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In a Bind for Help? Don’t Overlook Temp Agencies

Business is booming and you’re approaching your busiest time of year; things couldn’t look better. Then you get a phone call from your most trusted and reliable employee; she tells you that she needs to leave town for two months to care for her mother in Florida, whose fallen and broken her hip. And your part-time stock clerk has been grounded by his parents because his grades slipped. Suddenly your golden scenario has turned very ugly. You don’t have the time nor the resources to begin searching, interviewing and checking references for replacement help.

Help Wated Sign

What is a Temp Agency?

Temp or staffing agencies specialize in finding work for people on a long-term or short-term basis. A temp agency maintains a roster of potential workers to send to a business when that business needs someone to work for a short period of time. Typically these staffers are used to fill in for a missing employee or to help cover an unusually heavy workload, such as during the holiday season.

Temporary employees can work for a couple days, a few weeks or even months, depending on the situation. When left in the lurch by an employee, a temporary employee can give you time to search for the perfect employee with the specific skills and qualities that you need.

Some temps can fit the position so well that you might want to hire them permanently; most temporary agencies will have a provision for this in their contract.

Why Should You Consider Using Temp Agencies?

Reasons for using a temp agencyThere are a number of reasons why you might want to use a temp hire. The most obvious reasons are to cover absences of existing staff caused vacation, illness, family leave (FMLA), injury or termination. Seasonal or other increases in business volume offer another opportunity to use temps. Sometimes it’s difficult to fill certain hours, or a limited number of hours with regular staff; this is where temp agencies excel.

You’ll also have a chance to ‘test drive’ the employee. Some temps are great workers and a perfect fit for your business. You can keep them on as temps, or hire them as permanent employees of your own. You’ll have to pay the agency a fee for this, sort of a finder’s or placement fee for getting you the employee, but if it’s the right employee it’s worth it.

Some temps do not work out; in this case, you notify the agency and that ends that particular temps association with your business. Bonus: unemployment claims, paperwork and charges are not your responsibility but the agency’s.

There is a very big savings advantage in payroll expense when using a temp agency. Although you will pay more than the standard hourly rate for a temporary employee, you are not responsible for paying FICA, vacation, retirement or other benefits, and the responsibility for unemployment claims and all employee tax and payroll paperwork belongs to the agency. This is a huge savings in time and money and needs to be considered in your decision process.

What Does A Temp Agency Do?

As mentioned above, the agency keeps a full roster of potential employees.  You specify the skills needed and the agency will save you time, energy and money. They screen, interview, check references, check for convictions and schedule drug tests (when appropriate) for potential employees. All employee paperwork, reporting and liability for FICA and tax withholding and unemployment claims are the agency’s responsibility.

Temp agencies not only perform many of the duties of a company’s human resources department, but may be able to do so them efficiently and have access to a wider pool of applicants. Employees of staffing agencies generally have a higher level of expertise related to job knowledge, employment trends and recruitment practices because they are continually placing employees. They can also have specific industry expertise if they work for staffing agencies that specialize in certain fields, such health care providers.

Temp agencies have large networks of available workers. They may have relationships with workers already identified as dependable, reliable and conscientious and who can fill a vacancy in a matter of days, or even hours. The network that staffing agencies maintain is a broad one from which they can tap potential employees who can fill any position an employer might have or anticipate.

Staffing agencies offer their employees excellent networking opportunities, flexible work options, different jobs and opportunities, skill training and an opportunity to move from temp to perm employment. Some temp agencies even offer limited benefits to their workers.

Are There Negatives When Using Temps?

There are negatives to working with a temp agency. Temps require training; each new temp requires new training. Occasionally there are morale issues with the permanent staff, with an ‘us-and-them’ attitude showing itself.  There may be a safety concern in some situations; never assume a temporary worker is fully prepared to work unsupervised, until you have taken the time to see that they can safely perform their work tasks.  Legally, you must be careful how you contract for temporary staff.  There must be no doubt about the workers’ status and about the lack of eligibility for the benefits of permanent employees.  And you should always treat your temp workers with the same respect and care you have for your permanent staff.

From the temp employee’s standpoint there are also negatives. Temp jobs usually don’t last, and there may be a reluctance to hire them permanently; and there is a lack of consistency in the amount and type of work. Temp jobs typically pay less than their permanent counterparts and provide little or no benefits. Temps have to report to two bosses – the boss on the job site and the agency staffer who placed them. They may be viewed by permanent staff as outsiders or ‘TEMPS”.

Temp Employees Offer a Real Alternative

Businesses will only hire a worker if the value of that worker’s output exceeds the cost of his wages and benefits. Temporary employees can be less expensive because businesses do not have to pay benefits to temps, deduct payroll and income taxes from their checks, or incur the costs of recruiting and screening the workers. The staffing agency handles this, reducing the business’s administrative and benefits costs as compared to hiring permanent employees.

Reducing payroll expense can have a major impact on your bottom line. The cost of benefits to employees has grown faster than wages and salaries since 2004. In 2010 the average total compensation of a full-time worker was $10 an hour, in addition to hourly wages.

Cost of Hiring a Temp

“Flexible work models – which include temporary, part-time, full-time and virtual workers – remain the best option for an economy beset by wildly fluctuating demand,” said Jeffrey A. Joerres, ManpowerGroup Chairman and CEO. “U.S. employers face extreme uncertainty from what’s happening in the Euro Area and with the U.S. general election two months away, yet demand exists and employers continue to need the right workers at the right time to meet that demand.”

“A flexible work model that enables companies to react quickly to demand and that aligns with companies’ business strategies is essential for winning in today’s volatile economy,”

Joerres added. “In turn, individuals benefit from flexible work options, as they gain on-the-job training and experience – while earning income.”

According to US News & World Report the temporary workforce has been growing since the end of the recession in June 2009 and may be the new normal. Roughly one in every 50 employed Americans held a temporary, or contingent position, as of the end of October 2011. The temporary help services industry, comprised of staffing companies and temporary agencies, added 557,000 jobs, or 54 percent of all jobs created across all sectors of the economy, according to the Bureau of Labor Statistics. (



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