What is a Personnel Agency? Overview, Benefit, 11 Facts

A personnel agency can be defined as the service provided by a company in order to provide staff to another company. Usually the companies do not provide their own employees but have their services outsourced to a third party. Read more at the article below to know all about it.

What is a Personnel agency?

A personnel agency operates as a middleman between job candidates and employers seeking new employees. A competent personnel agency has a mechanism in place to match candidates’ skill sets and experiences to the needs of the available positions. Thus, available employment vacancies are matched with competent people. People sometimes mistake personnel with recruitment, although the two are distinct.

From the moment employees are hired until they depart, personnel companies are engaged. In addition to recruiting, personnel comprises orientation, training, retention, and termination of employees. Recruitment only refers to the first phases of recruiting a candidate.

Understanding a Personnel Agency

A personnel agency often differs from an employment agency in many significant respects. First, an employment agency often accepts customers for all job placement tasks. This includes manufacturing employees, machinists, gardeners, and almost any other form of hired labor that the community may need.

A personnel agency, on the other hand, concentrates on supplying customers with skilled workers who can do general office activities, such as reception, data entry, and other secretarial and clerical duties.

The customer then reimburses the agency for the employee’s services. While the opportunity to purchase a worker’s contract is typically available, many individuals see personnel agencies as a wonderful approach to get temporary staff.

A typical objective of an employment agency is also to place persons in permanent positions with customers. In return for this service, either the company or the newly placed employee pays the placement agency.

The charge may be paid over time or all at once. With a personnel agency, the workers are employees of the agency and get salary and benefits from the agency.

There are several reasons why job-seekers might consider working with a staffing agency. By registering with a trustworthy agency, you may enable someone else to conduct your job hunt.

If you want a more permanent position, you have the chance to develop relationships within the local business community during assignments. There is also the advantage of being familiar with the business culture of numerous organizations.

There is always the potential of requesting an alternative assignment from the agency if you feel the current one to be unsuitable.

Additionally, working with a personnel agency is advantageous for persons who move often. For instance, when a spouse is relocated to a different location due to his or her employment, it is often feasible for the personnel agency employer to be reassigned to the agency office closest to the new residence.

In rare instances, the agency may be able to have an assignment ready for the employee upon completion of the relocation.

What is a Personnel agency?

Once upon a time, the average employment agency paid its full-time and part-time workers nothing more than an hourly pay. In recent years, this has altered. Numerous staffing firms now provide health insurance plans and benefits comparable to those of full-time employees to employees who work at least 32 hours per week on average.

How Personnel agencies work

As you are likely aware, the recruiting process is lengthy. Depending on your sector, it might take between 33 and 49 days on average to acquire a new employee.

Utilizing a personnel agency to discover the best suitable people for your organization may be a wise business decision. It frees up time and personnel resources.

If you are contemplating employing a personnel agency, this is the typical procedure:

  1. Define your recruitment needs. For instance, is it feasible for your firm to hire a full-time personnel agency, or would an on-demand employment platform be a better fit?
  2. Vet the agency you choose. Once you’ve chosen a personnel agency or platform, read its evaluations to confirm that it’s a reputable business that meets your demands. You will also need to conduct at least one interview with your coworker. Then, visit the employment agency’s site or at least have a video chat to acquire a sense of its culture.
  3. Contact the agency. Specify the number of people you need, the talents you’re seeking, and the range of compensation you’re providing. Discuss the hiring schedule. Be prepared with a full description of your needs, and communicate them clearly, in order to assist the agency in finding the most suitable match.
  4. Review the job description. The agency will develop and publicize a job description based on your specifications. Make sure the agency understands your requirements and that the job description is correct.
  5. Wait. Once people begin to apply for the position, the personnel agency will evaluate their skills and experiences and conduct one or more interviews to identify the most qualified candidates for your company.
  6. Make the final decision. The agency will provide you with a list of qualified applicants, and you may reinterview them prior to hiring.
  7. Oversee the onboarding process. Once you’ve determined which prospects to recruit, the agency handles the paperwork associated with employee onboarding.

How much does a Personnel agency charge?

Typically, personnel companies charge 25 to 100 percent of the employee’s annual salary. So, if you and the employment agency agree on a 50 percent markup and the new employee makes $10 per hour, you will pay the agency $15 per hour for their services.

In addition to the markup, you may be charged extra costs for filling the job or contract buyout fees if you hire a temporary employee permanently.

Why do companies use Personnel agencies?

Companies hire through personnel agency for several reasons, including:

Better budgeting controls

One of the key reasons businesses choose personnel firms is to acquire more personnel who can assist with rising workloads. In these situations, personnel firms may assist you recruit swiftly, saving you the money you would have spent on overtime pay for current employees.

What is a Personnel agency?

In addition to saving you money on screening and testing expenses (incurred while doing background checks, drug tests, etc.), these firms handle the whole procedure for you.

Extensive network

Personnel companies often have a vast network of job-seeking people, so the sourcing process may be far more efficient than if your organization advertised the position yourself.

Access to expertise

Personnel companies have a history of locating outstanding personnel. Consequently, outsourcing the process may provide superior outcomes.


The whole recruiting process, from screening to training and onboarding, is handled by personnel agencies. This helps your management team to save time, which can then be invested in other crucial endeavors.

Fast hiring

The employment market has evolved significantly over the last several years, and the recruiting process has become more time-consuming and complicated.

Matthew Rowles, business development manager at the personnel firm Kavaliro, said, “Finding great people is becoming more difficult, and it takes managers a great deal of time to evaluate résumés and conduct interviews while still being responsible for their daily operations.”

“Relying on a reputable personnel agency might save time and money. A personnel agency may prescreen and qualify prospects to guarantee that the hiring manager is constantly interviewing qualified individuals.


According to AJ Brustein, CEO and co-founder of the on-demand employment platform Wonolo, many organizations are delaying the hiring of full-time employees for various reasons. However, an emphasis on leaner operations plays a significant role, according to Brustein.

“Companies are attempting to be more efficient and are only employing staff when absolutely necessary,” Brustein told Business News Daily. “They must develop strategies to ensure that every dollar spent benefits the company. Temporary personnel enables them to have workers just when they need them, and those workers are productive.

Employers have realized the advantages of a flexible workforce that can be dynamically altered to match their continuing recruiting requirements, according to Jason Leverant, the chief operating officer of the national personnel franchise AtWork Group.

“The flexibility [of employing a personnel agency] became the driving reason behind the effort to hire a workforce that can adjust to the ebb and flow of a client’s business needs,” Leverant said.

Reduced risk

There are several legal obligations associated with being an employer, including paying certain taxes, providing insurance coverage, and abiding by labor rules. Financial and operational risks are associated with employing workers, particularly if an employee is terminated or quits suddenly. When you employ a personnel agency, many of these obligations are assumed by the agency.

“Personnel firms are generally considered the employer of record when it comes to the temporary associates that are placed, so… [Personnel firm clients] appreciate the fact that, in general, the personnel firm maintains full responsibility for the employees while they are on assignment,” said Leverant.

What is a Personnel agency?

Are personnel agencies the same as temp agencies?

As both personnel and temporary agencies assist individuals in finding jobs, the phrases are sometimes misunderstood. While some of the services provided by these organizations overlap, their responsibilities in giving job possibilities are very distinct.

As implied by the phrase, temp agencies provide temporary, short-term, and project-based employment possibilities. These agencies are used mostly by businesses that need occasional or ad hoc assistance with specialized tasks. During the Christmas season, for instance, warehouses and restaurants seeking short-term workers may use temp agencies.

In addition to providing comparable temporary career chances, personnel companies can provide a variety of long-term employment alternatives. A personnel firm may, for instance, fill the following positions:

  • Holiday-related temporary employment opportunities
  • Contract-to-hire positions with a trial term, after which the employee may be employed for a full-time position if he or she is a good match for the position.
  • Up to a year-long, reasonably long-term, specialized contract projects with a relatively lengthy duration.
  • Permanent positions in which the person is employed directly if their credentials and abilities fulfill the employer’s requirements.

How to choose a personnel agency

If you decide to hire a personnel agency, it is crucial to choose one with a solid reputation. Remember these fundamental guidelines:

  1. Have clarity. Ensure you have a clear picture of the kind of employees you want. Specify the sort of candidate you want for the position and express this to the hiring agency. Clearly articulating your requirements may assist the government in refining its selection process.
  2. Determine your personnel needs. Do you need full-time or part-time staff? Or might more flexible employment on demand be more cost-effective and productive?
  3. Identify agencies that fit your budget.  Generally, personnel companies impose a net bill rate on their services. This contains the pay rate – the amount they will pay the employee — and a markup, which covers all employee perks, taxes, and a finder’s fee. When choosing a budget-friendly agency, be sure to take into account all of these things.
  4. Look over the legal aspects for the role you’re filling. Examine the contracts and papers to safeguard both parties in the event of a dispute. Determine your company’s legal needs based on the function. Communicate these requirements to the hiring agency while they prepare your documentation.
  5. Make sure you retain enough control over your hiring process. By their very nature, personnel firms remove some control from your organization over the hiring process. The individuals employed via a personnel agency are considered employees of the agency, and they labor to fulfill the terms of the contract. You’ll want to ensure that the contract accurately represents the work you need, the time people are anticipated to work, the roles they must fulfill, etc.

The process of selecting the ideal employment agency for you might include trial and error. Therefore, be patient with new agencies as they bring you applicants.

What are other ways to supplement your workforce?

Personnel firms fulfill a need and may excel in this capacity. However, they charge 25% to 100% of the worker’s salary, which might be difficult for some businesses to explain. Other businesses may feel uneasy delegating so much control over the recruiting process to a third party, particularly for essential positions.

What is a Personnel agency?

In such circumstances, you may find the ideal employee for your business in a variety of additional methods, including:

  • Search within your professional network. Using your network, which may include employees from other organizations, is a second effective method for hiring dependable personnel. You may even be aware of what the applicant can provide.
  • Look for talent on social media. Social networking is a terrific approach to reach out to a big number of qualified prospects simultaneously. For instance, if you opt to recruit using LinkedIn, you may concurrently contact many individuals.
  • Use Talent Scout™, with recruiters on Upwork who are qualified to detect ability in a certain industry. They will present a selection of highly qualified, pre-screened candidates that meet your business’s requirements.
  • Hire a recruiter. Consider hiring a recruiter on Upwork if your recruiting process is already optimized and you need assistance locating qualified applicants. Freelance recruiters on Upwork may assist you in locating suitable applicants for your available positions. They may also conduct an interview.

What are common misconceptions about personnel agencies?

“These individuals choose temporary employment because they value flexibility, are pursuing a career move, or just want a major career shift, and temporary roles are often simpler to get initially than permanent ones,” he said. MBAs often take on temporary job at the entry level since it enables them to have a deeper understanding of firms at the ground level.

The second prevalent misconception regarding recruiting agencies surrounds their workers’ quality. Some employers may feel that employees sourced through personnel firms were unable to find employment elsewhere. Brustein clarified that this is not always the case, stating that temporary workers are often overqualified for the positions they hold.

“Our customers see the basic pay rates they pay their staff, then they see our bill rates and figure we are earning a profit on the difference,” Leverant said. “Many forget that we pay the same payroll taxes, unemployment insurance, and workers’ compensation premiums as other U.S. firms.”

“Many organizations will just consider the agency’s fees to calculate the cost, but fail to see the value and cost reductions they may give,” Rowles added. “Time to hire is a significant element in determining how much an open job might cost an organization. Due to decreased production and the diversion of resources, the longer a post is unfilled, the greater the cost. Working with a hiring agency may aid in reducing the time to recruit and the loss of production.”

The belief that employing a personnel agency is too costly to be worthwhile is one of the most pervasive misunderstandings about doing so. Why pay more for recruitment services if you can acquire an employee yourself? Using a recruiting agency might save your organization money in the long term.


How to work with a personnel firm

Are you ready to engage a personnel agency? With the assistance of our professionals, you’ll be able to find the ideal person with whom to begin a fruitful business partnership.

Find the right company.

Before you can discover great personnel, you must choose the appropriate personnel agency for your organization. Leverant stressed the need of locating a firm with an outstanding reputation for adhering to ethical business practices.

What is a Personnel agency?

“Be careful to deal with a respectable company that takes pride in the workers it sends,” he said. “This involves doing reference checks and ensuring that all of their workers’ credentials have been validated, among other things. You should also ensure that they have the appropriate insurance coverage, including general liability and workers’ compensation.

As with any business interactions, a personnel agency must provide you value in order to justify the expense.

“Sit down with a personnel agency and determine whether they can provide value to your business,” said Rowles. “As a small company, the value of each person and the costs involved with recruiting are multiplied, therefore… select a firm that sees [your organization] as a business partner, not a customer.”

Similarly, if you decide to utilize an on-demand employment platform instead of a typical personnel agency, you should verify reviews and ensure that the site is trusted by other company owners and employees before signing up or making any payments.

Be clear about your needs.

Good personnel agencies want to help you locate the greatest employees for your business, but they won’t be able to do so if you don’t communicate clearly and completely about your organization, your position, and the sort of candidate you’re seeking.

Specify any company regulations (dress code, hours, breaks, etc.) to provide the personnel agency representative a sense of your company’s culture and the kind of individual who might thrive there.

“Let the recruiter know when you believe you have properly stated your requirements,” the author added. “He or she will immediately begin the hunt.”

Check over the legal aspects.

Depending on the sorts of roles a personnel agency will help you fill, verify that employment-related legal requirements, such as worker classification and payroll taxes, are addressed. Leverant highlighted that for temporary and temp-to-hire positions, the personnel agency is the official employer for tax reasons; thus, the agency should ensure that the individuals you use are, in fact, employees and not independent contractors.

“Furthermore, you should check the existing contracts to verify that indemnity clauses are in place, ideally a ‘dual indemnification’ language that covers both parties from any problems,” Leverant said.

Maintain a good relationship.

It may take some trial and error to discover the proper personnel agency for your business, but once you’ve found one that offers exceptional service and competent employees, stay with it. In addition, discussing new employees with your agency’s representative might aid both you and the organization in future searches for talent.

What is a Personnel agency?

Brustein noted, “whether you use on-demand personnel solutions for unexpected requirements or conventional personnel solutions for known needs, you should always use personnel agencies with a track record of dependability so that you can concentrate on expanding your company.”

Tips for Job Seekers on What You Need to do

1. Choose the right specialized personnel agency

Not every employment agency is same. Before committing to the relationship, spend time getting to know the other person. Ensure that it is prepared to assist someone with your professional profile and objectives. Determine if the personnel company is generic or industry-specific. At Robert Half, the biggest specialty personnel agency in the world, we provide several possibilities in a variety of industries.

Will there be costs if you are put in a position? That is contingent on the personnel agency. Robert Half, for example, does not collect fees to represent job candidates.

2. Get registered with the agency

You will send your CV and cover letter to the majority of hiring companies. Once these papers have been reviewed and accepted by the agency, you may be requested to participate in skills testing and an interview with one of their recruiting specialists so they can learn more about you. Then, they may assist you with enhancing your CV, preparing you for interviews, and informing you of local hiring trends.

3. Treat the interview seriously

Approach the interview like you would any other job interview. The objective of the employment agency is not to interrogate you, but rather to determine which opportunities are most suitable for you.

Ensure that you are well-dressed, well-groomed, and well-prepared even when connected remotely. You should be prepared to discuss your job history, work habits, career goals, and preferred workplace culture. If a hiring agency is considering you for a job at a certain firm, do research about the organization so that you may ask pertinent questions.

4. Decide if you want temporary or full-time work

Employers often use personnel services to locate people for temporary or project-based employment. Others are seeking to engage full-time workers. In addition, the number of temporary-to-full-time roles is expanding. This may be the best of both worlds for many individuals, allowing the company and applicant to get to know one another before making a longer-term commitment.

Specify if you want temporary, permanent, or temporary-to-permanent work. This is beneficial for you, the recruiter, and the hiring firm.

5. Let the job search begin

The recruiters will be able to represent you with more than just your CV after the interview. They will have a comprehensive understanding of your hard capabilities, soft skills (particularly communication skills), short-term work aspirations, and long-term career ambitions.

To this point, the procedure sounds a lot like applying for a job, which is accurate. However, after the agency has established that you are a legitimate candidate for placement, it will utilize its industry relationships to hunt for vacant opportunities that match your credentials and interests. Recruiters with extensive industry relationships and knowledge of unadvertised job vacancies are often well-connected.

6. Keep making yourself marketable

Utilize the many professional growth and training options provided by the leading personnel agencies while you wait for a response. It’s a fantastic method to increase your work chances and set yourself apart from other candidates. For example, Robert Half offers more than 8,000 courses and online reference resources, as well as free continuing professional education and program credits.

7. Respond as quickly as possible

If your agency approaches you with an available job, do not delay in responding. You don’t want to lose out on a great chance, since there are a number of positions that need immediate filling. Once your recruiter identifies a possible match, they will normally set up an interview between you and their client to assess whether the position is a suitable fit.

What is a Personnel agency?

Some personnel services may negotiate your compensation and other conditions of employment. They may even handle all the necessary paperwork, so all you have to do is show up for your new job.

8. Stay engaged with your recruiter

Ask your agency’s representative how you may enhance your chances if you’re not receiving any interviews. Conversely, advise your recruiter if you’ve been successful in securing interviews on your own. There is a possibility that the employment agency has connections at the organization that can assist you in obtaining the position.

It is essential that you remain on top of the job search process and maintain frequent touch with recruiters. Even though the agency will tell you when a suitable position becomes available, it is appropriate to check in with your recruiter every two weeks.


A personnel agency is a business that helps other businesses find the best employees for their company. In today’s world, we see a lot of people out of work and looking for employment. A personnel agency saves time and money by finding the right employee for your business. They do this by having a network of people and companies they can call on to help with their jobs.

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Pat Moriarty
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