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What is a Staffing Agency? – Everything You Need to Know About It!

Has hiring new talent for your business become a hassle for you? No worries as we have the magical wand for all your needs. You must have heard about staffing agencies for recruitment of candidates and might be wondering, “What is a staffing agency?”
A staffing agency provides employees to businesses to fulfill their job vacancies. The staffing agency charges a flat fee or a percentage of the employee’s salary. The agency benefits the business by saving the cost, time, and effort of hiring, and providing qualified candidates to the employers. 
Before hiring a staffing agency, you must know how they work, make their profits, utilize their experience to find the right talent, and whether or not they are worth it. And that’s why we have a complete guide to understand what a staffing agency is and what it does for businesses. So, let’s get started!

What is a Staffing Agency?

Finding the right candidate for a specific job position is challenging because it requires precision. Diving into a pool of candidates to find the right fit for your business is a time-consuming process. That’s when a staffing agency comes into the picture!
A staffing agency helps companies find the right employees. Staffing agencies recruit employees from various sources like LinkedIn, Indeed, and other job boards, conduct interviews, and hire them for the agency. In short words, they streamline the recruitment process for your company.
Once the employee deems fit for a specific position, the agency recommends that employee to the employer. The employer then measures the skill set of the candidate and hires them.
If the staffing agency doesn’t have the right fit for a specific position, they put up job posts on recruitment boards to help the employer find a suitable employee.
The importance of a staffing agency can be figured out by the fact that the revenue for staffing agencies reached 650 billion USD in 2022 after continuous growth. So, many small and large enterprises trust staffing agencies with the recruitment of new employers for any position.
They also provide access to global candidates by working as an international recruitment agency.

What Does the Staffing Agency Get?

You might be wondering, “What does the staffing agency get out of this?”
Well, here’s the thing:
Staffing agencies make money by providing the right employers to the companies that hire them.
But that’s not it!
Staffing agencies utilize four main models for their earnings:

  • Flat Fee
  • Percentage of Salary
  • Retained Search Service
  • Subscription Model

Flat Fee Model

In the flat fee model, the staffing agency takes a one-time flat fee for providing candidates to the hiring company. The flat fee depends on the budget of the hiring company and not on the skillset of the candidates. So, it makes budgeting easier for both the employers and the staffing agency.
This fee is paid before the staffing agency provides the candidate information to the hiring company. The staffing agency may charge more from a high-end large-scale company while providing a discounted flat fee for a small business based on their budget.
The flat fee arrangement has a downside:
The staffing agency can’t charge more for a high-salaried position because the fee doesn’t depend on the candidate’s expertise or salary.
However, a lower flat fee might attract employers to hire candidates for various positions from your pool.

Salary Percentage Model

The salary percentage model is simple:
The staffing agency keeps a percentage of an employee’s salary, say 40% or so. So, if the salary suggested by the employer is $20 per hour, the staffing agency earns $8 which is paid by the employer. It is decided between the staffing agency and the employer.
Insight Global (Staffing Agency Kansas City) keeps around 30-40% of the salary of their employees to make their profit.
Another example is Aerotek (Staffing Agency Reno) which keeps 25%+ of the employee’s salary.
This model is beneficial for staffing agencies that provide high-salaried candidates to employers. In this scenario, the staffing agency earns big bucks as compared to a flat fee.

Retainer Model

In the retainer model, the staffing agency gets a retainer salary for finding and providing candidates to the hiring company. The hiring company pays the fee before getting any candidates so the fee depends on the company and not the candidate’s expertise.
The retainer model usually has two parts:

  • The first part is paid for hiring the staffing agency by the hiring company.
  • The second part is paid once the hiring company gets a satisfactory candidate.

So, whether the hiring company finds an employee or not, the staffing agency is paid nonetheless.

Subscription Model

Some staffing agencies form their own subscription models through which hiring companies can access various pools of candidates. The agency can split the model into three parts: one with entry-level candidates, one with intermediate-level candidates, and one with expert-level candidates.
Similarly, the number of candidates in each model varies as well. This helps the hiring company choose a pool on the basis of their budget and they don’t have to pay high fees for candidates they won’t require in their team.

What are the Benefits of Hiring a Staffing Agency?

How does a staffing agency help a hiring company and why should they go for one? If that’s a question lingering in your head, read further!

Cost Savings

A staffing agency streamlines the hiring process for companies saving them a lot of money. Recruitment of suitable talent is a costly practice for any business. Companies need professionals to conduct interviews and decide the entrance of a candidate into their firm.
Moreover, spreading the word about a job opening is also costly. You have to boost job posts and feature them on job boards to find the right set of talent. Hiring a staffing agency saves you from all these costs and you can use their talent pool to find a befitting candidate.
A staffing agency cuts the HR cost as those responsibilities are left to the agency itself. On average, an HR is paid $59,998 per year. So, your company will be saving such a huge cost.

Access to Qualified Talent

While finding candidates to hire manually, employers have to go through all levels of workers. Experienced, non-experienced, newbies – everyone applies to job posts. Reviewing these applications becomes an uphill battle.
On the other hand, a staffing agency provides worthy candidates to the hiring companies. The candidates have already been screened and interviewed by the staffing agency. So, trusting their skills becomes easier for employers.
If the staffing agency is an international recruitment agency, they will provide you access to candidates from all over the globe.

Time-Saving and Efficient

Instead of taking interviews of hundreds of candidates, the employers only have to take interviews of a handful of people recommended by the staffing agency. The hiring company doesn’t have to go through the resumes of thousands of candidates.
All this saves the companies a lot of time and effort. They can invest this time into better things ultimately leading to the growth of the company. So, hiring a staffing agency saves a company time and effort and enhances the company’s productivity.

Insightful Help by the Agency

The staffing agency has immense experience with a diverse range of candidates. So, their knowledge about the labor market, be it local, national, or international, is huge.
Here’s how a staffing agency carefully recruits talent from various sources!
Companies can benefit from the expertise and experience of a staffing agency. The staffing agency suggests what kind of candidates will be suitable for the company based on their level, job position, budget, and skill requirements. All this will lead to hiring an apt candidate with the proper skill set leading to the growth of the business.

Instant Hire

Facing busy periods in your business and need to hire more staff instantly? A staffing agency will definitely come in handy at such a time. All you will have to do is let them know your requirements and you will be able to hire an employee as soon as possible.
This way, there won’t be any delays in your business processes and you can keep up with business growth periods.


How Much Does a Staffing Agency Take Out of Your Salary?

On average, a staffing agency takes more than 25% of an employee’s salary. But this amount is usually paid off by the company that hired the employee. For example, the hourly salary of an employee is $50 and the staffing agency demands 30% of the employee’s salary. The hiring company will be paying $65 in total.

What are Staffing Agency Examples?

Some staffing agencies around the world include:

  • Integrity Staffing (Staffing Agency Reno)
  • Morgan Hunter (Staffing Agency Kansas City)
  • Pride Staff (Staffing Agency Ontario, CA)
  • Randstad (Staffing Agency Nashville, TN)
  • Murray Resources (Staffing Agency Houston, TX)

In Closing…

Now you know all about staffing agencies, how they work, their earning method, and how getting a staffing agency can benefit your business. Staffing agencies make the recruitment process efficient, productive, and easier for different firms by providing them with qualified candidates. So, try out a staffing agency now!

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