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CostHelper > Personal Finance  > Employment > Temporary Agency

Temporary Agency Cost


How Much Does a Temporary Agency Cost?

 
 average costTypical Fee: 12%-50% of Employee's Hourly Rate 
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Job seekers often apply for employment through a temporary agency, or temp agency. A temp agency is a type of employment agency that helps match qualified job candidates with short-term jobs through various employers.

Typical costs:

  • The typical fee for employers using a temp agency is 12-50% of the employee's hourly rate. For example, if an employee earns $10 per hour from the temp agency, and the agency's markup is 50%, the employer will pay an extra $5 per hour to the temp agency for a total of $15 per hour.
  • Some large organizations have in-house temporary agencies which apply similar fees for their services. For example, the University of Washington[1] charges a 29% markup, with department's paying $18.06 per hour for a temporary employee who actually earns $14 per hour.
  • According to Certified Staffing Solutions, a national firm, a temporary agency's markup percentage varies based on the skill level required in the position and the job location.
  • When a business chooses to hire a temp agency as a permanent employee, the business must pay the temp agency a permanent staffing fee ranging from 10-25% of the employee's first-year salary. For example, New Mexico's Santa Fe Staffing[2] charges employers 11-15% of an employee's annual salary as a one-time permanent staffing fee. Included with this fee, they guarantee that the client will be a good fit for the position for a full year.
What should be included:
  • A temporary agency collects resumes, screens job applicants and assesses their skills on behalf of potential employers. When an employer has an empty job, the temp agency will narrow down many resumes to the best-suited applicants and choose the best candidates, saving the employer the time and hassle association with hiring procedures.
  • The temporary agency should perform background and reference checks for all employees they intend to place with a company.
  • The temp agency also handles the temp employee's payroll, unemployment and worker's compensation insurance, and any other benefits they choose to offer.
  • Health and dental insurance may or may not be included for employees working with a temp agency. One temporary employee[3] reports rates of $38 per month offered directly through his temporary agency.
  • For job seekers, temporary agencies offer straight temporary positions (no chance of staying on full time), temp to hire positions (considered a temporary position for a certain timeline, with potential for full-time employment), and direct hire positions (no temporary period).
Shopping for a temporary agency:
  • Bankrate lists examples of various staffing agencies[4] along with their areas of expertise, such as construction, travel nursing and law.
  • Search the American Staffing Association[5] for temporary agencies by state or zip code.
  • Career Choice Guide[6] lists many of the benefits for job seekers considering a temp agency, such as finding a job quickly, the option to stay on in a permanent position, and access to job leads that are not advertised elsewhere.
  • The Better Business Bureau offers tips on hiring staff[7] through temp agencies.
  • All types of employment agencies are regulated by state governments[8] , which set limits on the placement fees that can be charged. Some states require that placement fees be clearly displayed on signs in the agency's lobby, for instance, to help protect job seekers by holding agencies accountable.
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External Resources:
  1.  www.washington.edu/admin/hr/roles/mgr/hire/utemp.html
  2.  www.santafestaffing.com/pages/pricing
  3.  answers.yahoo.com/question/index?qid=20070522104536AA1NKMx
  4.  www.bankrate.com/finance/personal-finance/8-ways-to-find-and-keep-a-temporary-job-3.aspx
  5.  www.americanstaffing.net/jobseekers/find_company.cfm
  6.  www.careerchoiceguide.com/temp-employment-agency.html
  7.  www.bbb.org/us/article/bbbtips-on-hiring-staff-621
  8.  www.bbb.org/us/article/employment-services-279
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