How Does A Staffing Agency Make Money

Staffing agencies, also known as employment agencies or recruitment agencies, match job seekers with employers needing temporary or permanent employees. A Staffing agency make money by charging employers a fee for their services, including recruiting, screening, and placing job candidates. In this blog post, we’ll take a closer look at how staffing agencies make money and the various revenue streams they may have.

Fees Charged to Employers

The primary way staffing agencies make money is by charging employers a fee for their services. These fees can take several forms, including a one-time placement fee, a retainer fee, or a percentage of the employee’s salary.

A one-time placement fee is a charge the employer pays the agency when a job candidate is placed in a position. This fee is typically flat and can range from a few hundred to several thousand dollars, depending on the job and the agency.

A retainer fee is a regular charge that the employer pays to the agency, such as weekly or monthly. This fee is typically used when the employer needs many employees on an ongoing basis.

A percentage of the employee’s salary is a charge that the employer pays to the agency as a percentage of the employee’s salary. Depending on the job and the agency, this fee can range from a few percent to as much as 30 per cent.

Employer Billing

Employers are typically billed weekly or bi-weekly, and the agency will invoice the employer for hours worked by the temporary employee. This is the most common form of billing in the staffing industry.

Temp-to-perm Placement

Another way staffing agencies make money is through temp-to-perm placements. These are situations where an employer hires a temporary employee with the option to make the position permanent after a certain period. Staffing agencies often charge a higher fee for temp-to-perm placements than traditional temporary assignments, as they assume more risk with this type of placement.

Benefit Packages

Many staffing agencies also offer benefits packages to their temporary employees. These packages include health insurance, retirement plans, and paid time off. Staffing agencies make money by charging employees a fee for these benefits or by having the cost of advantages in the hourly rate they charge to employers.

Conclusion

In conclusion, staffing agencies make money by charging employers a fee, including recruiting, screening, and placing job candidates. These fees can take several forms, including a one-time placement fee, a retainer fee, or a percentage of the employee’s salary. Staffing agencies also make money through temp-to-perm placements, employer billing and benefits packages. The fees and commissions that staffing agencies charge vary based on the industry, the job and the agency. However, staffing agencies play a vital role in the job market by matching the right candidate with the right employer, which benefits both parties.