What Kind of Staffing Agency Do You Need?
Today’s employers face a wide range of staffing challenges requiring them to look outside their organization for solutions!
The good news is that the “staffing industry” is made up of a large and diverse group of companies who in aggregate have the solutions employers need.
The bad news is that it’s sometimes difficult for employers to know what type of staffing company to go with for which type of service solution.
The Lines between Direct Hire and Temporary Staffing Have Blurred.
The last 20 years has seen the staffing industry not only grow at record setting clips, but continuing to go thru many changes that have blurred the lines between the different types of services any one agency might offer. What once was a very easy way for a purchaser to know the difference between an agency focused on direct hire, recruiting services and an agency focused on interim temporary staffing, is no longer.
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 represent only two segments 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 Marketplace is very Diverse!
If you’re looking for a staffing agency you’ll find some to be very specialized – focused on only one or two defined service solutions – and some very diverse.
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.
Other staffing companies, 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.
What type of “staffing agency” should you use for which type of staffing need?
Here’s a quick look at the different types of agencies that Northwest employers have to choose between.
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, both temporary and contract employees are subject to a cancelled contract, or an interim assignment ended “early”…so job security is no longer a differentiating factor. 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.
…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.
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 tend to deliver so 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.
….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…
…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.
Bottom-line – while how a staffing company labels themselves provides general information on the types of services they will provide, an employer looking for hiring help needs to explore each agency’s menu of services to find out if they are the right solution for their specific hiring needs.
PACE Staffing Network is one of the Puget Sound’s premier staffing /recruiting agencies and has been helping Northwest employers find and hire the right employees for over 40 years. A 3 time winner of the coveted “Best of 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 placement services, and Employer of Record (payroll) services.
To learn more about how partnering with PACE will make a difference to how you find and hire employees, contact us at 425-637-3312 or e mail our Partner Solutions team at email@example.com.