Secrets for getting the most from your staffing agency

By Aaron Green, 06/16/08

Keeping in mind that companies use staffing firms in very different ways to staff a variety of positions, I'll do my best to respond to this question in a way that hopefully will be valuable to most readers. For more information, see my previous article Staffing firms: an overview of services offered.

Start by using the right firm

While there is no shortage of staffing firms, you will need to put in some time in to find one that is appropriate for your needs. If you have a specialized need or require staff to have experience in your industry niche, you want to work with an agency with the right candidate base for you. Even if your needs don't require unique experience or industry knowledge, you will obviously want to work with a quality firm.

So how do you find the right agency? Referrals remain the best way to find a staffing partner that is right for you. Ask others in your industry or people you know in other companies that have staffing needs similar to your own. Ask your current employees which firms they have had previous experience working with either as a client or as a candidate. If all that fails, ask the American Staffing Association (ASA), the industry trade organization; while the ASA won't recommend a specific firm, they will be able to provide you a list of local member firms segmented by skill type.

Understand pricing and markup

Markup is a term commonly used in connection with temporary staffing — markup represents the percentage over the candidate's pay rate that the agency charges. For instance, if a candidate is paid $10 per hour and the agency's markup is 50 percent, then the client will be charged $15 per hour. The markup pays for payroll taxes, benefits and statutory costs for the temporary employee plus the agency's costs for recruiting and running the business, and the dollars left over are the agency's profit.

As a way to control costs some clients look to enter into an agreement with a staffing firm where the markup is defined. The client's thinking is that they want to limit the profit that goes to the agency and get the best price. Ironically many times a markup type of price arrangement can result in higher prices for the client. Here is why: markup pricing allows agencies to be lazy in regard to finding talent at market pay rates since the agency can simply pass the extra cost along to the client. In fact, the more the agency pays the temporary employee, the more the agency makes. At the end of the day the price that should matter to a company using temporary staff is the bill rate per hour that is charged; the bill rate is the true cost.

Give a thorough job order

To start off on the right foot, it is important to communicate your needs as thoroughly as possible. Find out as much as you can about the work that needs to be done and the type of employee best suited to the task. Check in with the project's supervisor and/or appropriate managers and ask questions: How urgent is the need and how soon is a temp required? How long will the assignment last? How long is the workday? Is more than one temp needed? What skills are required? What skills aren't required but would be nice to have?

To ensure you get a temp who is a good fit for your need, try to be as specific as possible. Rather than telling your contact at the staffing agency that you need someone for administrative work, try to spell out the specific type of administrative work the employee will be doing, e.g., answering phones, taking transcription, conducting research on the Internet.

Give it time — or not

When working with a staffing agency, there are certain situations that require speed. Getting a replacement receptionist to your office within 15 minutes to handle the phones on a busy Monday morning is one of them.

However, if you can give your agency contact a realistic time frame, you'll end up getting the best person for the job rather than the first available one.

As logical as this sounds, many employers don't heed this advice — especially when the pressure is on. Some companies will call half a dozen staffing firms with the same job order and award it to the firm who responds fastest. While this approach undoubtedly gets the job done, it is not conducive to effective long-lasting relationships and long-term satisfaction with staffing talent.

Finding an agency that provides the right level of service to meet your needs may first require trial relationships with multiple firms. Take the time to work with several firms for a trial period of three months during which time you give them six to nine job orders. At the end of these trials consider factors such as:

• Which firm consistently responded to requests the fastest? (with or without a staffing solution)
• Which firm consistently supplied the most satisfactory employees?
• Which firm was able to send employees who were already familiar with your business?

In the end, the time and effort you invest will almost surely result in a better quality, longer-lasting and more effective business partnership with your staffing provider(s).

Settling down with one partner

Many companies with a consistent and sizable need for temporary staffing decide to ink long-term contracts with one staffing agency. This makes sense for several reasons, including cost-savings, access to a pool of employees customized for your industry or business, and having one point of contact for staffing needs.

But how should you determine which agency is the one to place your proverbial eggs with? Factors to consider include:

• Do they provide the right level of service? Service, including speed and quality of staffing, is certainly one criterion, and making your selection after sampling the services of several staffing firms (as described above) is recommended.
• How well will the staffing firm accommodate you? Does the staffing firm have experience in your industry and/or experience serving businesses of your size and organization type? Will the firm maintain a dedicated temp pool for your business? Does the staffing firm show potential to accommodate your changing needs by offering personnel with skills that may be useful to you down the line or personnel in regional areas that may be of interest to you in the future?
• How does the firm treat its temporary employees? How does the firm recruit new temps? What percentage are word-of-mouth referrals? What is the firm's selection and screening process for new employees? How long do temporary employees typically stay with the firm?
• Does the firm offer benefits to attract and retain valuable employees? Also consider the benefits offered by the firm to its temporary employees as they'll be a good benchmark for the value the firm places on its employees. These benefits can include skills enhancement programs, contributions to health insurance and 401(k) programs, competitive pay, and paid holidays. Although numerous temps work for an agency on a full-time basis, not many firms offer the same benefits that other full-time employers offer. Ask your temporary agency about the benefits it offers, as this is an often overlooked -- but excellent -- indicator of the quality of temps the firm is able to attract. Is there a longevity factor for qualifying for benefits at the firm? Does the staffing firm make contributions to the temps' health insurance or 401(k) plan?

These questions will help you determine how the firm treats its employees and therefore gain a better understanding of how stable and happy their workforce is likely to be.

If used correctly staffing firms can provide significant value by providing access to the talent you need to grow your organization.