The Pros and Cons of Using a Temp Agency Blog Feature

By: Jennifer Devitt on November 16th, 2017

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The Pros and Cons of Using a Temp Agency

Business Management

With your employees going on vacation, having babies, getting sick or leaving the company, things are beginning to pile up and you aren't finishing the jobs you need. What's more, you don't have enough staff who are cross-trained to fill in the gaps.

The good news is that you're not alone in feeling buried under all your obligations. Many companies in the same situation rely on temp agencies in order to deal with the extra work, but is using a temp agency the right choice for your organization?

Read the Guide: 5 Ways to Successfully Manage Business Growth

Who Should Use Temp Agencies?

The Pros of Temp Agencies

  • Temp agencies likely have people readily available to start work immediately. You don't have to undergo a lengthy and expensive recruiting process for the position.
  • Because temp workers have already been vetted by the agency, you have a clear idea what skill set you're getting. Many agencies also do background checks depending on the position—which is supposedly at no cost to you, but which is really baked into the agency's fee.
  • If you're not happy with their work, it's a lot easier to dismiss a temp worker than it is hiring and firing an actual employee. Temp agencies are often happy to offer suggestions for other workers who can fit your needs, and perhaps also offer a refund within the first 30 to 60 days if there was a serious problem.

The Cons of Temp Agencies

  • The skill sets available at temp agencies may be smaller than what you need if you require very specific, targeted knowledge. Some temp agencies may offer to apply the refund to the next worker if you find out that it's not a good match, but if they don't have anyone else with your desired skill set, then you're out of luck.
  • Hiring temp workers is almost always more expensive than going in-house. Their hourly rates can be seriously expensive because they have to include the payroll taxes and the agency's fee on top of their regular salary. Often, this fee can be as much as 20 to 30 percent of a worker's annual pay, which will seriously cost you if you decide to use that person for a longer period of time.
  • Some temp workers enjoy the variety of working in different locations on different projects, but others aren't able to find a full-time job. Hiring a temp worker is usually more of a risk than hiring a full-time employee from another company.

When is the Right Time to Use a Temp Agency?

The best situations for using temp agencies are work that's short-term or seasonal, with a clearly defined skill set, and that needs to be done right away. For example, a lot of retail and fulfillment centers hire college students who come home for winter break during the holiday season. They do low-level work like getting cards orders to ship, and then go back to school in a few weeks, often coming back the next year.

One absolute must for using a temp agency is that your project doesn't have a steep learning curve. If new temps have to understand how to use a complex system, you won't be able to get much work out of them that's worthwhile in the near future. What's more, because one of your employees has to take time to train them, you're really down two staff members instead of one. Extensive training should be invested in full-time employees whenever possible.

Whatever your situation is, you need to understand how to evaluate temp agencies so that you find the right people to work with. For example, are their programmers being tested on the languages and tools that they claim to know, or are they simply taking their resumes at face value? Find out prospective agencies' vetting process so you can understand how their temps prove that they have the required skill set.

Consider Automation Instead

Rather than throwing people at your problems, it's a better idea to use technology to make those problems less painful and easier to work with. Process automation will be key here. If you're facing a long-term issue or concern, you may spend more money up front to build an automated solution, but you'll save money and reduce errors in the long run.

No two automation projects are the same, because they depend so heavily on how many systems you need to connect to. Particularly complicated and extensive projects that need to make outside connections to a client portal may take a few months; other projects could be done in as little as a few hours if you're working with a preexisting API. Regardless, it may not be a bad idea to have a temp in place to cover your bases while you're building the automation project.

Final Thoughts

Like their name suggests, temp agencies are definitely a temporary fix, not an option with long-term potential. If you know exactly what you're looking for, then they can be a good choice to put a bandage over your immediate pain points. Temp agencies can build you a bridge until you arrive at your long-term destination of a permanent solution to your problems. 

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