If you have a role to fill at your organisation, your first instinct might be to turn to a recruitment firm or a staffing agency. But which one do you need?
Although the terms ‘recruitment’ and ‘staffing’ are sometimes used interchangeably, there are actually some significant differences between the two practices and how they’re used.
Whether you need to call on the services of a recruitment agency or a staffing firm depends on the nature of the role(s) you’re hiring for, how quickly you need help and various other factors.
In this article, we’ll review the differences between recruiting and staffing to help you decide which option is more appropriate for your organisation.
Table of Contents
- What is a staffing agency?
- What is a recruitment agency?
- Staffing vs. recruiting: Key differences
- Staffing agency vs. recruitment firm: Which one do you need?
- What about RPO?
What is a staffing agency?
A staffing agency is a company that acts as an intermediary between an organisation with roles to fill and candidates who are looking for work.
Staffing agencies can help companies to fill positions very quickly because they already have a database of pre-vetted candidates to draw from and can simply match them to the positions they’re most suitable for.
Staffing agencies are typically used to fill short-term roles and are more commonly employed by companies looking for either unskilled labour or candidates with very specific skills.
Staffing agencies generally invoice their clients each month for the cost of the hourly wages of each worker, plus a markup for the agency’s services. For example, an agency may pay a worker £10 for every hour they work for your company, but bill you £15 per hour for each worker.
Staffing agencies are sometimes referred to as staffing firms, staffing companies, temp agencies or temporary employment agencies.
What is a recruitment agency?
Recruitment agencies (or employment agencies) also act as a go-between for employers and job-seekers. However, they are more often used to source candidates for permanent roles, which means the process is typically longer.
A big part of a recruiter’s role is to build up their own network of qualified candidates — which means they may already know someone who’s suitable for your open role.
They also source candidates directly by posting online job ads or through professional networking sites like LinkedIn. Using a recruiter rather than managing your recruitment internally means you can get your job openings in front of a lot more people.
Once a recruitment agency has identified a list of suitable candidates, they will screen them and interview the strongest players before introducing a select few to your company. This means that as a business, you don’t need to deal with the early stages of the recruitment process.
Most recruitment agencies operate on a contingency basis, which means that you’ll pay them a fee based on a percentage of the candidate’s salary once they’ve successfully placed them in a role.
Staffing vs. recruiting: Key differences
Recruiting and staffing both involve using an external agency to find candidates for a job, but they are not the same thing. Here are some of the key differences between the two practices:
1. LONG-TERM VS. SHORT-TERM HIRES
Staffing agencies are typically used to fill short-term, temporary positions. They’re a good option if you need to urgently replace a staff member who left suddenly, or if you need additional staff for a one-off event.
They are also often used by seasonal businesses to provide extra support during busy periods. It’s not uncommon for workers to continue working for the same staffing agency for a long time, performing work for several different companies through the agency.
Recruitment agencies, on the other hand, are more often used to recruit candidates for permanent positions. They aim to source and attract employees who will add value and contribute to the company in the long term.
2. SENIOR VS. ENTRY-LEVEL POSITIONS
Although it’s not always the case, staffing is often used to fill entry-level positions that require little to no specialist training or onboarding process. In fact, one of the biggest advantages of using a staffing firm is that they can quickly fill a large number of low-skill roles because they work with large pools of job seekers who are ready to start work straight away.
By contrast, recruitment firms are usually used to recruit for more senior roles, including C-Suite positions. For these roles, recruiters often headhunt passive candidates, who are already working in other roles but are open to hearing about new opportunities.
This can give you access to top talent, even when these professionals are not actively looking for a new job.
3. SKILLED VS. UNSKILLED LABOUR (OR NICHE SKILLS)
Recruitment firms can be used to source highly skilled candidates because recruiters are able to get their job ads in front of large talent pools.
Staffing agencies, on the other hand, are often used to fill ‘unskilled’ roles, such as service staff or labourers. However, this is not always the case: some staffing companies specialise in particular industries, which means they are able to quickly find temporary staff with niche skills.
According to the American Staffing Association, over a third (36%) of staffing employees work in industrial sectors, with 24% in clerical or administrative roles, 11% in engineering, information technology and scientific roles, and 8% in healthcare. Around one-fifth (21%) work in professional or managerial roles.
4. LONG VS. SHORT RECRUITMENT TIME
The advantage of working with a staffing agency is that they can usually find casual or temp workers very quickly. Recruiting through a recruitment agency is usually a slower process, due to the more complex nature of the roles that they are usually used for.
Plus, even when you have successfully hired a new employee through a recruitment agency, you may have to wait for them to complete their notice period at a previous job before they can start working for you. This means that they may not be able to begin working for you for several months, especially if they are in a senior position.
With a staffing company, however, workers are usually able to start work straight away. This means that it could be the best option if you urgently need staff, especially for lower-level or low-skilled roles.
5. DIFFERENT PRICING MODELS
Staffing agencies usually bill their clients monthly for the work performed by their workers. They also add on their own fee, which could be anywhere from 25% to 100% of the worker’s hourly rate.
Recruitment agencies, on the other hand, usually charge a one-time fee once they have successfully placed a candidate within your organisation. This is usually between 10% and 30% of the employee’s annual salary — which means it can be a large sum, especially when you’re hiring for senior roles. However, unlike with a staffing agency, there is no ongoing cost once that fee has been paid.
Some recruiters may agree to work on a retainer basis, which means that the client pays them all or part of their fee in advance, with the remainder payable once they have successfully placed a candidate.
Staffing agency vs. recruitment firm: Which one do you need?
Whether you need to use a recruitment firm or a staffing agency depends on your situation. You may even need to use both at the same time if you have different positions to hire for.
WHEN SHOULD YOU USE A STAFFING AGENCY?
You may decide to use a staffing agency if:
- You need to make a lot of hires quickly
- You’re hiring for entry-level or low-skill positions
- You need additional staff for a one-off event
- You’re approaching a busy season and will need extra staffing
- You need workers for short-term or temporary work
- Training for the role is minimal
WHEN SHOULD YOU USE A RECRUITMENT FIRM?
A recruitment agency might be the right choice if:
- You need to hire a permanent full-time employee
- You don’t need to hire urgently and would prefer to wait for the right person
- You’re searching for candidates for high-level positions such as management or C-Suite
- You want to hire for culture and skills rather than cost
- You want to draw in high-level talent from your competitors
What about RPO?
If you’re searching for employment solutions for your business, you may have come across the term ‘RPO’. This stands for recruitment process outsourcing, and is an arrangement that involves a company outsourcing all or part of its recruitment process to an external agency.
Unlike traditional recruitment agencies, RPO providers work with their clients over a long period, which means they have the time to learn about a company and can take a more hands-on approach. Using RPO for your recruitment is a long-term strategy, which involves building a pipeline of active and inactive candidates that you can return to when a suitable role opens up.
If you want to take a more strategic approach to hiring, CXC’s RPO solution could be the answer. We work with each one of our clients to create a bespoke solution that helps them to meet their recruitment goals.
Want to find out if this is the right solution for your business? Get in touch to learn more.