How Does an Employment Agency Work?

Male professional looking at a resume and group of professionals in different occupations

If you’re in the market for a new job or you’re seeking the right person to join your company, you’re probably interested in exploring all available staffing options. One beneficial option is to work with an employment agency, also called a staffing agency. 

What is a staffing agency, exactly? How does an employment agency work? We’ll break these answers down in simple terms to help you decide if working with one is the right fit for you and/or your company. 

What is a Staffing Agency?

A staffing agency can go by many names. It’s sometimes called an employment agency, job agency or recruiting firm, but essentially, the function of these are one in the same. A staffing agency helps connect job seekers with hiring managers who have a need for their skills. On the flip side, the agency works to connect employers with candidates who meet their needs and who would excel in one of their open roles.

Staffing agencies exist for every industry under the sun, with most firms specializing in one or more niches, like placing technology candidates or finding C-suite executives. Other firms specialize in serving a certain geographical area. 

It’s important to know that not every staffing firm is a good fit for every candidate or company, even if you’re in the same area. Finding the right staffing agency is like finding the right job; it can take a few tries, but before you decide to work together you want to make sure it’s a good fit.  

What a Staffing Agency Does For a Candidate

1. Helps match you for skills AND culture fit

During your initial onboarding session with a staffing agency, your recruiter will ask a lot of questions. This is to get a sense of you as a person beyond what is on your resume. Their ultimate goal is to match you with a job that will not only use your skills, but one that you’ll be happy with as well. 

2. Strengthens your chances of landing the job

A staffing agency might help you strengthen your candidacy by polishing your resume. They can also help you prepare for interviews by giving you a deeper sense of what the company is looking for in a candidate. Since they have had direct conversations with the internal hiring team, they’re likely to have insights that aren’t available on the public-facing job listing.

3. Gives you access to more jobs

An employment agency is often in the know about jobs that aren’t yet listed publicly (or some that may never be listed). If a company is looking to hire fast or for a very specific position, they might go straight to a recruiter without ever posting the job online. When you work with a staffing agency, you’ll be privy to these opportunities.

4. Helps you negotiate

When you’re in the advanced stages of interviewing with an employer, your recruiter may help with negotiation and be the go-between for conversations on things like salary. Since the recruiter stays on top of industry norms and market trends, they can be instrumental in ensuring you secure a fair offer. Sometimes, a recruiter will even take care of all the new hire paperwork on your behalf so all you have to do on your first day of work is show.

What Staffing Agencies Do For Employers 

1. Create stronger job descriptions

For employers, a staffing agency can help write a job description that will attract the best candidates and show up in search results—which isn’t always the case if you’re copying and pasting canned job descriptions. You want a job description that conveys the necessities of the job and sells the candidate on your company. Since a recruiter specializes in a certain industry or type of job, they speak the same language as candidates and know which skills and selling points are most important to communicate. 

2. Source candidates faster

Working with a staffing agency can be a great solution if you need to hire fast. Rather than starting from scratch, they have an established pipeline of candidates as well as long standing relationships they can leverage to help deliver talent quickly.  

3. Ask the right questions

If you’re hiring for a position that’s outside your area of expertise, like an IT director or a medical coder, knowing what to ask in the interview can be a challenge. If you fail to get into technical specifics, you might wind up with someone whois underqualified. If you try to cover topics you’re not well-versed in, you risk alienating the candidate. A recruiter that specializes in your industry or type of role can drill down to the skills and qualifications that matter and identify whether a given candidate will be able to do the job sufficiently. 

4. Connect you with passive candidates

Passive candidates are those who are not actively looking for a new job; however, they’re often high performers who are excelling in their current role. This keeps them from needing to look for a job elsewhere. These are the kinds of people you want on your team. The catch is that they’re hard to reach if they’re not searching for open roles or filling out job applications. Part of a recruiter’s job is to maintain relationships with these types of candidates so they can put an opportunity in front of them.  

Now that you understand the main benefits of working with an employment agency for employers and candidates, you’re probably wondering, how does it work, exactly? How much does it cost and how much say does the recruiter have in the hiring process? We’ll cover these topics next.

How Does An Employment Agency Work?

A candidate doesn’t pay to work with an employment agency. Rather, an employer pays the agency for their efforts. There are many different models for how staffing agencies get paid, but in the most common scenario, they earn a percentage of the candidate’s first-year salary. In this case, the agency only makes money if their candidate is hired, so it’s in their best interest to locate the best possible candidate for the job.

For hourly employees, it’s typical for the employee to be hired and paid by the staffing agency, who is then paid an hourly rate by the employer. In some cases, like for large companies that do a high volume of hiring on a regular basis, the employment agency may be paid a retainer to consistently source and deliver a steady stream of talent. 

Why would an employer pay to work with a staffing agency? Well, it often saves the company money in the long run, both by lowering the upfront cost of hiring and freeing up resources that produce revenue. 

The average cost-per-hire for a regular employee is $4,425. For executives, that number jumps to nearly $15,000. Every additional day spent on the search costs money in the form of staff labor, recruitment marketing, and so on. Outsourcing this job to a staffing agency that is paid a one-time fee upon hire gives you a controlled, direct cost for every position rather than running up an ongoing tab. 

The other side of the coin is that hiring activities aren’t immediately tied to revenue. Small business owners, for example, spend around 40% of their time working on activities that don’t directly produce income, like hiring. Outsourcing these activities can free up more of your time and energy to focus on driving new business. 

Just how involved is an employment agency in the hiring process? The simple answer is, as involved as you want them. A full-service staffing agency can tackle every phase of the hiring process, including building the job description, sourcing candidates, conducting pre-interview screenings, and even conducting interviews. 

Once the pool of candidates has been narrowed down, an employment agency will typically deliver the top contenders to the company for review, follow-up interviews and the final decision. The agency’s level of involvement is one of the things you’ll want to discuss during your initial meetings to make sure you’re both on the same page about roles and responsibilities. 

Talk Directly With A Staffing Expert Today

The easiest way to get a feel for whether a staffing agency is right for you is to open a conversation and decide for yourself. 4 Corner Resources is a nationally recognized employment firm that specializes in connecting candidates with jobs in technology, finance, marketing, customer service, legal, and healthcare. 

Our primary focus is on building strong relationships, both with our clients and our candidates, which we believe breeds the strongest recruiting results. We’re not a massive firm that handles a mountain of positions; each of our recruiters takes on fewer contracts so they can give specialized attention to each one. 

We’re eager to answer your questions and explore whether working with a staffing firm is the right fit for your needs. Contact us to schedule your complimentary consultation today.

Pete Newsome

About Pete Newsome

Pete Newsome is the president of 4 Corner Resources, the nationally acclaimed staffing and recruiting firm he founded in 2005. His mission back then was the same as it is today: to do business in a personal way, while building an organization with boundless opportunities for ingenuity and advancement. Pete is also founder of career advice site zengig, a comprehensive platform of resources, tools, and guidance for every professional journey. You can hear him each week hosting the Hire Calling and Finding Career Zen podcasts. When he isn’t thinking, writing, and speaking about career success, Pete spends his time relaxing and traveling with his family of six.