What to Look for When Evaluating Staffing Agencies

What to Look for When Evaluating Staffing Agencies.jpgWhen trusting the most important part of your business to a staffing agency, make sure you know what you’re getting. Every staffing agency has its own system for hiring people, its own criteria for sending recruits and has a unique way of conducting business in general. It is essential that you understand all of the details to find the employees that will fit best into your own business.

What’s Included in the Markup?

The markup is the amount of money charged by the staffing agency after it pays the employee. This percentage rate is determined by the staffing agency and includes both direct and indirect costs of supplying you with staff. Examples of direct costs would be the employment taxes that are required. Indirect costs would include the recruitment of employees and the fee the agency gets for providing the service. Does the markup of the company in question include:

Adequate compensation coverage

How much of the fee goes to the actual employee? If the company doesn’t pay them a decent wage, you are not likely to get someone skilled in the trade. The quality of employee you get will have a great deal to do with whether the compensation is minimum wage or twenty dollars an hour.

Knowledge of employment laws

Does the company know enough about employment laws to make sure to include adequate amounts for taxes? How much do they know about positions that may require security clearance? There are many employment regulations that, when not followed, can come back to haunt you. Make sure the company you deal with is aware of, and follows, all of these laws.

Are there additional charges? (PW reports, hiring fees, deposits, etc.)

When you are quoted a fee, make sure it includes everything. Some agencies quote what seems to be a reasonable fee but they then add on other fees that were not previously mentioned. Make sure that you are told of all fees before signing any paperwork.

What Can You Expect From Their Services?

When seeking to fill a position, you want more than a warm body to take up space. You want to know that anyone who is sent, knows the job, and is worth the time and money spent to get them there. Don’t hesitate to inquire about what you can expect from anyone who is sent to you. Make sure you express your needs and expectations and then listen to find out if these will be met. It is essential to make sure all criteria is conveyed to the agency so they can narrow their search to best meet your needs.

Recruiting Process

How do potential employees find out about the staffing agency? Some places will take applications from anyone walking in, others seek out top employees at businesses across the area and still others have different recruiting methods. While the method of recruitment isn’t the only indication of the skill of applicants, it can give you other questions that need to be answered before you sign on with the agency.

Prescreening/Qualifying process

What kind of testing is provided to applicants before they are eligible for placement? Find out if office staff is tested on computer skills. What kind of technical tests are given to recruits for highly-technical jobs, and what scores are required to be eligible to be placed in a position. You want to make sure that the basics are already known by any employees or at least know how much training you will looking at providing. Do they regularly contact references of applicants and what questions do they ask?

Success rate

This may well be one of the most telling factors of what kind of agency you are dealing with. Are you looking for an agency that boasts a one hundred percent success rate? Well, that would be nice, but that kind of success rate sounds a bit too good to be true, and probably is. You do want to find an agency that does have a high success rate, but make sure their numbers are realistic. If their success rate is low, don’t rule them out until you find out why. Maybe they are just starting out and haven’t placed more than one or two people so far. If all the other things check out, then they may have potential. 

What Defines Their Business Model?

Knowing what business model a company operates on will tell you a great deal about the quality of their service. You can learn about where they place importance when it comes to their mission. For example, are they simply in the business for profit or do they pride themselves on pairing up employers and employees? 

Do they understand the local market?

To benefit both employees and employers, a staffing agency must understand where the local job market stands. Have they done an analysis and found that the kinds of employees they represent are needed in the area? Conversely, do they have the quality of employees that the local companies are seeking? In a town that employs a high volume of medical personnel, having many manufacturing executives seeking positions is not going to work. Find out how large, or small, the pool of choices is going to be for your position. 

What are the qualifications of their staff?

Ask about the credentials of those who work for the agency. Find out about how much training they have in recruiting and how skilled they are in evaluating potential employees. Do their backgrounds include experience in hiring procedures? How often do they undergo training in new employment laws? Find out if there are any negative reports from the Better Business Bureau. Try to find out some of their successful placements and check on any references they are willing to provide.

Will you get your own rep?

It is important to know who you will be dealing with throughout the whole procedure. Is the company set up where you are expected to speak with anyone who happens to be around or will you have access to one person who can follow you from the day you sign up until you have successfully found the employee you need? Either route can be successful, but knowing what you are facing from the start will help avoid confusion along the path.

Final Words

Important business matters such as hiring employees can be both a blessing and a curse. If you take the time to know exactly what you want in an employee, you can then convey that need to any agency. You need, however, to make sure the agency is the correct one for you.  Do your homework.

Make sure the company you choose can understand what you need, hire the kind of employees you are seeking and align itself with the kind of values you would use in hiring employees yourself. Being able to trust someone else to weed out the people who wouldn’t work out can end up saving you time, money and frustration. 

 

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.

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Michelle Nystrom
Michelle Nystrom
Recruiter, people enthusiast, career match maker. I specialize in helping people see and reach their full potential, find meaningful work, connecting candidates and companies, and some HR on the side just for fun. Life should be lived at full speed, preferably in the great outdoors, and nothing should be left on the table. Literally. I love food.

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