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What Are Temp Agencies and Should Your Business Work with One?

If your organization has short-term or seasonal employment needs, a temp or staffing agency may be a simple, effective solution for temporarily staffing up your workforce. HR temp agencies create many advantages for both companies and candidates interested in limited-time positions.

What is a temp agency or staffing agency?

Temporary (temp) or staffing companies provide employees with temporary positions at a client organization. The temp agency is responsible for recruiting, assessing, and hiring employees who are then temporarily placed with client organizations that require their skills or experience. Temp agencies charge their clients for their services and pay temporary workers directly.  

How do HR temp agencies benefit companies?

HR temp agencies help companies optimize their workforce by enabling a portion of the workforce to stay flexible in size and skills. They handle the recruiting and hiring function so that clients can access this on-demand workforce with little time or effort required. Organizations often rely on temp agencies to provide extra hands during a busy season and provide temporary workers with specialized skill sets.  

Four of the main reasons companies work with temp agencies are:

  • Fast access to a large talent pool – temp agencies have hundreds or thousands of temp employees ready to get to work as fast as the next day.  
  • Fast access to hard-to-find skills – some staffing agencies specialize in specific industries and have a deep bench of temporary employees with highly sought-after skills. Some of the largest and most well-known staffing agencies specialize in engineering, science, tech, finance, and healthcare.
  • Automation in hiring – many temp agencies use hiring automation to identify competencies and bring employees on board quickly. Some companies that don’t hire frequently may not have access to this all-in-one hiring technology, engaging candidates via text, video, and predictive pre-employment assessments. Temp agency interview questions are the same or similar as client organizations would ask themselves. With this tech, temp agencies are poised to build and deliver a temporary workforce quickly, often much faster and more effectively than the client organization.
  • Temp-to-perm hiring option – many companies rely on their staffing agency to recruit and provide temporary workers who may be interested in a permanent position. The staffing agency takes care of recruiting, initial hiring, and the client company can see the temp employee in action before deciding to extend a permanent job offer. The company also has the flexibility to end the assignment without an offer. The temp-to-perm option reduces the risk of making a poor hire.

How do temp agencies benefit candidates?

Flexibility and the opportunity to work in various placements are top reasons people choose to work for temp agencies. About two-thirds (64%) of people use temporary work to earn while they are job hunting or finding a permanent position.

What types of positions can temp agencies fill?

They fill positions at all levels across all sectors of industry. According to the American Staffing Association, 36% of temp workers are in industrial roles, 24% work in clerical and office administration positions, and 21% fill professional and managerial jobs. A high percentage (40%) work in higher-skilled occupations.

How did the global pandemic impact temp agencies?

In the pre-pandemic labor market, temp agencies were essential for companies in attracting and hiring qualified employees to supplement their workforces and meet customer demand when unemployment reached record lows. However, temp agencies saw a decrease in demand due to the COVID-19 pandemic as many clients froze hiring or needed to reduce workforce size. In 2020, temporary staffing in the U.S. saw an 18% revenue decline from a high of $130.7 billion in 2019.

It is projected to rebound in 2021 as organizations need assistance in efficiently evaluating candidate-rich talent pools and as they pursue strategies that will give them greater flexibility in adapting to rapid change.

How can my company work with a staffing or temp agency?

Temp agencies range from small and local or specialized companies to global organizations with temp workforces available worldwide. The way your organization works with a temp agency will depend in part on the types of positions you need to fill and the volume of temp workers you need. You may leverage a partnership with a temp agency for a few temp or temp-to-permanent employees here and there. In other cases, companies partner with staffing agencies to handle their entire recruiting function, known as recruitment process outsourcing (RPO). 

Top RPO providers utilize automation technology to engage and screen applicants and automate workflows so they can recruit and place qualified temp and temp-to-perm workers faster and more efficiently than their client organizations could. Staffing agencies that use an all-in-one platform can share applicants’ profiles with clients to improve collaboration and client satisfaction.