Pros and Cons of Using a Temp Agency

As a business owner, it’s important to understand the professional resources that are available to you. Temp agencies can offer you quick and effective staffing solutions that allow you to focus your energy on broader business aspects. Read further to learn more about the role of a temp agency, the pros and cons associated with using a temp agency, how to determine if a temp agency is right for your hiring needs and tips to help you find a temp agency that meets those needs.


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What is a temp agency?

A temp agency is a B2B (business to business) organization that aims to use industry knowledge to:

  • Seek out talented professionals
  • Create a pool of qualified candidates
  • Work with businesses at a client level to determine their staffing needs
  • Select one or more qualified candidates to work for their client for a set period of time
  • Complete payroll and taxes for those candidates on behalf of their client
  • Maintain beneficial relationships between clients, their candidates and their business


Pros and cons of using a temp agency for your hiring needs

There are a variety of potential pros and cons of using a temp agency for your business:


Pros of using a temp agency

Pros of using a temp agency include:

  • Saves you time: Temp agencies can potentially save you and your HR department valuable time because temp agencies already have qualified individuals that they sought out and interviewed. Therefore, by the time you come into contact with a potential candidate, you may only have to determine whether they fit well within your company.
  • Saves you money: Hiring a temp agency to help you get temporary workers could potentially be more cost-effective than hiring someone to a permanent position. This is especially helpful as the temp agency typically pays their salary, benefits and other expenses.
  • Gives you access to a large pool of talent: By working with a temp agency to hire temporary workers, you also gain access to a large pool of candidates that the agency took the time to find. You might identify additional areas where you want temporary help for your business.
  • Provides an opportunity for permanent employment: If a temporary hire turns out to be a valuable asset to your company, you can offer them a permanent position within your company.


Cons of using a temp agency

Potential cons of using a temp agency include:

  • Limited time frame for training: Although temp agencies may have given your temp some sort of professional training prior to being sent to your company, you often still need to train them to complete certain tasks and uphold your company’s values. Depending on the allotted time frame for their placement, you may have to rush this process to get them acclimated to your business before their contract is up.
  • Lack of loyalty to your company: Because they might only be with your company for a short amount of time, temps might have low morale, productivity or lack motivation to do well at your company.
  • Potential for misunderstanding company values: A temp agency might not understand your exact needs or company culture from their outside perspective. Establish a set of traits and qualifications you expect of potential candidates to help get the result you want from the agency.


How to determine if your company should use a temp agency

Here’s how to determine if you should use a temp agency:


1. Identify the immediacy of your needs

First, decide whether hiring someone is an immediate need for your company. If you don’t need to fill a position immediately, you may want to use a temp agency because they typically screen their candidate pool ahead of time. For example, if a graphic designer responsible for creating images for your upcoming ad campaign suddenly takes another job offer, hiring a temp agency with access to marketing professionals could help you complete your campaign in time.


2. Review your internal staffing capabilities

Make sure you review the different skill sets and department responsibilities within your company that could benefit from outsourcing temporary hires. For example, if you have a small HR department that’s overwhelmed with responsibilities surrounding employee benefits, payroll, employee services, you might benefit from transferring certain recruiting responsibilities onto a temp agency.


3. If you own a small business or start-up

If you own a small business, sole proprietorship or are just starting a business, hiring a temp agency could be a great way for you to build your business or substitute for the areas you lack. For example, if you own a small business, you may hire an accountant from a local temp agency each year to help you prepare your taxes, in lieu of an accounting department.


Tips for finding a good temp agency for your business

Here’s a list of tips to help you find the right temp agency for your business:

  • Search for firms who specialize in areas you need
  • Read reviews and customer testimonials
  • Make your staffing expectations clear
  • Always review contracts prior to agreement
  • Don’t be afraid to change temp agencies


Temp agency FAQs


What kind of jobs do temp agencies offer?

Temp agencies can offer a wide variety of jobs within a variety of industries. Common jobs include those within administrative, HR, trade, engineering or IT professions. Determine if a temp agency has the position you’re looking for by visiting their website and reviewing their areas of specialty.


How much does it cost to use a temp agency?

The amount it costs to use a temp agency may vary depending on the location, services provided or the agency itself. According to Innovo Staffing, the average amount it costs for companies to use temp agencies is usually 25% of the salary that the temp agency will pay to its chosen candidates. For example, if a temp agency promises an IT specialist $48,000 to complete a one year position at a company, the temp agency might charge $12,000 in fees.


Do temp agencies give raises?

Temp agencies can potentially give raises to their outsource candidates. This ultimately depends on the agency itself and how valuable they believe a temp worker could be to their clients. Talk with your company’s temp agency to determine whether they give raises and, if so, how those raises affect your company fees for their services.

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