How Are Staffing Agencies Paid?
Some individuals need help finding employment that reaches beyond the typical job search in newspapers and online job boards. This is where a staffing agency steps in to facilitate a job opportunity. Whether you're a job searcher or someone who is thinking about starting a staffing agency, you should know how an agency is paid and how it applies to your situation.
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What Is a Staffing Agency ?
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A staffing agency is a company that assists with the placement of qualified employees to regional businesses. These agencies act in the capacity of middlemen to connect the employer with potential employees. Employment recruiting is a very expensive and time consuming endeavor for companies. These firms prefer to hire staffing agencies to handle the details. As is the case with any for-profit firm, a staffing company must get paid for its role in bringing workers to employers.
Hiring Process
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The hiring process at a staffing agency has three main parts. First, the staffing agency must interview and evaluate the potential worker to determine if the person is fit for hiring. Next the agency refers qualified workers to hiring companies. If the worker passes the interview process of the hiring company, the agency then creates an employment contract with the hiring firm.
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Getting Paid
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A staffing agency is usually paid directly by the hiring companies that they serve. When the staffing agency sends a new worker to the firm, the hiring company must submit agreed-upon payments for the employee directly to the staffing agency, who in turn pays the employee. When and if the employing firm decides to take on the employee as a full-time worker, it must pay the staffing agency a flat fee, which is akin to a finder's fee.
Other Considerations
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If a contracted employee wants a raise, he must meet with a representative of the staffing agency. The agency generally receives a percentage of the worker's wage, so any raise may reduce the agency's profit unless the agency negotiates with the hiring company. Conflicts may arise, which can complicate the payment transfer of funds from the employing firm to the staffing agency. For instance, if the employee does not attend the job as agreed or fulfill his requirements, this may cause the employing firm to withhold payment until both parties can resolve the issue.
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