Temp Agency: Understanding the Pros and Cons (+Top Temp Agencies)

Temp agency

Long before words like “gig economy” and “side hustle” became commonplace, businesses used temp agencies to supplement their workforces on an as-needed basis. Of course, the entire concept of temporary work has changed with the introduction of on-demand staffing platforms. However, temp agencies remain an option for select companies and job seekers alike. Hiring a new employee or finding a new job can be a time-consuming and costly process. A professional temp agency will recruit excellent candidates for open positions, run background checks, arrange and conduct interviews, and handle payroll and administrative paperwork for all temporary hires. By the end of this article, you will understand what a temp agency is, the benefits and drawbacks of the solution, and alternative ways to find talent.

What is a Temp Agency?

A temp agency, also known as a temporary employment agency, is a company that connects businesses with workers for temporary or contract work. A temp agency costs businesses for the personnel it recruits to fill tasks, and the workers are employed by the temp agency. This arrangement allows workers to find short-term and low-commitment opportunities. Also, the businesses as well avoid hiring and firing full-time employees to fill a short-term need.

How Does a Temp Agency Work?

The primary distinction between temp agencies and traditional HR departments is that temp agencies handle the hiring, firing, and onboarding of temporary employees. This means that the contracting company has no involvement in paying or providing benefits to the temporary worker. The client just comes to an agreement with the temp agency based on the number of temporary workers placed. The client then pays a percentage or hourly rate for each worker provided.

The temp agency is responsible for negotiating the workers’ schedules, pay, and all other important employment details. If there is a problem with the client, the worker will go to the temp agency to report it. If, on the other hand, a client is dissatisfied with the performance of a temp, they must reach an agreement with the temp agency. They do not have the authority to directly terminate the worker.

Whether full-time, part-time, or seasonal, all temps work for the temp agency. It is the agency that provides these employees with benefits, tax status, and other perks.

The Functions of a Temp Agency

A temp agency can fill a variety of roles, but the basic process is as follows:

  1. The agency has a pool of workers who come to the agency looking for work.
  2. The agency examines the workers, screening out undesirable applicants and assessing what capabilities the workers they hire have.
  3. An employer who requires temporary workers enters into a contract with the agency. The contract specifies the types of workers the employer is looking for. They as well specify the rate paid per hour of work and other details.
  4. The agency selects workers with the necessary skills from its pool of workers and assigns them to the new temporary employer.
  5. The employees are paid on an hourly basis by the agency.
  6. The employer pays the temp agency based on the hourly wages of all workers provided. They also pay an additional amount to cover the agency’s services.

Employers who use temp agencies benefit from a variety of advantages. They drastically reduce the amount of time and effort required to screen applications and interview job candidates.

While most businesses don’t like to admit it, temp workers save money. They can be hired full-time without providing benefits like health insurance or paid vacation time. Microsoft, for example, is known to use thousands of temporary workers. They lost a class-action lawsuit in 2000 that required them to pay benefits to “temporary” workers who had been with the company for 10 years or more.

Workers benefit from temp agencies as well. Submitting a resume to a temp agency can provide a worker with access to dozens of potential jobs, depending on their skills. It is far more efficient than applying for and interviewing for multiple jobs.

Using a Temp Agency

There are several factors to consider if your company is thinking about using a temp agency. Do you require a large number of unskilled workers for a job with a high turnover? Are you seeking a few highly specialized professionals in technological fields? If you require a large number of workers, it may be best to contract with several temp agencies to ensure that you have access to all of the workers you require. Working with a single agency, on the other hand, may allow you to negotiate a discount on the agency’s fee.

The cost of using a temp agency to provide workers varies greatly. It will depend on the jobs being filled (unskilled jobs such as a basic office or light industrial work pay less than technical jobs), the cost of living in the region, the agency’s specific standards and fee structure, and any discounts or deals negotiated as part of the contract. A good temp agency will be upfront about the wages and fee structure, so you know exactly what you’re getting paid.

For employees, the process of using a temp agency is relatively simple. It’s exactly like applying for a job. You submit a resume (possibly online, depending on the agency), fill out an application, and have an interview. This meeting can be very brief for unskilled positions; for higher-paying jobs, it can be more like a full job interview. Once you’ve been accepted into the agency’s workforce, you’ll be offered one or more jobs that match your skills, if any are available right away.

The temp agency typically determines your pay rate and pays you directly. You may discuss this with the company if you want to turn the temp job into a full-time permanent job with the employer assigned to you.

Specialized Temp Agency

The average temp agency has a large pool of generalized, unskilled workers who can be placed in any basic job position. These are jobs that require little training and no special schooling, degrees, or industry experience. Office workers, assembly line workers, security guards, janitors, and other similar positions are all important. They can be filled by almost any temp agency.

For high-level jobs, some employers require specific skills. Perhaps they need to update a suite of software for a new client, and they require an experienced programmer to work only for the two months required to complete the project. To assist with a major merger, a bank may require the services of a highly skilled accountant. The accountant’s job is done once the merger is complete. Specialized temp agencies can find qualified candidates for these skilled but temporary-term positions.

There are many different types of temp agencies. Temporary agencies provide jobs for a variety of people, including computer help desk workers, data entry specialists, legal compliance auditors, and even staffing specialists. Some agencies specialize in more diverse fields, such as natural gas pipeline safety engineers, paralegals, project managers, and even doctors, which may surprise you. Some agencies are generalists, providing a broad range of skilled workers, whereas others specialize in a specific field, such as computer science or medicine.

In some ways, highly specialized temp agencies function similarly to recruitment agencies. Instead of supplying large numbers of workers, they provide a smaller number of high-quality workers with the necessary education, experience, and skills for the lucrative jobs they offer.

How Much Does Hiring a Temp Agency Cost?

Temp agencies often charge client organizations a markup ranging from 20% to 75% of what their temps are paid. For example, if a temp agency pays a temporary employee $20 per hour plus a 25% charge, the company will pay the temp agency $25 for each hour worked. The employee will receive $20 off the $25, with the remaining $5 going to the temp agency. This cost is often higher for firms looking for individuals for more skilled work, higher-ranking positions, or difficult-to-find expertise.

Once the post is filled, payment is normally required to the agency. The total cost will be determined by the number of applicants you want to find, the number of office locations you want to hire for, and the duration of the position(s) you want to fill.
Some agencies may work on a flat fee basis, which means that the business pays a retainer until their empty post is filled. This pricing structure is commonly employed by agencies that specialize in top-tier talent.

When Should You Consider Hiring a Temp Agency?

If your firm is looking to replace any open temporary tasks, such as seasonal jobs, help for short-term projects, or maternity leave stand-ins, temp agencies are a perfect alternative. They are also quite useful if you need to hire labor as quickly as possible. This is because they drastically shorten the recruitment process.

The Benefits and Drawbacks of Temp Agencies

The Benefits of Temporary temp

  • Working with a temp agency provides simplicity if the alternative would be hiring and firing part-time staff on a regular basis. Instead of dealing with mountains of paperwork at your own company, you might hire a temp agency to handle those administrative tasks. This is due to the fact that temp agencies will hire the workers and handle the obligations that come with their position.
  • Finding staff quickly is generally easier with temp agencies than it is on your own. Temp agencies often have a huge pool of pre-screened individuals. They handle the work of reviewing resumes, conducting preliminary interviews, and other screening methods to save you time on these basic hiring tasks.
  • Using temp agencies to try out new employees before hiring them full-time is a popular reason. If a temp agency assigns a worker to the job and you believe they have tremendous potential, you could chat to the agency about hiring the employee at your company. There may be a price associated with this decision, but it is another option for finding full-time employees if you require them.

The Drawbacks of Using a Temp Agency

  • Contracts containing restrictions like as use requirements are frequently required by temp agencies, which means you may still end up overstaffing only to meet their needs.
  • You have little control or insight into which workers show up. Because temp agencies take a primarily hands-off approach to locating workers, you don’t get to see the entire pool of potential candidates for your job. If you prefer to know all of your possibilities for possible employees, this may not be a good fit.
  • Temporary staff may not be as highly motivated to succeed as your part-time or full-time employees. Because of the temporary nature of these workers’ engagements, as well as the fact that they are hired by a temp agency and feel secure in that, they may regard their time at your organization as just another stop on their journey. If the temp agency does not regularly monitor employee performance reports and weed out underachievers, you may find yourself with low performers on a regular basis. This problem will be difficult to solve until you gain knowledge into the workers beyond what the temp agency tells you.
  • Using a temp agency incurs additional charges. Utilizing a temp agency to locate workers can be more expensive than finding people yourself or using some of the options suggested below if you are wanting to save money.

Alternatives to Temp Agency

#1. Find your own personnel.

The most time-consuming option is to find the staff on your own. This provides you the most control over who you recruit, but it also requires more work from you. You’re probably familiar with the common technique of seeking workers for yourself: posting to all the job sites online and putting up “now hiring” signs throughout town. Then you go over the resumes and choose a few folks to interview before taking a chance and hiring someone. It’s a lot of work, but it’s not a new notion.

#2. Find contractors on your own.

If you’re still looking for temporary workers but don’t want to partner with another company to get them, you might look for independent contractors yourself. Traditional job boards, such as Craigslist or Indeed, can help you find independent contractors, but this will need more work from you than some of your other possibilities. With all of the posting and following up, it soon becomes a time-consuming procedure to find someone to work on a temporary basis.

#3. Staffing Agencies that recruit and test candidates

Some staffing firms differ from temp agencies in that a specialist staffing firm might locate individuals for you to recruit rather than the agency hiring the worker. In most other parts of the relationship, a staffing firm will work similarly to a temp agency, including a more hands-off attitude for you. A staffing firm, on the other hand, may not be able to find work as quickly as a temp agency.

They will handle the screening and assessing of skill sets, and will only present you applicants who they believe are good work. This comes at a fee, but it is still less work for you than hiring someone yourself.

#4. Companies that provide on-demand staffing

On-demand staffing is a new concept. These organizations use cutting-edge technology to quickly discover temporary workers for you. They let you choose the duration of the work required and swiftly invite pre-screened workers to assist.

You may work with one of the greatest on-demand employment firms, or if you have a manufacturing and logistics business, you can benefit from a solution more customized to your industry, such as Veryable.

#5. On-call labor

Our labor solution for manufacturing and supply chain activities is referred to as on-demand labor. We differ from staffing firms in that our platform is an operational tool that allows businesses to adapt to demand rather than depending on the guesswork of estimating headcount based on averages.

The primary distinction between on-demand labor and regular staffing is that on-demand labor is best used to increase flexibility and adapt to demand with agility, whereas traditional staffing is ideal for maintaining the same headcount or completing one-time projects.

The Top Temp Agencies in 2021

  • Randstad is the best overall Temp agency.
  • Kelly Staffing was named runner-up and best overall.
  • Adecco is the best option for quick placement.
  • AMN Healthcare is the best for healthcare staffing.
  • Aquent is the best choice for creative and marketing staffing.
  • TEKsystems is the best company for tech and IT staffing.


#1. Randstad

Randstad, which was formed in the Netherlands in 1960, is the world’s largest recruiting agency. They have offices in over 38 countries, hires for temporary positions in 12 areas, including contact centers, engineering, human resources, legal, marketing, and non-clinical healthcare. We selected Randstad as the top overall agency based on its size and market share, candidate quality, breadth of industries handled, and reputation.

When Randstad sends temps on assignment, the agency checks in once a week to monitor their progress and ensures they are satisfied with their duties. As a result, clients benefit from better production and more engaged personnel. Randstad’s temps have been praised by previous and present clients for their eagerness, friendliness, and professionalism.

Randstad, in addition to sourcing quality temporary applicants, offers pre-employment screenings such as background checks and drug testing when requested by employers, although these services are not free. Because the ultimate cost of service is tailored to each company’s needs, you’ll need to contact your local Randstad office for pricing. Employers are often charged 20% or more of what they pay temporary employees. In the United States, Randstad has approximately 500 office sites.

#2. Kelly Staffing

Kelly Staffing was established in 1946 in Detroit, Michigan, to meet the burgeoning temporary job market during the postwar economic boom. William Kelly, the company’s namesake, is widely regarded as the father of the contemporary temporary employment sector. Kelly Staffing is one of the world’s most notable temp agency, serving clients and job seekers in all 50 states more than 70 years later. While Kelly Staffing is unquestionably the market leader in staffing, it has a smaller recruitment staff and candidate database than Randstad, putting it at a slight disadvantage.

Kelly Staffing fills unfilled positions in the education (K-12 and higher education), finance, marketing, manufacturing, office administration, clinical science, and engineering sectors. Kelly’s candidates have access to thousands of training tools to help them improve their skills. To work with Kelly Staffing, you must first fill out an interest form on their website so that they can provide you with a price quote. Costs vary depending on the sector and the amount of compensation.

#3. Adecco

Adecco is the world’s second-largest staffing agency, trailing only Randstad. The agency was formed in Switzerland in 1957 as Adia and changed its name to Adecco after a merger with another agency, Ecco, in 1996.

Adecco, which will soon be based in Atlanta, Georgia, currently recruits in 450 locations across 60 nations. Adecco placed 3.5 million people in positions in the creative, financial, hospitality, manufacturing, retail, and transportation industries, according to their 2020 annual report. We chose Adecco as the best for fast placement since it consistently obtains client testimonials attesting to its ability to fill available positions in a matter of hours.

Clients benefit from Adecco’s extensive applicant network and recruiting personnel, which allows for a short response time. Before being provided to the customer, all Adecco personnel is pre-screened and interviewed. Adecco also assesses candidates on specific abilities, conducts background and reference checks via E-Verify, and administers drug tests at the request of the client. Final pricing is determined by the number of candidates required and rises if you plan to hire in different locations.

#4. AMN Healthcare

AMN Healthcare, which was started in 1985, is now the largest healthcare staffing organization in the United States. The company is based in San Diego, California. Across all 50 states, AMN Healthcare provides temporary staffing for travel nurses, physicians, and allied health, urgent care, and retail clinic personnel. AMN Healthcare is our top choice for healthcare staffing due to the high quality of its talent, commitment to excellence, and excellent client feedback.

AMN Healthcare staffs some of the country’s most prestigious hospitals and medical centers, including NYU Medical Center. At no additional expense to the client, candidates are extensively pre-screened through skillset evaluations, reference checks, and background checks. AMN’s exceptional candidates and recruiting experience have been lauded by clients. One client estimated that the agency saved them more than $200,000. Contact the agency directly for a free personalized quote.

#5. Aquent

In 1985, Harvard alumni launched Aquent, which later became MacTemps, an agency focusing on creative talent familiar with the Mac Operating System. Today, the Boston-based agency finds talent for Fortune 500 companies such as Apple, Disney, and Levi’s in key U.S. cities and eight countries. Aquent hires across 17 industries, including advertising, beauty, fashion, finance, healthcare, publishing, technology, and hospitality.

Because of its vast U.S. and global reach, impressive client roster, innovative client services, and guarantees, and exceptional creative talent, Aquent stood out as the top pick.

To make it easier and faster for clients to locate excellent candidates, Aquent employs a patented blend of technology and assessments from industry experts. Each candidate in Aquent’s database has a profile that includes expert input as well as standardized technical skill assessment results (all Aquent candidates take skill assessment exams). Clients can browse candidate profiles to locate the finest talent for their needs.

Aquent also offers a different service known as Aquent’s Book. Clients can enter search terms (much like a Google search) and the Book will return candidate profiles that match the query. If you are dissatisfied with the talent provided by Aquent for any reason, the agency will reimburse 110 percent of your fees paid.

Aquent’s talent has gone on to work on some of the most high-profile projects in the world. Aquent talent, for example, helped A Place for Mom become an SEO content powerhouse and Tatcha become a best-selling skincare business. Aquent ensures that their talent remains sharp by offering free online courses through their Gymnasium program. Contact the agency directly for a bespoke estimate.

#6. TEKsystems

TEKsystems, headquartered in Hanover, Maryland, was created in the mid-1990s as the Allegis Group’s Data Services division (which also owns Aerotek, another tech staffing firm). Today TEKsystems has over 100 offices across the world and staffs technical roles for over 6,000 clients in financial services, communications, healthcare, and government. We chose TEKsystems as the best choice for tech and IT staffing because of its enormous domestic and global presence, commitment to understanding clients inside and out, and good ratings. TEKsystems was recently named Best of Staffing in Client Satisfaction by ClearlyRated.

Every year, TEKsystems successfully puts over 80,000 job seekers in specialist fields such as artificial intelligence, digital risk and compliance, and healthcare IT. To do this, TEKsystems takes the time to get to know each firm with which it collaborates (their energy, beliefs, and goals) in order to better understand how to acquire personnel who will be a cultural fit. Their recruiting team also has in-depth knowledge and expertise in over 400 local job marketplaces and keeps track of 81% of the domestic IT workforce—all so you don’t have to. Clients express their appreciation for TEKsystems’ consultative approach and the agency’s consistent delivery of outstanding talent across a wide range of roles in their reviews. Custom pricing quotations are available upon request.

Temp Agency FAQ’s

Why you shouldn't work for temp agency?

Temp workers are unlikely to be as familiar with your firm or operations as long-term employees, making them far more prone to make mistakes. A potentially high turn-over means that the position must be re-learned each time it is filled by a new temp, increasing the likelihood of errors.

Do temp jobs look bad on resume?

Temp work do not appear bad on a resume if you can create a compelling tale about how you benefited from the experience. While some experts may advise you to pursue full-time positions on your career path instead, there is an excellent opportunity to gain temporary work experience.

Why do employers prefer temporary workers?

Temporary workers contribute to lower total staffing costs because their presence allows your permanent employees to be completely productive while not being overworked. The capacity to “test” potential new hires.

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  1. Zur Zeit sehe ich viele Bewerbungsangebote für Zeitarbeit. Als Student finde ich das nicht schlecht, allerdings kenne ich mich mit dem Konzept nicht sonderlich gut aus. Interessant, dass die Auftraggeber nicht befugt sind, dem Arbeitnehmer direkt zu kündigen.

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