December 28, 2018    |    By

You may be wondering what a staffing agency does and how it differs from a headhunter. This article will help you learn the differences between the two, making the choice of whether or not to work with a staffing agency an easier one.

Definition of a Staffing Agency

A staffing agency brings together employees with certain skills and the businesses that are looking for these employees. Think of them as a matchmaker for the business world. Employees who are looking for work apply at a staffing agency and are tested, interviewed, prescreened, and, in some cases, have their references checked. After they undergo the pre-screening process they are eligible for placement with the agency.


Employers who have job openings,  partner with the staffing agency, who then reviews their list of available employees and tries to find ones that match the skills required by the business. They also recruit for the position specifically to make sure that they always have access to the most qualified talent on the market. Once a qualified employee is found, the staffing agency sends them to the business to fill the open position.


Depending on the position, sometimes the candidate is sent directly to work and start right away. This is common in temporary or labor positions. In other cases, typically those where the position is long term, the business will interview one or multiple candidates from the staffing agency. In this case, the agency still prescreens and qualifies the candidates. They then set up interviews for the business to meet with the candidates to determine which candidate they would like to start in the position.


What Does a Staffing Agency Do?

Staffing agencies pre-screen employees and then place them where there are openings within a business. The positions they fill may be temporary or long term, full or part time, seasonal or year-round. Sometimes the positions start out as temporary but can lead to long term work after a period of time. This allows for a business that needs an employee to fill a position to do so without having to go through the process of advertising, interviewing, pre-screening and hiring. The company in need is supplied with employees who are ready to start working immediately.


Staffing agencies are continually recruiting and screening candidates to make sure they have access to talent for their clients. The agencies that are most successful are proactive in their recruiting efforts and screen candidates for all positions as well as advertising and screening for specific positions their clients are looking to fill. They recognize that each client has a unique need for skill set, personality and experience, and they recruit accordingly. The larger agencies are able to draw more candidates and offer more qualified talent to their clients as well. They recognize that recruiting is an ongoing process and they invest a great amount of time and resources into their recruiting efforts.


The Roles and Responsibilities of a Staffing Agency

Staffing agencies take on many of the roles and responsibilities of a human resources department, except they perform this role for numerous businesses that hire them. Staffing agencies can be responsible for:

Hiring and Firing

The staffing agency is considered the actual employer and it is their responsibility to hire qualified people and to end the assignments of those who don’t meet the expected standards. This does not always mean termination of the employee as in some cases the assignment may be ended because it was not the right fit but the employee may be placed elsewhere.

New Hire Paperwork

When a company decides to hire through a staffing agency, the agency handles all the new hire paperwork and pre-employment screening. This includes such things as W4s, I9s, applications, employee notices, policy and handbook acknowledgements, and any other required paperwork. It also includes such things as drug screens, background checks and physicals. These are often done based on the client’s requirements for hire but the agency may require them in some cases as well.


The staffing agency handles all the payroll for the placed employees. This also includes handling any garnishments, unemployment claims, issuing of checks, W2s, etc. The placed employee reports on the agency’s payroll so the client business does not have to deal with any payroll issues or paperwork.

Disciplinary or Performance Issues

Taking on the role of being the actual employer, any problems regarding the employee are taken care of by the staffing agency. If a business has a complaint about a situation, the staffing agency is responsible for correcting the employee. This is often done in conjunction with the client business as some prefer to handle disciplinary action themselves then communicate that to the agency who keeps records of the corrective action in the employee’s file. If a placed employee is having issues on the job, the client business can let the agency know. The agency will then address these issues with the employee and determine with the client business if the employee should continue in the assignment.

Employment Taxes

Any taxes that are required of employers is taken care of by the staffing agency rather than by the individual businesses where the employees are placed. Because the agency is the employer of record, they are responsible for tax payments, workers’ compensation coverage and such things as garnishments and unemployment claims. This allows businesses to hire employees and try them in the position to make sure they are the right fit without taking the liability for such things as unemployment and payroll. For temporary or seasonal positions, it allows the business to hire for their current needs without the paperwork of a traditional hire.


How Does a Staffing Agency Differ From a Headhunter?

Headhunters supply businesses with the skilled employees they are working for, so what is the difference between them and staffing agencies? There are several differences.

  • Headhunters search out qualified candidates as the need arises and typically handle positions that are high end, salaried positions only. Staffing agencies interview and hire employees who come to them with the goal of eventually finding positions for them and will usually help their clients with all positions, from entry to executive level.
  • Staffing agencies are actual employers while headhunters are simply matchmakers. Headhunters don’t hire individuals but rather when they place candidates the candidates start on the client’s payroll immediately There is no “trial” period like there is when the candidate’s work on the agency’s payroll.
  • Headhunters approach individuals who qualify for an open position with the idea that the individual will be hired by the company with the opening. They normally only work with full-time, long term, high salaried positions.
  • Staffing agencies place temporary, long term and temporary-to-hire employees. These aren’t normally an option with headhunters.
  • Headhunters work exclusively for the business. Staffing agencies work on both sides of the equation, employers and employees.
  • Because headhunters don’t run payroll or offer the trial period for their placed candidates, there is often no guarantee when it comes to the placement. Unlike a staffing agency, where you can end the assignment of an employee who is not a good fit without paying out the whole contract, you pay the whole amount of the direct hire contract to the headhunter up front and often with no replacement guarantee.



If you have a long term, high end position, that you need to fill and you are willing to pay a steep price to find the right person, a headhunter might meet your needs. However, if you want to try out an employee before actually hiring them or if the position you have open is only temporary, a staffing agency is much more suited to your needs. Overall, staffing agencies are more suited to hiring needs of businesses at all levels. If the position you are needing to fill is high end, consult with local agencies to see if that is something they will take on. Most agencies will let you know if the position is one they are not able to staff for, at which point you can consult with a headhunter.


Make a great first impression at your next job interview.

This blog post is intended for informational purposes only and does not constitute legal advice. No attorney-client relationship is created between the author and reader of this blog post, and its content should not be relied upon as legal advice. Readers are urged to consult legal counsel when seeking legal advice.