Staffing Agencies: The Straight Story
Source: BrantHR Staff
Temporary staffing is the concept of hiring associates on a short-term basis to meet the immediate needs of the company. This could be as short as one day, or as long as necessary during an extended absence of a permanent employee. In the past, this was simply a make shift tool used during critical times of staffing needs. Now, companies can use temporary or flexible staffing to meet very specific skilled openings within their organization. As organizations grow or shrink, their workforce is required to do the same. By closely monitoring staff size and costs, temporary staffing has shifted to become a value added tool for hiring managers.
Where do temporary employees come from?
- Traditional Temporary Workers: students, teachers, retirees, parents of young children and others choose temporary work because they are either unable or unwilling to make a permanent commitment to a single employer. These individuals make up approximately 20% of temporary employees.
- Transitional Workers: individuals looking for their first job after graduation, reentering the labour force after an absence or lay-off, transitioning from welfare to work, or simply quitting their current job with the expectation of finding a better one. Transitional workers make up approximately 65% of all temporary employees using an agency as a bridge to new experiences, and to showcase their skills to potential new employers.
- Long Term Workers: individuals that generally tend to be better educated and higher paid, they prefer the flexibility and independence that longer-term assignments afford. These people generally have a more entrepreneurial attitude toward their employment, and are able to adjust to changing workforce needs. These workers make up approximately 5% of staffing agency associates.
What are the options for the organization?
- Temporary: On the spot fill in for a day or longer, generally short-term staffing requirements for increased business orders during peak times. Longer term fill for maternity or sick leave of permanent employee.
- Temporary to Permanent: Temporary position that will become permanent as the needs and skills of the worker are reviewed.
- Permanent Placement: Direct hire employee. Interviews and testing are conducted by the agency to determine suitability. Final interviews conducted by your company. Final acceptance of candidate and start date confirmed by your company.
How does an agency find employees for your business?
While every agency is different, their basic hiring practices are similar. The agency promotes the vacancy(s) through formal and informal methods
- Interested candidates register with the agency
- Candidates visit the agency office for interview, testing and identification submission, signing of policies and procedures
- The agency will provide orientation to the Occupational Health And Safety Act including right to refuse unsafe work along with WHMIS education
- A formal job interview is conducted along with any job specific testing required.
- If the associate has met all requirements and a position is available they leave the office with employment.
How do you choose a staffing agency?
Most managers are pressed for time, and it does not cost anything to take a look at what a staffing agency can do for your company. A great deal of time and effort is put into recruitment and selection and sometimes the help of an outside source is required to narrow the field. A successful staffing agency can help you save time by reviewing applicants, and narrowing the choice of experienced applicants for your final interview process. Choosing an agency is also a matter of the chemistry developed with the recruiter or sales person knocking at the door. If you have had calls and feel comfortable with the recruiter with whom you have been speaking, ask them to submit a presentation. The sales person will want to bring along the recruiter that will be servicing your account.
Give them a tour of your company, the job descriptions and any other important details. The more the agency understands your business, the better they will be able to select the best candidates to meet your needs. Remember to get everything in writing. Talk to them in detail about what might be the best way to staff the vacancy for you: temporary, temporary to permanent or permanent placement service.
Placing the job order:
Give all details of job description to the recruiter, along with timeframe of when the person is needed and how long the job is expected to last. Provide details about Personal Protective Equipment or tool requirements for the job. Expect update calls on the progress of filling the position. The recruiter will call the company with the final employee confirmation: name, expected arrival time.
Follow up:
Expect a startup call from the staffing agency. This is to verify that the employee has shown up for the assignment and has come prepared. If the employee has not shown up for his/her assignment, then the agency needs to be informed immediately so that a replacement can be sent in a timely manner. The agency will have an after hours number for start times that fall outside of regular office hours. Expect a follow-up call close to the end of the workday to find out how the employee performed and to confirm for the following days requirements. If unsatisfactory, then a replacement will be necessary and this should be confirmed before the end of the business day.
What is the fee structure?
Because every agency is vying for more business, managers are able to capitalize on competing agencies. Never wanting to place all the eggs in one basket, it is beneficial for companies to have a primary supplier of labour, as well as a secondary supplier in place for times when vital labour is simply not available from one source.
Costs to your Organization vs. Costs to the Agency
While agencies charge different rates, here is an example of a General Labour Associate working in Manufacturing:
- Pay rate to the employee: $10.00/hour
- Bill rate to the company: $15.00/hour
Where does the $5.00/hour go?
- Vacation Pay
- Stat Holiday
- CPP
- E.I.
- Provincial Medical
- WSIB
- And profit to the agency
What kind of value added services does an agency bring to the table?
Agencies have time and resources that Human Resource departments may not have. Ask the staffing agency about the following:
- Implementation of an off site orientation session to better acquaint new associates with your facility before they are sent out for the first shift.
- Guarantee policy: getting it right the first time, or the employee is replaced without added cost.
- Time keeping: group time sheets delivered electronically, or punch clock installed. How will they ensure that the employees will be paid correctly?
- A three-month review of each associate on site before the direct hire takes place.
- An employee file on site, which could include WHMIS test scores, orientation sign off, and training records. This will meet requirements for a Work Well audit or Ministry of Labour inspection.
- Daily check-ins at the start of each shift by staffing agency recruiter.
- Monthly reports of cost analysis, including manpower hours.
- Temporary employee of the month program specific to your site.
Should our company begin or continue to use staffing agencies?
As the marketplace becomes increasingly competitive, managers should consider the benefits and pitfalls of flexible staffing.
Potential advantages of using a staffing agency include time savings as the hiring manager does not need to compose and place an ad, sort resumes and conduct interviews. Staffing agencies typically have almost immediate response times for urgent or unexpected staffing shortages. The associate is employed by the staffing agency which is responsible for the payroll functions. Workplace injuries involving staffing agency employees do not reflect on your WSIB rates (although you may be involved in the accident investigation). If your company is unhappy with the employee the agency sends, they will withdraw the individual from your workplace and make every effort to find a satisfactory replacement. Flexible staffing also provides you with an opportunity to evaluate an employee’s potential fit as a full time hire. Since most employers find dealing with bad employees to be one of their biggest headaches, this feature is a major selling point for many companies.
The primary disadvantage to staffing agencies is cost. In addition to the upfront cost (hourly or per hire), you may find that there are policies that require you to submit an additional fee to the agency if you want to hire one of the temporary employees directly into your company’s workforce. Turnover rates of temporary employees tend to be high and may result in repeatedly training new candidates for the same position(s). Since some job seekers do not choose to register with a staffing agency, you are not getting access to the full labour pool that may be interested in your vacancy(s). Many employers find that staffing agencies are most beneficial when labour is in short supply and the agency can do the considerable legwork involved in locating the people that you need. During an economic downturn when more qualified employees are looking for work, you may find that posting or advertising your vacancy will yield quality candidates at little or no cost. You can explore the community services listed in the Directory to discover free services that offer recruitment assistance and can help narrow the field of candidates. Employers should also be conscious of their “employer brand”. Many local job seekers have formed negative view of staffing agencies, an association which often carries over to the companies that use them extensively.
Agencies offer a variety of excellent staffing solutions that might be just what your business needs at this time. Armed with knowledge, your company can make an informed decision about whether flexible staffing through an agency might be an option to meet your workforce needs.