A staffing agency sits between companies that need people and people who need work. Knowing who pays whom clears up most of the confusion.
The Money Flow
- The company agrees a bill rate per hour with the agency.
- The agency pays the worker a pay rate per hour.
- The difference, called the markup, covers payroll taxes, workers' compensation, recruiting, overhead and profit.
Try your own numbers in the staffing markup calculator.
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Three Kinds of Placement
- Temporary: the worker stays on the agency's payroll for a set assignment.
- Temp-to-hire: the same, with the option for the company to hire the worker later.
- Direct hire: the company employs the person from day one and pays the agency a one-time fee.
Who Is Responsible for What
On temporary assignments the agency normally runs payroll, while the client directs the daily work. Both can have legal duties. For safety, OSHA says the agency and host employer share responsibility.
Staffing Agency, Recruiter or Job Center?
A staffing agency usually employs temporary workers. A recruiter finds permanent hires for a fee. A public job center is government-funded and free. See staffing agency vs recruiter.