staffing agency get paid

How Do Staffing Firms Or Agencies Get Paid?

How Do Staffing Firms Or Agencies Get Paid? 1024 765 kupplinadmin

It costs money to use the services of a staffing agency to find a new employee for your company. Staffing firms vary greatly in how they charge for their services and in how they determine success. Executive and niche placements typically pay much higher fees to staffing agencies than entry-level positions do. The cost of staffing services can vary widely depending on which staffing agency you work with and how their fees are structured.

Contract Workers

To generate revenue, many temp agencies deduct a fixed fee from each hire’s paycheck. The temp agency, for instance, will charge your company a certain amount per hour for the employee’s services but will only pay them a fraction of that. The agency’s fees are rolled into the hourly or salary rate you pay for this type of position.

Some staffing agencies may charge significantly more than the standard 25% markup on an employee’s hourly or annual salary. Particularly true for exceptional and scarce skill sets. In some industries, markups can approach 75%.

Permanent Workers

Many staffing agencies will still take a cut of an employee’s salary even if they are placed by the agency into a company rather than working for the agency themselves. Agencies that directly place workers often ask for a one-time payment equal to a percentage of the worker’s first-year earnings rather than a salary.

For positions in the executive and specialist brackets, this figure can approach 50%. You can either make one lump sum payment when the position is filled or make installment payments after the employee has been on the job for 90 days, depending on the terms of your contract with the agency.

To put it simply, a temp-to-perm arrangement is one in which a worker is hired on as a temporary employee for a set period of time before being made a permanent employee. For this type of worker, your staffing agency may ask for a hybrid payment consisting of both a lump sum upon hiring and a percentage of the worker’s pay during the temporary period.

Fixed-cost staffing

Some organizations have flat rates for their assistance. These firms typically charge a retainer fee of some sort each month until the position is filled. They may be hired to find and recommend exceptional but elusive candidates because of the specialized and niche fields in which they work.

High-level executive positions, niche positions in the sciences and engineering, and the development of highly skilled medical professionals are common areas of focus for retained agencies. If a retained agency fails to refer the required number of qualified candidates, it may continue to charge a monthly fee until the position is filled or the agency is terminated.


Unless the staffing agency requires a retainer or flat fee, you should not be expected to pay anything until the open position has been filled. For more information on the due date and method of collection, please contact your respective agency.

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