Finding a potential worker a job, what's in it for the staffing agency?

In My Humble Opinion
1

I know what staffing agencies for in a broad sense. They look at a potential workers’ skills, education, and experience and match them up with employers that have certain needs.

I see how employers benefit from using staffing agencies, but I don’t see how staffing agencies benefit from employees finding jobs. Furthermore, I’m interested in the context when the staffing center is associated with a college or educational institution.

Does the company pay the institution or agency money whenever they hire someone? That’s what I’m assuming. If this is the case, what are some potential risks that agencies need to look for when they are matching people and companies?

2

Edit: Totally misread this - are you asking about temporary job agencies, or “headhunters,” which look for permanent jobs for workers? Temp agencies get a cut of the worker’s wages, while I’m pretty sure “headhunters” get a flat fee, which might be based on the salary of the job in question. I suspect some agencies may work out a payment-over-time situation to ensure that the picked worker stays around for a while. (Good worker = more of a fee, fired worker after 3 months = barely anything.)

3

Staffing agencies typically get paid by the company that hires the employee. The firms are either hired on a retainer basis by a hiring company or they may submit candidates unsolicited.

4

Ok, I thought it went something like this.

Yes, I’m talking about full time placement, not temporary.

Still, there seems to be more to this…to me. It’s not as easy as telling a company “hey I know you’re looking for a candidate X qualities and skills, well, here’s one for you!”, right?

What are some issues that can come up on the staffing side? An example, I heard that some firms have quotas. What can cause an employee at a staffing agency to fail at meeting a quota? What could be the staffer’s role in the failure? The firm’s role? The role of the candidates? The role of the companies?

5

If an employer hires a temp they normally pay up to 150% of the wage offered to the temp.

So let’s say a temp gets minimum wage (In Illinois it’s currently $8.25). In this case the company using the temp pays anywhere up to $12.38/hr. Of this the temp would get $8.25 and the agency gets $4.13.

Of course it’s “up to”

Usually when I’ve worked for companies and we used temps we’d pay about 120% of the offered wage to the temp agency. So a $10/hr temp would cost us $12/hr

If we wanted to actually HIRE that temp as a permanent employee it would cost us. It varies from agency to agency. Some agencies use a percentage of the salary per year offered. Others have flat fees.

For instance they may get “up to” 20% of the yearly salary. In my experience with this type 10% was more common.

So if we hired one of the temps as perm, we’d pay the agency a fee. In one case we paid the employee $25,000/year so we paid the agency $2,500 for that employee.

I’ve also worked where we had flat rates and those are always, in my experience, at least $1,000

As you can see it’s not often worthwhile for a company to fork over such fees.

So the temps don’t get hired to permanent or else the company will hire them “under the table,” or wait the period out. Usually there is a six to 12 month waiting period, which means this:

Let’s say you use a temp and his assignment ends July 31st. That means if the company hires the temp any time with the next six months or year (depending on the agency) the fee will be owed.

So sometimes the company will wait till after that period is over to hire someone.

Temping use to be pretty good, but it isn’t what it used to be (looking at the temp’s viewpoint) just because of the lack of employment. So the employer is holding the cards now-a-days. Didn’t used to be like that.

I recall in the 90s, I was the overnight manager in a hotel. I would tell H/R I NEED someone. She’d say "We’re looking, we’ve put ads in the paper, called agencies NO ONE WANTS THE JOB. :smiley: Kind of hard to imagine, with today’s economy but in the mid 90s, it was common