There are pros and cons to using a staffing agency and it is important to weigh them when hiring employees for your business.
As recruiters, we obviously feel there is a sound advantage to using a staffing company but we list some of the pros and cons when using a staffing agency to help you make a more informed decision.
A list of some of the common pros and cons of staffing agencies.
PRO: Staffing agencies reduce business liability
The temporary worker performs duties as an employee under the business’s direction.
A staffing agency covers workers’ compensation insurance, general liability insurance, takes out payroll taxes, pays the worker, and covers other costs associated with employment.
Using a staffing agency gives an employer the ability to try out an employee before making a long term commitment observing their work habits, skillset, and interaction with full-time employees lowering hiring risks.
If a contract employee becomes sick and contracts COVID-19 the staffing agency (depending on size) is responsible for paying the employee under Families First Coronavirus Response Act (FFCRA or Act)
This act requires certain employers (depending on size) to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.
CON: Training contractors can take time
Having a contract temp worker come on board usually means the learning curve is shortened as work must be completed quickly and efficiently.
You may not have time to train them as thoroughly as you would a direct-hire full-time employee so the typical learning curve time requires adjustment.
PRO: Staffing agencies reduce time to hire
As an employer, you do not have to sift through hundreds of unqualified applicants or waste time talking with uninterested candidates.
A good staffing agency saves you time and costs associated with finding qualified candidates and reduces the time to fill cycle.
They check references, screen candidates for the right qualifications, shortlist potential hires, and complete background checks during the offer stage.
CON: Potential team bonding and culture issues
A temporary worker may not mesh well with long term employees.
Full-time employees and contract workers may have a short term view of each other resulting in reduced team bonding and interpersonal interaction.
PRO: Staffing agencies have deep talent networks
The best staffing agencies have spent years building a database of quality candidates to aid in filling jobs with the best talent possible.
Posting a position on a job board and hoping for great candidates to apply is hit or miss. This method can take weeks if not months to find a great candidate if you are even able to find the right candidate at all.
A staffing agency reduces an employer’s time to hire job cycle to days, instead of weeks and months by leveraging their large talent networks to save them time and money.
CON: Some control of the hiring process is lost
You are outsourcing part of the hiring process, the staffing agency doesn’t know your culture as well as you do and if you use the wrong staffing firm they may not present the opportunity as well you could.
PRO: Staffing agencies save employers money
Using a staffing agency eliminates upfront costs used to market, find and attract talent, they also reduce employer’s overhead by eliminating benefits costs, improve an employer’s cash flow, and reduce overtime costs associated with the company’s permanent staff.
CON: Poor recruitment processes
Not all staffing agencies spend time and resources to develop and nurture deep candidate networks.
Because of this companies may receive resumes that are subpar and not up to the standards the employer requires.
By working with a recruitment agency that specializes in the types of positions the company is looking to fill an employer can avoid issues like these.
If you need an IT position filled make sure you reach out to top IT staffing agencies instead of a general agency that usually places warehouse personnel.
PRO: Staffing agencies offer Flexibility
During times of economic uncertainty and general slow periods, staffing agencies offer employers the flexibility of bringing on skilled contractor workers to complete short term projects and assignments.
An employer as the ability to hire a contractor to complete the work and then when the assignment is completed they can let the contractor go with no issues.
This creates a win-win situation as the contractor is able to make money being employed and the employer reduces there long term costs.
PRO: Save time on onboarding and payroll costs
The staffing firm takes care of the contract employees onboarding paperwork such as W4, I-9, and other documents.
They pay employee-related payroll taxes, provide workers’ compensation insurance, general liability insurance, and unemployment benefits.
When using a staffing agency the employer also does not have costs associated with health care, 401k retirement plans, sick days, and vacation pay.
PRO: Insider market knowledge
When working with a staffing specialist an employer gains access to years of market knowledge, a good staffing firm will know what the going salary ranges are for a particular position, market history, passive candidates that are open to new opportunities, and active candidates looking as well.
They will act as a resource and a partner to present your opportunity to candidates in the best light.
Final thoughts on the pros and cons of using a staffing agency
Though working with staffing agencies is not perfect, the benefits far outweigh the drawbacks.
Temporary employees can be a great enhancement to your workforce reducing the burden on your full-time workforce by making sure projects are completed on time and on budget.
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