How Do Temping Agencies Work?

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Dealing in finding suitable manpower for the short-term needs of employers, temping agencies have become a common fixture in many parts of the world. The phenomenon of temping itself has seen a remarkable rise in the past few years due to many factors. The recent pandemic has only amplified the trend with more employees joining the temporary labour market because of layoffs. This has been matched by a corresponding rise in the number of firms hiring temps in response to the current economic crisis.

Despite the proliferation of temping agencies, very little is known about how they actually operate. We will discuss it here. Temping agencies have robust systems and processes geared towards sourcing the most suitable talent for the job in the shortest possible time. Candidates supplied by them are pre-screened and pre-vetted, saving the client from dedicating precious resources to the hiring process. A relationship with a temping agency also opens access to a formidable talent pipeline which businesses can leverage each time they experience labour shortage.

Here we will take a detailed look at the practices adopted by temporary employment agencies that help them serve their clients competently. These practices have been honed over decades with the objective of delivering reliable, cost-effective services to clients to help them meet their staffing requirements in the most efficient manner.

1. Screening Candidates

Temping agencies are constantly soliciting applications from employees with a view to increasing their talent pool. They regularly promote themselves through advertisements and other means, encouraging workers to apply. However, merely applying to a temping agency doesn’t guarantee workers a job. Agencies have a robust recruitment processes where they carefully screen applicants. Candidates are evaluated on a range of parameters including skill, temperament, culture fit etc. Their career goals are also discussed. The temping agency uses this information to connect employees with employers whenever there is a requirement.

2. Signing Contracts

Following the selection process, contracts are distributed among the successful candidates formalising the arrangement with the temping agency. One of the key differences between a temping agency and a staffing agency is that a temping agency employs workers on its own payrolls, while a staffing agency recruits workers who will be employed by the client. Apart from the terms of employment the contract lays down important details like pay, benefits etc.

3. Supplying Manpower

Temping agencies are constantly in touch with their clients vis-à-vis their manpower requirements. Once a company informs the agency about their needs, the agency swings into action, dipping into its resource pool to locate suitable candidates. The process of matching employee to employer involves scrutinising all key parameters like skillset, temperament, cultural fit, past employment record, and so on.

Next, the temping agency sends a list of pre-screened employees to the client who makes the final decision in this regard. In certain cases, the client may directly hire the employee without independent vetting. However, it is always recommended that the client vet the candidate separately especially when hiring for sensitive positions. By working with pre-screened candidates, the job of engaging manpower becomes considerably easier for the client who needs to dedicate less resources to the task.

Temping agencies deal with workers at all levels across a wide spectrum of industries. At the same time, you will also find agencies that specialise in certain sectors like IT, healthcare, finance etc. where there is a need for professional skills. These agencies only serve select industries in which they possess expertise.

4. Work Arrangement & Evaluation

Because temporary workers are technically employed by the agency, the client does not need to enter their names on its payrolls saving them from compliance issues. The salary and benefits are paid by the agency and not the temporary employer. The client pays a lumpsum to the agency as remittance for all the temps deputed with the company. The agency deducts its commission and pays the employees at the pre-agreed rates.

Agencies generally charge a mark-up of anything between 50% and 100% over the wage payable to the employee. This may seem steep, but it is important to remember that a part of it goes towards providing employee benefits while the rest helps pay for expenses like staff salaries, infrastructure, software license etc. Nothing is charged from the employee.

In the event of any problem with the employee, clients should contact the agency directly which will help resolve the issue. At the end of the stint, you will be asked to rate the temp which will influence their career prospects.

Earning the Client’s Trust

Certain agencies offer a temp-to-hire arrangement involving the supply of workers with an eye on permanent hiring. This model is often preferred by companies that require additional manpower, but are unsure about whether they can afford it or not.

It is in the interest of the temping agency to supply good quality workers to clients to earn the trust of the company. The best temping agencies understand the exact requirements of their clients while possessing the ability to supply top talent reliably in the shortest possible time.

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