Pros and Cons of Staffing Agencies: An Honest Reflection
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[fa icon="calendar"] Dec 29, 2018 7:54:00 PM / by Michelle Nystrom

Michelle Nystrom

The Pros and Cons of Staffing Agencies You Need to Know

Pros and Cons of Staffing Agencies-An Honest ReflectionBefore trying anything new, it is always best to understand both the pros and cons. This is also true of staffing agencies. Here are the most important positive and possibly negative points about staffing agencies.


Potential Pros of Using a Staffing Agency

Working with a staffing agency has a number of things going for it. Here are the most beneficial.


Prescreened Candidates

Many staffing agencies require demonstration of a certain level of knowledge before sending a candidate out for an assignment. This means you are being sent employees who already have the knowledge required to do the job they are given. At most, all you'll need to do is give them instruction on any special requirements that are unique to your business.


Ensure You're Compliant with Employment Laws and Statue

Trying to keep up-to-date with all the changing rules and regulations regarding employment can be a full-time task in itself. When working with a staffing agency, you don't have to keep track of everything involved because the staffing agency is the actual employer of the people they send. Knowledgeable agencies will keep you up-to-date on any law changes and regulations you need to be aware of.


Save You Time

How often have you gone through a long hiring process, trained the person you hired, and then within a short period of time found that they weren’t the right fit for the position or they left for another job? You then have to go through the whole process again. When you hire through a staffing agency, not only can they end the assignment of employees who aren’t the right fit but they can find you a replacement.


Save You Money

1. The HR department of a business can be very expensive. Not only do you have to staff it but you also have many costs you might not consider at first. The space needed to house the staff and all the paperwork costs money. The employee or employees require a salary and benefits. In addition, your HR department is responsible for keeping track of employee hours, knowing what the latest labor laws are and how to comply with those laws. When you use a staffing agency, they take care of all that. You can run your business in less space and not worry about additional salaries and benefits.

2. You spend money on advertising your openings, need to spend time going through applications and resumes, spend hours interviewing, checking references and running background checks, and have to train the new hires.  All of this translates into money being spent, from the obvious cost of advertising to the time paid for reviewing and interviewing. Cost is also involved in background checks and new hire paperwork. All of these things can be effectively avoided when you go through a reputable staffing agency.

3. Not only do you reduce the expense of having to pay someone for the many hours involved in recruiting, interviewing and training employees but you also don't need to pay for workers during time periods when there is no work for them. You don't have to deal with tracking overtime or  sick pay.. Payroll expenses can add up quicker than you realize.

4. When you hire through a staffing agency, they are the actual employer so you are not responsible for benefits such as vacation time, holiday pay or other benefits your regular full-time employees may be eligible for. This can save you thousands of dollars every year. When working through a staffing agency, the only "employee" you actually have is the agency itself. They are the ones who employ the candidates they send in.


Try Before You Buy

Sometimes a person seems to be the perfect candidate for a position. Once they start, however, things can get in the way and create problems. Sometimes a person's personality just doesn't fit with the atmosphere of a business. Maybe they aren't a team player and your business is a laid-back place where people are more like family than coworkers. Or maybe the person doesn't have the same work ethics you expect of your employees. Whatever the case, productivity can suffer. With a staffing agency employee, you can request a replacement without having to lose out on all the time and cost of hiring an employee that doesn't fit with your business.


Increased Flexibility

Many businesses have slow periods and other times production is way above average. In businesses such as this, there is often the need to hire more workers during the busy times, but then you are either stuck with having to pay extra staff members when times slow down or you are put into a position where you have to let people go, causing them financial hardship and increasing the liability for your business. This doesn't happen with staffing agency employees. You can hire them for the short period they are needed and then they can go to other positions when you don't need the extra help. You aren't put into a position of paying payroll to employees who have no work to do and you don't have to worry about the termination process at the end of your busy season.


Increased Talent Pool to Choose From

When you place an ad for an open position, you have no guarantee that it will reach the person that will be the best fit for the position. While a staffing agency can't guarantee you will find that perfect employee, they can widen your search and get you in touch with people who may never have crossed your path. They narrow the field of choices and send only qualified people, making your job much easier. When it comes to finding the perfect employees for your business, it pays to have as many resources as possible. The correct staffing agency can be one of your greatest resources in this important endeavor.


Increased Productivity

Staffing agencies help you have enough staff available to get things done without having to fill long-term positions. Filling positions takes time when done the traditional way, and having readily-available workers only a phone call away allows for no lag in production. You never have to work short-staffed.


Take Advantage of Specialists

Whether you need a special set of skills for only one project or you need to find someone long-term who has these skills, a staffing agency has the ability to find the correct individual. They are trained to know what to look for and where to find it.


Potential Cons of Using a Staffing Agency

Nothing comes with only positive traits. Here are some potential issues working with a staffing agency may present.


Morale Issues

Temporary staff may not be emotionally invested in your business success as long-term employees are. They may also feel like outsiders because they don't have the same benefits as regular staff.


Lack of Work Ethic

Without emotional investment in the company's success, temporary workers may not give their best because they feel they won't be around long enough to reap the rewards of hard work.


Poor Recruitment

Not all agencies put the time and effort into hiring quality recruits and you may find this reflected in the quality of work. The best way to avoid this pitfall is to make sure you check an agency out thoroughly before hiring them to fill your employment needs.

Team Bonding Issues

Temporary workers not only may feel that they are not considered as valuable as long-term employees but the regular employees at a business may not take the temporary workers seriously. This creates friction among the workers that can reflect poorly in productivity.


Higher Wages

It is possible that you pay out more in wages to temporary employees because your cost will include their wages and the fee charged by the staffing agency. Savings on hiring through a staffing agency are realized in things like hiring costs and benefits. It is important to note, however, that while you have a mark-up with an agency to cover things like workers’ compensation and taxes, these are costs that you are paying already on your regular employees so the increased cost is often not as inflated as it seems


Training

Every company does things their own way and each has tasks that are unique to that company only. The employees you get from a staffing agency will have the training in skills that are necessary but you will still need to take the time to teach them the unique methods and skills that come with working at your business.


The Verdict

Working with a staffing agency has some drawbacks, but overall the benefits are much greater. When making your decision about whether to go this route or not, take everything into consideration and make sure you know exactly what is important to you as a business owner or supervisor. Many of the drawbacks can be avoided with the knowledge of their possibility. For example, you can hold a meeting in advance letting regular workers know that their jobs are not in jeopardy and that you expect them to treat the temporary workers decently. You can also reassure incoming temporary staff that their work is valuable to your business. In the end, the positives far outweigh the negatives.

 

This blog post is intended for informational purposes only and does not constitute legal advice.  No attorney-client relationship is created between the author and reader of this blog post, and its content should not be relied upon as legal advice.  Readers are urged to consult legal counsel when seeking legal advice.

 

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Topics: Hiring the Best People, Management