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How Much Do Staffing Agencies Charge?

Staffing agencies have become more and more popular over the past few years.  They are an easy way for employers to find qualified and capable candidates.  Staffing agencies work with both the employer directly and the candidate.  They look for the best candidate to fill a role for an employer and look for the best position available for the candidate.  But how much do staffing agencies charge?

As any employer knows, finding the right and the perfect candidate can be challenging.  Between posting job opportunities on multiple job boards, advertising those positions, and the initial back-and-forth with potential candidates, it can be both costly and time-consuming.  Similarly, candidates understand the frustration in applying to multiple positions, only to hear nothing and receive no updates from the company.

That’s where staffing agencies come in.  Staffing agencies look to bridge the gap between the employer and the candidate.  They essentially play the role of the “middle-man” between the two parties.  The staffing agency looks to match the best, most qualified employees to an employer.

Staffing agencies are a great way for employers to attract new candidates.  They allow the staffing agency to utilize their rolodex of candidates and contacts to match a candidate to the role.  Staffing agencies work directly with the employer to assess their needs and what they are looking for in a candidate.  They determine the skills, qualifications, and requirements of the position.  In addition, they study the culture of the company and attempt to ensure that any potential candidate would fit-well within that culture.

Employers looking to fill open positions would do well with utilizing a staffing agency.  It allows them to focus on their core business and to continue servicing their clients and customers.  By engaging with a staffing agency, the employer allows themselves the time to focus on other, more pressing problems which need their attention.

Similarly, candidates looking for open positions should utilize the assistance of a staffing agency.  While staffing agencies are generally thought to be the realm of the employer, they too can work directly with candidates to find a perfect fit.  Staffing agencies will work directly with the candidate to get a better understanding of their education, their experience, and their skills.  In-fact, some agencies will even work on a candidate’s resume with them.

Staffing agencies are beneficial because they are forced to be unbiased and impartial.  They will simply look for the best candidate and the one that would fit in well with the employer.  Because the agency is employed or contracted by the company, it is in their best interest to only present and bring in the best and most qualified candidates.

In terms of cost and how much do staffing agencies charge, well, it depends.  Firstly, it’s good to understand that staffing agencies do not charge the candidate.  As their services are contracted out by the employer and the company, they are the ones who pay the agency.  However, there are two distinct pay structures that nearly all staffing agencies use.

The first is the one-time fee.  In a one-time fee structure, the agency looks to find a qualified candidate to fill the role.  Once the role is successfully filled, the agency receives payment from the employer.  Typically, this fee ranges from 10-33% of the candidate’s yearly salary.

In the second structure, the staffing agency charges an hourly fee.  This fee is negotiated with the employer directly.  Once a candidate has been placed in a role, the employer will pay the staffing agency the employees hourly wages.  The agency, in turn, will take a percentage of those wages and provide the remaining to the employee.  So for example, if an employee is placed successfully in a role that pays $30 an hour, the agency will take $10 and provide $20 to the employee.

There are a number of large, well-known staffing agencies across the country.  You can find a pretty exhaustive list here.  While the use of staffing agencies is debatable and up-for-debate, we have always found them to be useful and to provide a service for both the employer and the candidate.  Our one caveat though is to be sure to negotiate your hourly wages directly with the staffing agency and to ensure that you are satisfied with the end-result before committing to the position.

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