Today’s Employers Use Different Types of Staffing Agencies to Help Them Solve Their Staffing Challenges!

The GOOD NEWS is that the “staffing industry” is made up of a large and diverse group of agencies providing a wide range of staffing solutions.  

The BAD NEWS is that it’s not always easy to select the right type of staffing agency for your needs.

The lines between direct hire and temporary staffing agencies and the services they offer have blurred.  

The last 20 years has seen the staffing industry not only grow at a record setting clip, but there have been many changes blurring the lines between the different types of agencies and the services they offer.   What once was an easy choice between selecting an agency to do direct hire recruiting, nd an agency doing temporary staffing, is no longer easy.  The ‘temp to hire” staffing model for example, where an employee works for a staffing agency who refers them to a client company for a temporary assignment as a way to audition for a direct role,  has put many traditional temporary staffing companies in the middle of an organization’s direct hire recruiting strategies.

And the temp-to-hire recruiting solution is but one of many “blended” staffing/recruiting services that have driven significant growth in “staffing”.   Recruiting and temporary staffing solutions alone are a 150 billion dollar industry, but are only two of a multi-segmented staffing industry.  Northwest employers can purchase comprehensive managed services (MSP services), professional employer services (PEO), payroll services, employer of record services (EOR), and  outsourced recruiting services (ROI) – all covered under the “staffing industry” umbrella.

Today’s staffing agencies come in a variety of shapes and sizes!  

Some are very specialized – focused on only one or two defined service solutions – and some often a full menu of very different types of staffing services.  Some temporary staffing agencies, for example,  only offer traditional temporary staffing, even going as far as to make it difficult or unexpectedly costly for their clients to hire their temporary employees directly.  Some search firms will only provide direct hire recruiting services and would never offer up one of their “candidates” for an interim assignment.  Others, like PACE Staffing Network, offer their clients a full range of hiring solutions, in our case, using an external network of agency partners to deliver whatever type of hiring solution our clients need.

Here’s a quick look at the different types of staffing agencies that make up the Northwest staffing landscape….

Temporary Staffing Agencies…

…tend to focus on temporary staffing services where they act as the employer and recruit, screen and eventually assign one of their own employees to work for one of their clients on a time limited basis.

A “temp agency” may or may not provide temp-to-hire services and some who claim they do, in reality are not resourced to do it well.  If you are looking for a temp-to-hire staffing partner, make sure you are working with a staffing agency willing to invest the time and assessment resources needed to find candidates who can be hired directly and will make it easy for you to hire one of their employees direct when the time is right.

Contract Staffing Companies…

…are an iteration of temporary staffing agencies but are focused on upper level technical or professional employees who work in longer term but nonetheless interim roles.

While some temporary staffing agencies call their employees “contractors”  as a way to set themselves apart from more traditional temporary staffing agencies, in reality the difference between an agency providing temporary employees and an agency providing  “contractors”  has all but disappeared.

Historically, a temporary employee was  someone who worked  on very short term ad hoc assignments – intended to last from 1 or 2 days up to several weeks and with minimal guarantees or benefits.   A contract employee, on the other hand, was an employee who worked on longer term assignments with some “guarantee” as to their rate of pay, length of their assignment, and benefit eligibility.

In today’s world, length of assignment or “job security” are no longer differentiating factors.  Contractors and temporary employees are eligible for benefit programs provided by their staffing agencies.  Both temps and contractors can be “on assignment” for very long periods of time.

One of the reasons employers use staffing agencies is not just for their recruiting power but because they mitigate the costs and risks of the employer role.  Due to recent crackdowns on the 1099 classification by the IRS,  many high level contract employees, originally sourced by an employer,  are often referred back to a temporary staffing agency for hire and dispatch.  This service offering, typically called “employer of record”, places temporary staffing companies in the middle of what has been the playing field of contract staffing companies.

Search Firms…

…typically provide recruiting services differentiated from others by offering sourcing activities focused on currently employed candidates.

Search firms typically provide search services for professional and middle management roles.  Executive search firms provide search services for the C Suite.  Most search firms are organized into “specialties” based on the type of employee they recruit on a regular basis.

Contingent Search firms provide their services on a contingent basis where their fees are earned “only if” a candidate they placed is hired.  Retained search firms perform services for defined fees that are earned without the requirement that any candidate they refer be hired.

Today’s search firms are typically a combination of retainer and contingent – asking for an up front retainer fee to begin the search, while leaving a portion of their fees dependent on their candidate being hired.

Staffing Agencies …

…is a term often used by companies, like PACE, who provide a wide range of hiring solutions  with a focus on finding and referring employees for their client’s full staffing needs – temporary and direct hire roles.

This group of companies has become one of the largest segments of the “staffing industry” because they deliver many different types of hiring solutions.  These are the companies who get to know their clients well – because they work with a variety of hiring managers on a variety of staffing challenges.   Their solutions are typically cost competitive because their relationship with a company goes beyond one or two transactions per year.

Employment Agencies…

….are historically firms who charge a candidate a fee for helping them find a job.  There are very few employment agencies in today’s marketplace.  Most staffing agency fees are paid by the employer.

Professional Employer Organizations(PEOs)…

…are companies who provide outsourced employer of record services, taking care of all the administrative components of the employer role – payroll, benefits, compliance and in some cases the HR components of the employee/employer relationship which includes recruiting.

Most PEO’s will be the employer of record for an employer’s entire workforce.   Some PEO’s, will provide ad hoc employer of record services for only a segment of a client’s workforce.   The PEO segment of the staffing industry is one of its largest segments in the marketplace and provides Employer of Record services for about 15% of all  employees working for  companies with less than 100 employees.

Partnering with the right agency cuts time and money from your business operations.

Regardless of what type of agency you look for, selecting an agency who has the expertise and willingness to be your staffing partner can have a big impact on your business- particularly now when companies are looking for new ways to be competitive – to move more quickly, to get more done with fewer fixed costs. Look for an agency who offers the range of services you are likely to need, but also an agency who is willing to invest in your business success – to help you BUILD BACK BETTER!       

For more specific guidelines on what to look for when selecting your staffing partner, click here!  

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PACE Staffing Network is one of the Puget Sound’s premier staffing /recruiting agencies and has been helping Northwest employers find and hire employees based on the “right fit” for over 40 years.

A  4 time winner of the coveted “Best in Staffing” designation , PACE is ranked in the top 2% of staffing agencies nationwide based on annual surveys of customer satisfaction.

PACE services include temporary and contract staffing, temp to hire auditions, direct hire professional recruiting services, Employer of Record (payroll) services, and a large menu of candidate assessment services our clients can purchase a la carte.

To learn more about how partnering with PACE will make a difference to how you find and hire employees,  contact our Partner Services and Solutions team at 425-637-3312, e mail us at partnerservices@pacestaffing.com or visit our website at www. pacestaffing.com/employers.