The Ultimate Guide to Navigating a Staffing Agency Contract

William Stonehouse Blog

Know The Industry Specific Terms

Dealing with a staffing agency means you must become an informed consumer about the field. Knowing the industry-specific terminology will allow you to ask pertinent questions before signing the dotted line.

  • Terms specific to the staffing industry include direct hire, temporary, temp-to-perm and assigned employee.
  • Direct hire is when the agency finds an individual to fill a permanent position.
  • Temporary involves filling a position that involves a specific time period.
  • Temp-to-perm involves placing an individual on a temporary basis, with the possibility of being hired as a permanent employee.
  • Assigned employee is the term used for any individual the agency fills your open position with.
  • Contacting a sales consultant who is specially trained in understanding staffing agency contracts can be your key to success to help your firm expand.
Know The Agency’s Duties And Responsibilities

Staffing agencies can offer a number of hiring options to satisfy many businesses. Do you need a temporary agency to provide you with extra personnel to work on a special project? Do you need an employee, but are hesitant to hire one without testing her out first? If so, you may need an agency that does temporary-to-hire staffing.

  • Fully understand what services the staffing agency will provide. Will they pay the employee’s payroll taxes or expect you to do this? Did they require the employee to sign a confidentiality agreement to protect you? Or, do they expect you to do that?
Understand What Is Expected Of You

Clients have certain duties and responsibilities as well, as specified in the contract. Duties include providing a safe work environment, properly supervising the employee and not changing assigned duties without first notifying the staffing agency.

  • Before signing the contract, discuss with your staffing agency professional whether there are any penalties involved. If so, what situations warrant the penalties. For instance, you may be financially liable for assigning new duties to your assigned employee.
Know The Rates And Fees Involved

Placement fees are the amount you pay for the privilege of doing business with a staffing agency. The agency is finding a new hire, going through the interview process and referring the individual to you for final approval. This all involves time, money and knowledge. A placement fee can be either a percentage of the employee’s annual salary or a predetermined amount.

  • Your temporary staffing agency may have additional fees such as a hiring fee that occurs when you permanently hire a temporary employee. Be sure your contract has a clause stating what the fee will be and how it will be determined.
  • Understand that additional bill rates may occur when the staffing firm incurs increased or new labor costs associated with your new employee. Costs include benefits, payroll taxes, wages and social program contributions.
Read The Fine Print

Even though contracts can be cumbersome, do not make the mistake of skimming over the fine print. As boring as it can be, read this information with a keen eye to detail. This is where hiring a professional can be especially helpful.

  • Whenever you do not understand information, ask the staffing agency. If the answer is not to your liking, find another staffing agency. There is no such thing as a stupid question.
  • If something is not to your liking, tell your staffing agency professional that you want your attorney to look over the contract. A reputable staffing agency will have no problem with this request.
  • Fine print is where you will find additional financial information that can make or break your business relationship.
  • Entering into a staffing agency contract can be one of the best decisions you and your firm make when hiring new talent. If you still are uncertain about the legalities involved, hiring a sales recruiter who is specially trained in dealing with staffing agencies will keep you protected.
William StonehouseThe Ultimate Guide to Navigating a Staffing Agency Contract