What do you do when you need to ramp up hiring for only a short amount of time? Maybe your logistics and distribution business needs temporary warehouse workers and delivery drivers during the busy holiday season. Or your consulting firm is searching for a project manager to support a six-month assignment for a large client. How do you go about finding this talent? 

That’s where a temping agency comes in. Temporary employment agencies, also known as temp agencies, draw from their pool of vetted employees and place them in short-term job openings with companies they have contracts with. They are different from staffing agencies, which also match job candidates to employment opportunities but place candidates in both temporary and permanent positions. Instead, temping agencies focus only on temporary jobs. 

How do temp agencies work?

A candidate will apply and interview to be accepted into the temp agency’s workforce. If a job opportunity aligned with their skills becomes available, the agency deploys the worker to that job. Temporary workers are directly employed by the temping agency, not your company.

If you’re interested in working with a temp agency, research which ones are the best fit for you. If your company needs a high volume of short-term workers, you can contract with several temping agencies at once. If you’re looking for short-term employees with a particular skill set, consider working with an agency that focuses on specialized industries and skills.

Once you find a temping agency aligned with your hiring needs, you’ll set up a contract. Contracts typically outline the roles you’re looking to fill and payment terms. Temp agency fees are usually based on the workers’ hourly rate plus an additional expense to cover the agency’s services. 

Who uses temp agencies? 

Companies tend to employ temporary workers during their busy seasons or for short-term projects, though sometimes there’s an opportunity to convert a temporary role into a permanent one. According to the American Staffing Association, temporary and contract workers are employed across a variety of industries, with the majority in industrial (36%), office-clerical and administrative (24%), and professional-managerial (21%) roles. Industries that rely on highly specialized talent, such as healthcare, engineering and tech, also use temp workers. For example, accounting firms may hire bookkeepers and auditors during the busy tax season. A tech firm might bring on short-term programmers to quickly develop a new software product.

What are the pros and cons of using a temp agency?

When deciding if a temp agency is the right recruitment solution for you, think about your staffing needs. How many short-term hires are you looking for? Do they require specialized skills? What are your current recruiting resources, including HR staff capacity and budget? How comfortable are you with outsourcing recruitment activities? Here are a few pros and cons to consider.

Pros:

  • You’ll save time. Since you have access to a large pool of workers already vetted by the temp agency, you can quickly bring on short-term employees without going through a full recruitment cycle, such as posting the job, reviewing resumes and interviewing candidates. This flexibility makes temping agencies a good solution when you must quickly bring on new staff.
  • You’ll save money. Using these agencies typically reduces overhead costs, though this ultimately depends on the fee structure of the agency you contract with. Temporary workers don’t receive health insurance, retirement and other benefits you offer to permanent employees, resulting in large cost savings. The flexibility of these workers further reduces cost since they’re released when their services are no longer needed.
  • You can source potential permanent candidates. Some companies contract with these agencies for “temp-to-hire” roles, which allow the firm to evaluate new hires and make sure they’re a good fit before offering a permanent position. This is also a common practice for growing companies that want to build their workforce but aren’t sure if they have the demand or resources to commit to a permanent hire just yet.

Cons:

  • You don’t have full control of the hiring process. While temping agencies can save time and money, outsourcing means you can’t use your go-to recruitment practices to ensure new hires are a great fit for your company. Do your research and establish relationships with agencies aligned with your standards and values to mitigate this potential downside.
  • Relying on temporary workers may create inefficiencies. While temp agencies make the recruitment process more efficient, you’ll still need to onboard and train your new hire. And since temporary roles often experience high turnover, this is something you’ll do quite often — resulting in increased training time and cost. Depending on the type of work, constant churn of short-term employees can also make it difficult to establish cohesive teams, causing overall productivity to fall. Examine how you can improve your onboarding, training and team-building programs if you experience these challenges. 

To sum it up…

If you’re searching for a flexible, short-term workforce, temp agencies can be a great resource to quickly recruit temporary employees. Whether you’re hiring a large volume of workers for a busy season, searching for niche skill sets to complete a project, or testing out new talent with temp-to-hire roles, a temp agency may be the solution to your recruitment needs.

This is part of a series covering fundamental topics in HR and recruiting. Want more? Learn more about what is recruitment, what is talent management or what a job requisition means