Guide to what is a Staffing Agency

What Is a Staffing Agency? A Comprehensive Guide

From faster hiring to more flexibility, discover how working with a staffing agency can benefit your business.

What Is a Staffing Agency? A Comprehensive Guide


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Finding the right talent has become a crucial factor in maintaining a competitive edge, and working with external partners like staffing agencies has emerged as an effective solution for helping businesses navigate the increasingly tough job market, connecting organizations with the best candidates for their needs.

However, how staffing agencies can solve recruiting challenges is not clear to everyone, and some businesses are missing out on the benefits of working with an external agency to find the talent they need.

In this blog post, we’ll explore how these agencies work, the pros and cons of working with a staffing agency, and common misconceptions. We’ll also go over what to consider when searching for the best staffing agency for you.

By explaining the ins and outs of working with a staffing agency, we aim to reveal how they can unlock the door to a world of untapped talent for your business.

What Is a Staffing Agency?

A staffing agency serves as a vital link between job seekers and employers, providing recruitment services and connecting candidates with suitable job opportunities. These agencies streamline the hiring process with a comprehensive suite of services such as advertising job positions, screening prospective candidates, and conducting interviews.

A staffing firm can assist companies in recruiting for various types of positions, from temporary and temp-to-hire roles to long-term contract positions. They draw upon their expertise in the job market and hiring process to identify the ideal candidates for hiring companies, creating successful employment matches.

These agencies not only facilitate the recruitment process but also handle the compensation of temporary or contract workers they place. This means that the staffing agency pays the workers they place, managing their salaries, benefits, and compliance-related matters. This setup provides an added layer of convenience for companies as they don’t have to manage the HR tasks associated with these workers.

What Are the Benefits of Using a Staffing Agency?

Working with a staffing agency provides numerous benefits, such as:

Faster hiring

Staffing companies have a wide network and access to a multitude of job seekers, which significantly speeds up the hiring process.

They maintain a constantly updated database of potential candidates, which they can tap into whenever you have a job opening. This extensive network not only includes active job seekers but also passive candidates who might not be actively looking for a new job but are open to exciting opportunities.

 Moreover, these agencies have a deep understanding of the job market and industry trends, which allows them to identify and attract the right talent quickly and efficiently. They use advanced recruitment tools and technologies to streamline the recruitment process, reducing the time it takes to fill a vacancy.

Reduced workload for internal teams

By taking over the recruitment process and administering payroll and benefits afterward, staffing firms reduce the workload of your HR team, allowing them to focus on other crucial tasks. For example, it will enable your HR team to invest more time in employee engagement, training, and development, thus fostering a positive organizational culture.

employee working in a flexible schedule remotely

Flexibility in workforce management

Staffing agencies can provide temporary or contract-based workers based on your needs, offering greater flexibility in managing your workforce. This flexibility allows you to scale up or down your staff based on seasonal needs, project requirements, or economic shifts.

Additionally, it lets you test out new positions or roles without committing to a permanent hire, ensuring a strategic approach to workforce planning.

Specialized hiring

Staffing agencies often specialize in certain sectors or job roles, enabling them to find candidates with the specific skills and experience you require. Their specialization allows them to have a deeper understanding of your industry, making them more adept at identifying the perfect fit for each role.

Furthermore, they have established relationships with professionals in the sectors they specialize in, which helps them source high-quality candidates efficiently.

Reduced hiring risk

A staffing company conducts thorough screenings and interviews—as well as background checks, employment verifications, and reference checks—reducing the risk of hiring unsuitable candidates. This process includes not just evaluating the candidate’s skills and experience but also cultural fit to ensure candidates align with your company’s values.

These benefits, combined with the expertise and knowledge of staffing agencies, can help you save time and resources, allowing you to focus on your core business objectives.

Possible Drawbacks of Working With Staffing Agencies

Despite the many benefits that staffing agencies offer, it’s essential to consider potential drawbacks that may arise. Understanding these potential challenges can help you make an informed decision about whether to engage a staffing agency’s services.

Some of the potential challenges to overcome include:

Additional hiring costs

One of the most common concerns is the additional hiring costs associated with using a staffing agency. These costs can impact the overall hiring budget, as the fees for the agency’s services can add up, especially for large-scale recruitment efforts.

However, although these may seem daunting at first, they are actually an investment in the quality of the hires and the efficiency of the hiring process. When you factor in the time and resources that are saved by delegating the recruitment process to external professionals, as well as the potential increase in productivity from hiring highly qualified candidates, it can become clear that these costs are justified.

Of course, though, it’s important to carefully consider your budget and understand the fee structure of a staffing agency before engaging its services.

Lack of direct control

You may lack direct control over the selection process when using a staffing agency. This could potentially result in mismatches between the candidate’s abilities and your requirements. The agency is responsible for screening and selecting candidates, and their selection may not always align with your expectations.

However, by carefully selecting a reputable staffing agency and fostering open communication throughout the recruitment process, this drawback can be mitigated, ensuring a successful partnership.

Ultimately, we feel the benefits of using a staffing agency far outweigh the potential drawbacks, making it a wise choice for many businesses looking to grow and find top talent in today’s competitive market.

Staffing firm looking at candidate resumes

Types of Staffing Agencies

Staffing agencies come in various forms, each catering to specific needs and industries. Here are the main types:

  1. Generalist staffing agencies: These agencies supply personnel for a wide range of industries and job functions.
  2. Specialist staffing agencies: A specialized staffing firm focuses on a particular industry or job function, offering recruitment services tailored to specific sectors. For example, an accounting staffing firm would specialize in recruiting candidates for roles such as accountants, financial analysts, auditors, and other finance-related positions.
  3. Temporary placement agencies: These temp agencies offer numerous job opportunities for individuals seeking short-term employment or temporary jobs.
  4. Permanent placement agencies: These agencies focus on filling positions that may lead to permanent, full-time work.

Understanding these various types of staffing firms can guide you in selecting the one best aligned with your specific hiring needs.

Process of Partnering With a Staffing Agency

Navigating the process of working with a staffing agency may initially seem daunting, but breaking it down into its fundamental components makes it clear that it’s simple.

The process essentially consists of four steps:

1. Employer-Agency collaboration

A successful partnership between you and your staffing agencies starts with effective collaboration and communication. You need to provide an accurate job description and the role requirements to ensure that the agency can match the most suitable candidates to your available position.

Beyond job descriptions and requirements, sharing information about your company culture is crucial. Even your business policies like dress code, working hours, and break policies can give the agency an insight into your company’s culture.

Clear communication is paramount, as it enables staffing agencies to identify the most appropriate candidates. Open communication channels should be maintained throughout the staffing process, especially if the requirements and preferences for a position change during the process.

This employer-agency collaboration lays the foundation for a successful hiring outcome for both you and the potential new hire.

2. Sourcing candidates

Once your agency understands what you are looking for, they can begin the next step of finding qualified candidates.

Staffing agencies use a variety of methods in order to cast a wide net to source and recruit candidates, such as:

  • Advertising job openings on their website and other job boards
  • Leveraging social media or professional networks to reach potential candidates
  • Making contact with potential candidates through professional platforms like LinkedIn

This recruitment approach allows staffing agencies to tap into a vast pool of talent, ensuring that they find the best candidates.

3. Screening and interviews

Now that your agency has found skilled candidates that match your requirements, it’s time to whittle the list down to the most suitable.

Staffing agencies must implement a comprehensive screening and interview process to evaluate candidates’ skills, qualifications, and cultural fit prior to presenting them to you for consideration. This process plays a crucial role in evaluating applicants’ abilities, credentials, and compatibility with your company.

4. Final interviews and job offer

After the staffing agency has conducted interviews and shortlisted the most suitable candidates for the job, the next steps in the recruitment process take place.

Most staffing agencies will present this shortlist to the hiring company, providing detailed profiles of each candidate, including their resumes, interview notes, and any relevant test results.

You will then review these profiles and decide which candidates you would like to meet for a second interview. This interview is usually conducted by your company’s HR team or department manager.

Once the next round of interviews is complete, you will select your preferred candidate and offer them the job. The staffing agency will then facilitate the job offer and negotiation process, ensuring a smooth process for both you and the candidate.

After the candidate accepts the job offer, the staffing agency will carry out any necessary background checks and finalize the employment contract.

But this isn’t the end of the road with the staffing agency. As the staffing firm will usually be paying the placement and administering any benefits, they stay involved with both you and the candidate throughout the placement’s time with you.

Through these straightforward steps, staffing agencies streamline the hiring process, making it easier for you to find and hire top talent.

Employer thinking seriously about choosing the right staffing agency

How Do You Choose the Right Agency?

To make using a staffing agency an efficient strategy, it’s critical to pick the agency that’s best for you.

Factors to weigh up include:

Industry specialization

The agency’s expertise in your industry is an essential factor to consider. An agency that specializes in your industry will have a large pool of relevant candidates and will be more equipped to identify the skills and qualifications needed for your specific job roles.


Look for agencies that have solid reviews and testimonials from candidates and employers. This can indicate their commitment to providing excellent service and their ability to match candidates with job opportunities successfully.

 Additionally, an agency with a good reputation is likely to have strong relationships within the industry, which can further enhance its ability to source top talent.


An experienced staffing agency will have a proven track record of successful placements, a broad network of candidates, and a deep understanding of the recruitment process and industry trends. They will have refined their recruitment strategies over time, enabling them to identify and attract the best candidates quickly and efficiently.

 Furthermore, they will have established strong relationships with various job boards and platforms, allowing them to advertise job openings widely and attract a diverse pool of candidates.


The fee structure and overall cost of the agency’s services is, of course, one of the most important elements to consider.

 Staffing agencies typically charge a fee based on a percentage of the hired candidate’s salary. Some agencies may charge a flat fee, while others may charge on a sliding scale based on the salary of the position being filled. These fees can vary significantly from one agency to another, and it’s essential to clarify the fee structure upfront to avoid any surprises later on.

 Additionally, it’s important to understand what’s included in the fee. Some agencies may provide additional services such as background checks, skills testing, or training as part of their fee, while others may charge extra for these services.

Screening and selection

A reputable staffing agency will employ rigorous screening and selection processes to ensure only the most suitable candidates are put forward. This typically involves an initial resume screening, followed by a series of interviews and assessments to evaluate a candidate’s skills, experience, and cultural fit.The agency may also conduct reference checks and background checks to verify a candidate’s qualifications and past employment.

This thorough screening and selection process helps to ensure that the candidates presented to you not only have the necessary skills and experience but also align with your company’s culture and values.

It’s crucial to choose a staffing agency that takes the time to understand your unique needs and preferences and tailors their screening and selection process accordingly.

By focusing on these factors, you can find a staffing agency that aligns with your organization’s needs and values.

Remote worker disagreeing with staffing agency misconceptions

Common Misconceptions About Staffing Agencies

Despite the many benefits of using staffing agencies, there are several common misconceptions that persist. These include:

  1. Staffing agencies are too expensive: While there are costs associated with using a staffing agency, many businesses find that the time and resources saved in the hiring process outweigh these costs. Furthermore, the quality of candidates provided often leads to long-term success, making it a worthy investment.
  2. Staffing agencies provide low-quality candidates: This couldn’t be further from the truth. Staffing agencies have access to a wide network of potential candidates and use rigorous screening processes to ensure only the most qualified individuals are put forward for consideration.
  3. Staffing agencies don’t care about the success of their placements: In fact, the success of a staffing firm is directly tied to the success of their placements. A successful placement enhances its reputation and leads to more business, so it will make sure of the success of both the candidates it places and the businesses it serves.

In reality, reputable staffing agencies take great care to ensure that employers and job seekers are well-matched. By not buying into these misconceptions, businesses can make more informed decisions and tap into the full potential of staffing agencies to meet their hiring needs.

Final Thoughts

Staffing agencies play a pivotal role in connecting job seekers and employers, simplifying the hiring process, and providing access to a vast talent pool. By understanding the different kinds of staffing agencies, their processes, and the factors to consider, you can make a well-informed decision when selecting the right staffing agency to partner with.

As the job market continues to evolve, staffing agencies will remain an invaluable resource for businesses seeking top talent.

If you are looking to hire efficiently while cutting your overhead costs, consider partnering with Near to hire top talent from Latin America. Schedule a free consultation today!

Frequently Asked Questions

What is the difference between a staffing agency and an EOR?

The services of staffing agencies and employer of record (EOR) companies often overlap, but they each serve unique functions in the employment process. You can read about the differences in our article on when to use an employer of record vs. a staffing agency. But in brief, both can take care of paying your placements and compliance, but only a staffing agency can find you the placement in the first place.

What is the difference between a staffing agency and a recruitment agency?

The main difference between a staffing agency and a recruitment agency lies in the employment relationship and sometimes the types of positions they fill. A staffing agency typically helps companies fill temporary or contract positions—but can extend to permanent positions, too— and the agency is the one that employs the workers. They handle all the HR tasks, including payroll, benefits, and compliance for these workers.

On the other hand, recruitment agencies mainly help companies fill permanent roles. They search for, interview, and select candidates, but once a candidate is hired, they become a direct employee of the hiring company, not the recruitment agency.

How do staffing agencies ensure the quality of their candidates?

Staffing agencies typically have rigorous screening processes in place to ensure the quality of their candidates. This can include initial resume screenings, multiple rounds of interviews, skills assessments, and even background and reference checks.

Some agencies also offer additional training or certification programs to further enhance the qualifications of their candidates. The goal is to provide employers with the most qualified and suitable candidates for their specific job requirements.

And if a placement doesn’t end up being the best choice, many staffing agencies will replace that worker. For example, Near offers to replace any placement we make that doesn’t work out, for whatever reason, free of charge. But our rigorous pre-screening and assessment processes mean that rarely happens. 

Frequently Asked Question

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