees whose engagement in your company could last anywhere from a single day to a few months. The agency has the candidate on its payroll and is the employer, which helps with legal and tax purposes since you're not bound to a contract with the employee.

This article discusses how temp agencies work and breaks down their pros and cons. You'll learn how a temp agency can assist you in finding short-term staff to help you during high-demand periods.

What does a temp agency do?

Temp employment agencies specialize in helping companies find short-term employees to fill their open positions. Their tasks include:

• Conducting interviews to shortlist candidates. Temp agencies conduct basic interviews with applicants (including confirmation of basic skills) before onboarding them. These candidates are then added to the agency's roster and assigned to different client companies based on demand. 
• Screening candidates. The temp agency conducts the necessary tests required as part of their own onboarding and training processes. 
• Understanding your requirements. The agency will ask you a series of questions to understand what's expected of the worker. This helps them find a qualified candidate.
• Finding a suitable match. The agency has a network of candidates and will pull the person who best meets your requirements. They do this by conducting a short interview to verify that the candidate's skills and abilities match the job description.
• Analyzing employee performance. The temp agency analyzes employee performance to ensure they're a good match for the role and align with your needs.
• Training employees. The temp agency trains its candidates between roles, helping them grow and upskill to perform better at their delegated temp jobs.

Examples of the tests temp agencies conduct include:

• Background checks. Employee background checks include checking criminal history, credit history, medical history, and educational qualifications of the potential candidate.
• Employment history. These are verification checks carried out by the employer (the agency) to ensure the information mentioned in the candidate's resume is accurate.
• Drug tests. Drug testing laws vary by state, but in general, hiring an employee is often subject to them passing the drug tests conducted by the temp agency.
• Health tests. These tests are done to determine the employee's physical well-being.

Temp agencies take care of most of the hiring process, saving you time and allowing you to focus on other aspects of your business without resorting to outsourcing core functions.

How will this process look for you?

The process of working with a temp agency is usually like this:

1. Defining role requirements. Be clear about the skill sets required for the role, how long you'll need the employee for, and the wage.
2. Contacting an agency. Contact a local temp agency and let them know your requirements. You'll want to carefully vet agencies to make sure they meet procedural and regulatory standards. This might include adherence to drug testing standards, existing clients, and pricing models.  
3. Following up. Many hiring managers underestimate the importance of following up with both the temp worker and the agency. But these followups create an efficient feedback loop between your organization and the temp agency.

Are temp agencies the same as staffing companies?

No, temp agencies are not the same as staffing agencies, but their roles overlap. For a fee, they both match candidates looking for work with companies looking for workers. But understanding their differences can help you choose the one better suited to your employment needs.

Temp agencies help you fill short-term roles that are usually entry-level or low-skilled. Because the work needed requires little training, they can meet urgent staffing needs. 

Staffing firms, on the other hand, help companies find workers for all kinds of roles. This includes temporary positions, but also:

• Temp-to-hire roles. The candidate is hired if they're deemed a good fit for the company after a 90-day trial period.
• Contract roles. These are specialized roles that last for up to a year.‍
• Direct hire roles. The candidate is given a permanent job if their skills match the requirements of the role.

Unlike the temp hiring process, the staffing agencies work to find ideal candidates to fill open roles. The process of engaging a staffing agency may also take longer.

Some other differences between temp agencies and staffing agencies are highlighted in the following table.

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What are the pros and cons of working with temp agencies?

Temp agencies serve a needed temporary staffing role at a price. Before you hire one, weigh their pros and cons.

Pros include:

• Easy adaptation to workload changes. You can scale your workforce quickly without overloading existing employees.
• Fast access to workers. Temp employees can start almost immediately, helping you cover urgent staffing gaps.
• Low-commitment hiring. You can assess a worker's fit on a short-term basis without making a long-term commitment.
• Role coverage during turnover. Temps can fill positions temporarily when an employee leaves unexpectedly.
• Broad candidate access. Agencies can source workers for a variety of job openings across skill levels.

Cons include:

• Frequent training demands. Bringing in new temps often requires repeated onboarding, which can slow productivity.
• Lower engagement levels. Temporary workers may not feel as connected as full-time staff, creating workflow friction.
• Safety and process risks. Temps may be unfamiliar with your safety procedures, which can increase the risk of accidents.
• Legal gray areas. Issues involving wage laws, FMLA, and benefits can still affect your business even though the agency is the official employer.

Alternative staffing solutions

If neither temporary nor staffing agencies seem like the right fit for your company, you might consider some of these alternate staffing solutions:

• Hire freelancers. If you're looking for certain expertise, faster deliverables, or just want access to a global talent pool, hiring a freelancer like those on Upwork can be a good option.
• Use social media and job boards. On social media platforms and job sites, you can see the profiles of the candidates and, in many cases, some of their past work. Plus, platforms like LinkedIn are dedicated to working professionals, allowing you to go beyond what your individual network may bring you.
• Seek referrals. This involves asking your clients, full-time employees, and network for referrals. They may know someone looking for a new job and can refer them to you. Asking for referrals doesn't involve any expense, and it's often a fast way to close a position.

These are just some commonly used methods to find suitable workers for your business, but there are plenty of other creative ways to find talent without hiring an agency.

Need temporary work or help filling skills gaps?

Temp agencies are for hiring workers on a short-term, part-time, or per-project basis. This allows you to get some extra help during periods of heavy workload without going through a tedious staffing process. Whether you need help with temp staffing or finding long-term employees, these agencies can assist with various sourcing needs.

If you're looking for a specific skill set, consider working with top-rated independent contractors on Upwork. Get started today!