The terms staffing agency and temp agency are synonymous in most people's minds — and for good reasons. The two kinds of organizations have overlapping business models, often providing the same services. However, staffing agencies typically offer a wider array of options, with more solutions to their clients' labor issues and needs.
Both temp and staffing agencies offer temporary workers to their clients. Many specialize in administrative help, providing administrative assistants, receptionists and file clerks. However, agencies exist in a variety of specialties, including accounting, healthcare workers and laboratory technicians. Agencies provide short-term labor ranging from a single day to several months of coverage, helping companies deal with unexpected absences, busy periods, illnesses, maternity leaves and special projects. Agencies, employees and clients all expect temporary assignments to end.
Staffing agencies usually offer, if not focus on, their clients' long-term needs. Many healthcare staffing firms focus on travel nurses and therapists who work in medical facilities around the country on assignments lasting at least 13 weeks and, in many cases, longer. The same goes for agencies specializing in information technology professionals, which supply companies with programmers and hardware specialists who may work on projects lasting more than a year. During this time, the agency bills clients for the hours the employee works and makes its profits from the gap between what the agency bills and the amount it pays the employee.
Temporary labor is costlier to companies than permanent employees are. When a temporary absence creates the need for short-term help, the higher cost of help from a temp or staffing agency may be a company's only option. But when companies have open positions, they usually prefer to fill them and avoid the high hourly billing rates of agencies. Staffing agencies serve their name because they provide several staffing solutions — including recruitment and permanent placement of full-time employees. Their one-time fees are often based on a percentage of an employee's first-year income, although some have flat-fee arrangements with their clients.
Sometimes businesses have short-term needs and find the right temporary employee themselves. However, because the arrangement will be temporary, they don't want to add the person to their payroll. Or, perhaps they want to give someone a trial run without committing to permanent employment. When this happens, they can turn to a staffing agency that offers payroll services. The staffing agency adds the temporary employee to its payroll and bills the client at a lower rate than it would if the agency were providing a temporary person it recruited. Payroll services also come with no conversion or penalty fees if and when the client decides to hire the employee.