Is using a temp agency the right choice? You decide.

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The use of temporary workers or “staffing temps” as some people know them as has grown over the last several years since the economy dropped. Many companies downsized, cut costs and had to hire part time or at a lower hourly wage. Most companies now days, even though the economy is coming back, have at least hired or will hire a temp for one position in their company.

Possible benefits to think of

Lower labor costs – One of the top reasons that companies use temp employees is to drop their costs. These can be from posting help wanted advertisements, insurance, training and overtime costs. When a company utilizes a temp staff, it gives them the financial management they need to weather the economic storm.

Workforce efficiency – There are several tasks around the office that a temp worker could be doing, leaving time for your seasoned professionals to focus on what will make you money. When you hire temp workers, you will create a more productive atmosphere for your career employees.
No benefits – Benefits are a costly expense to employers, especially those that have a large group of employees on staff. In order to bring down the costs of bringing on one or two full time employees a company could bring on a few more temps to get the same amount of work done without benefits (which is supplied by the temp staffing agency at no cost to the company).

Save on hiring – Every person has made a poor hiring decision. Instead of worrying that your next employee might not work out after you have spent the time and money in training and interviews; Look at utilizing a temp staffing agency. Temps are pre-screened and their skills are tested beforehand. Many temporary agencies also allow you to switch a temp to meet your needs and requirements.

Unemployment claims – This last several year’s unemployment went up due to the economic crash. California handed out IOU when the funds ran out because there were so many out of work. Workman’s comp and unemployment are two expenses that you won’t have to worry about with a temp; the agency is responsible for that.

Other things to think about

Higher rates – When you use temp service, expect to pay between 15-20% more for their hourly salary. The reason for the increase is you are paying the agency as well. Your first thought would be that it doesn’t make sense to hire a temp, but remember you dictate how long you need them for, and you will be able to hire the temp when this contract expires, reducing this hourly rate.

Contract buyouts – If you decide you want to bring on your temp permanently, you will have to go into a “contract buyout” phase. When doing this you can either wait out the time period of the contract or pay the difference now to bring them on full time.

Building a team – Due to the fact that you might a few temps mixed with full time employees, isn’t exactly the best formula for an overall team. Temps come and go, so relationships aren’t built as quickly or as strong. Cross training can also be an issue when you are utilizing temps to just take a few responsibilities.

Commitment – Commitment and work ethic can be a problem with anyone that you hire, but you might see a little more with temp hires. Most are great and willing to work hard, where there is a few that know that they won’t be there long therefore their attitude expresses this.

Finding a good agency – A big concern is the screening process that an inexperienced or smaller agency would conduct. Ask for a few client references, and see what their reputation has been. You can also ask for a copy of the background check of the employee before bring them on. Most temp agencies will work with you on these concerns.


Transfac Capital has financed several staffing agencies invoices over the years to help them grow their business. If you are a staffing agency that could use immediate funding on outstanding invoices call 1-800-458-6056 today.