Interview Question: “How Do Staffing Agencies Work?”

By Indeed Editorial Team

Updated November 14, 2022

Published September 29, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

The main goal of staffing agencies is to match the right candidate to the ideal job. They save companies and potential employees time by acting as corporate middlemen. Whether you're a hiring manager interested in hiring new talent or an employee looking for a new job, these agencies have a lot to offer you. In this article, we discuss how staffing agencies work, what roles they play in the hiring process, and how they are instrumental to a successful recruitment process.

Related: Guide to the Process of Recruitment (With Tips)

What is a staffing agency?

Staffing agencies, also known as recruitment agencies or employment agencies, are responsible for recruiting new talent on behalf of companies and individuals. The process of hiring new talent may be challenging and time-consuming. Employment agencies have a significant impact on the job-search scene because they help to fill that void. Staffing agencies create a bridge between potential employees and active recruiters, helping companies hire the best employees for a particular role.

Related: How To Apply for a Job in 6 Easy Steps

How do staffing agencies work?

Employers and potential employees often ask, “How do staffing agencies work?” To answer that, staffing agencies specialize in building a network of highly skilled individuals that are often difficult to find. Their connection to great talent is one of the major reasons hiring companies seek their services. Although every staffing agency operates on unique rules peculiar to them, there are general guidelines they follow when hiring new talent on behalf of companies. These guidelines include:

1. Company-agency contact

When companies have a role they wish to fill, they contact recruitment agencies that operate in their industry. The recruiting company specifies:

  • What the open role entails

  • What the ideal employee is

  • The salary range

  • Any other information applicants need to know about the work culture and company values

Once the recruiting agency and hiring company are in agreement, the agency compiles all the information and puts out a call on various platforms, like social media and other professional sites. After that, suitable candidates apply for the job. By outsourcing their hiring process, the hiring company doesn't get overwhelmed with feedback.

2. The application process

Potential employees can apply on the website or via other channels as stipulated by the agency. Interested applicants can also meet up with recruiters to talk about their qualifications or have their skills reviewed.

The applicant signs up with the agency responsible for managing the entire hiring process. By doing this, candidates have first-hand experience with the recruitment process. They also receive real-time feedback on how to improve their chances for upcoming opportunities.

Related: Guide To Writing a Professional CV

3. Applicant interviews

The recruiters also screen the candidates that have applied. Depending on the specific role, some applicants need to attend several rounds of interviews. After conducting the interviews, the recruiter introduces the selected candidates to their prospective employers.

Related: How To Ace Your Next Job Interview

4. Contract and payment arrangement

Recruitment agencies attend to most of the paperwork related to the employment contract, making it easier for both the recruiting company and the candidates to focus on other important issues. They essentially save both parties time and energy. If the contract is temporary, the staffing agency becomes responsible for the payment. If it graduates into permanent employment, the company itself can take over.

Related: How To Negotiate Salary (With Examples)

Do employment agencies charge a fee?

Companies may incur a lot of costs when they run internal recruitment. For example, they have to pay for job-board ads, personally select suitable candidates, and bear the interview costs. As a result of the rising costs associated with hiring new staff, companies may outsource their hiring process to staffing agencies. In exchange, they pay the agency a service fee.

Candidates usually don't have to pay a fee when they employ the services of a staffing agency. The agency might make minor deductions on the employee's salary, but these are often small amounts that don't drastically affect the quality of the employee's earnings.

How much do staffing agencies charge?

Staffing agencies charge hiring companies in different ways when they make use of their services. The type of charge depends on the unique contract agreed to by both companies. They may charge based on the following:

Work conditions

Depending on conditions, such as the job description or location, the recruiting agency can charge a specific percentage of the employee's salary. For example, if the staffing agency gets an employee who earns $15 per hour, the agency can charge a 50% fee rate. That means the employers would have to pay the agency $22.50 per hour. The employee receives $15 while the agency earns $7.50.

Unique bargains

These agencies might also charge an additional fee if they fill the position. If the job is not permanent, the agency removes the charges at intervals. If it's a permanent position, there is a one-time deduction.

Temporary fillings

The contract may also be for a temporary position or short-term work. In this case, both companies would have to negotiate a contract buyout. This arrangement may still offer employees the option to transition into full-time employment.

Related: What Are Contract Jobs? With Tips, Challenges, and Benefits

How can potential employees benefit from employment agencies?

Employers and employees have a lot to benefit from employment agencies. They make the recruiting process faster and more enjoyable for both parties. Searching for a new job can be a long process. By using the services of a recruitment agency, potential employees could cut their job hunt time by more than half.

Tips for working with an employment agency

There are certain helpful tips to consider when working with an employment agency. Staffing agencies are in constant communication with companies looking to hire new talent. This network means that potential employees do not have to job hunt themselves. They only have to state their interests, and the agency matches them with a great offer. Consider these tips to have the best experience possible:

Reach out to an agency in your preferred industry

Staffing agencies may specialize in a particular niche. The first step is to look for an agency with connections to companies in your industry of interest. The recruiter also needs to be capable of evaluating your skills. A great staffing agency can link you up with potential employers and even take the time to walk you through the entire recruitment process.

Always be professional

Although staffing agencies are middlemen to hiring companies, they are still responsible for getting interested applicants into these companies. As a potential employee, you must relate with the recruiter, in the same manner, you would approach a company. They play a huge role in deciding if you are a good fit for the company. When you make a good impression, you increase your chances of getting selected for the role.

Recruitment agencies also offer a great way for candidates to practice for the final interview. After interacting with recruiters, the candidate can ask them for feedback on how to improve their chances in the future.

Decide on your interests

As a potential employee, knowing your interests would help you decide what company is suitable for you. Staffing agencies exist to link you to offers that align with your personal needs. For instance, you can speak to them about:

  • What kind of company you think would be ideal for you

  • What your salary expectations are

  • Any personal history that might affect your work

  • What locations you prefer

  • Any other concerns you might have

Be honest

Calmly explain your unique circumstance to the agency. When agencies have access to additional information, they can pick opportunities that suit them the most. They can also offer job advice to you depending on your situation.

Constant upskilling

Take advantage of any opportunity to upskill. The workspace is constantly evolving. Companies are looking out for exceptional individuals that can contribute to the growth of their teams. Recruitment firms often offer training workshops that can be useful to your professional goals. Upskilling increases your chances of landing exciting roles.

Diversify your options

There are other ways you can improve your chances of getting great jobs apart from staffing agencies. When you use other job search methods, be sure to let your recruiting agency know. That way, your application does not get sent to the same company multiple times.

Remain open-minded

It is often a great idea to be flexible with your ideal type of employment. You may be looking for a full-time, permanent position, but remain open-minded about other opportunities the agency may have for you. Temporary jobs may lead to permanent positions, and they are a great way to gain experience.

Related: Headhunting vs. Recruiting: How Are They Different?

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