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The TemPositions Group of Companies

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How Does a Temp Agency Work?

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How Does a Temp Agency Work?

Temp agencies are often used by a huge variety of industries. The primary advantage of a temp agency is that companies looking for large volumes of temporary work can be easily connected with the required talent – but over recent years, many such agencies have become even more robust, offering temporary, temp-to-hire, or even permanent jobs, in some cases.

However, there remains some confusion about the precise role of a temp agency – both for clients and for candidates. Clients often wonder what they’re paying for – why not find candidates ourselves? And candidates are sometimes concerned that they’re simply being used, and may be hit with hidden costs, fees, or miss out on benefits of other work.

We’re here to break down the basics about how temp agencies work, both for clients and for candidates.

Infographic - How Does a Temp Agency Work?
Infographic – How Does a Temp Agency Work? (click to enlarge)

How do Temp Agencies Work for Clients?

Here’s the breakdown of how a temp agency relationship works for clients, step-by-step.

1. Client Companies Contact a Temp Agency

The first step is working out exactly what kind of staff you need. Generally, temp agencies will ask for pertinent information about the type of work being done, job descriptions, job expectations, skills required, and so on. After this initial consultation is finished, the process of finding the required candidates begins.

 

2. Candidates Are Identified

Using third-party search tools, as well as in-house databases on contacts, candidates, and recruits, the agency takes the particular requirements of the client company, and begins searching for suitable candidates – candidates who have the required skills, experience, and knowledge to perform ably in the given job position.

This is one of the most important services that temp agencies provide – searching for and finding desirable candidates isn’t always easy, and most agencies have in-house databases and dedicated staff who can ensure that the process goes as smoothly and efficiently as possible. This decreases the time taken for the hiring process, which allows open positions at client companies to be filled quickly and effectively.

Once candidates are identified, they are contacted and interviewed.

3. Contact and Interviews

The temp agency reaches out to the appropriate candidates and informs them about the job opening. Generally, candidates who are new to the agency are asked to undertake a battery of tests that will ensure they are suitable for work, after which the agency will usually begin asking them to come in for a physical interview, or an interview conducted over the phone or through an online interview via Skype.

Interested candidates are then spoken to, and vetting and background checks are done to ensure that they are not misrepresenting their skills. If everything checks out and the candidate is a good fit, they are then placed by the temp agency into the position open in the client company.

4. Placement and Remuneration

Once the employee is placed in the client company, they begin work. Technically, the worker in question is an employee of the temp agency – which is why they deal with remuneration, work scheduling, taxes, and other basic employer tasks.

Work schedules are made per the length of time required for an assignment, and changed depending on client requirements. When the period of work concludes, the worker is removed from the client company, and then begins seeking other work.

During the contract period, the client company pays the temp agency a set rate per worker, depending on the hourly wages and fees associated with that worker, along with a markup that’s passed on to the agency.

5. Understanding Markups

Markups are what often make people question the need for a temp agency – why pay $32 an hour to a third-party temp agency when an employee is only making $24 an hour?

Well, the fact that the agency is responsible for the worker, their performance, and for finding and placing the worker in the appropriate position is the primary reason that they make a surplus – after all, great service isn’t cheap, and good candidates can be hard to find fast.

In addition, $24 an hour isn’t really $24 an hour. The temp agency is responsible for a number of taxes and fees including payroll taxes, paying the recruiter, company rent, paying for ad postings along with employee insurance and benefits. Combining all of these costs is how the temp agency creates the appropriate markup for each client.

Good service and fast responses aren’t free. Temp agencies aren’t cheap – not as cheap as hiring workers yourself – but the opportunity cost of work being delayed and other issues can often hurt your bottom line.

How do Temp Agencies Work for Candidates?

Here’s how a temp agency works from the candidate side.

1. Candidates Apply to The Temp Agency – Or Are Contacted Directly

Often, large temp agencies have a large pool of candidates already, as many professionals submit their information to them directly in hopes of finding good temporary work assignments. These are usually the first resources that agencies will go to for candidates. If there are no appropriate candidates, other third-party HR resources can be used to find appropriate persons for any given position.

Regardless of the way that a candidate is found, the candidate will be contacted by the temp agency, and informed of the position that is available to them. The candidate will perform basic tests if necessary, and then be vetted and interviewed to ensure they are appropriate for the task at hand.

Once interviewed, all candidates will be placed in a database for consideration for future work.

One misconception that some candidates have is that they must pay a temp agency. We’ll say it in bold:

 

They make money by profiting off of a client’s immediate need for short-term work – by providing your services to the agency, you’re helping them make a profit. You absolutely never should have to pay for job placement. If you do, you’re being scammed.

2. Candidates Are Placed in An Appropriate Position

This may take some time – depending on the skills of a candidate. Once an appropriate position is open, a candidate will be contacted by the temp agency if they are determined to be a fit.

The agency will provide the candidate with all of the pertinent details of the job – required skills, dress code, location, requirements, scheduling, and so on. Once the candidate agrees to the job, they are sent to the appropriate location to begin work.

3. Candidates Are Handled by The Agency For The Duration Of Work

When you work for a staffing corporation, you’re not technically employed by the client company. The temp agency that hired you will take care of payments, taxes, scheduling, and other basics, as well as handle complaints – both from workers and from client companies. The temp agency also handles the candidate’s benefits including insurance, vacation, retirement plans and child care assistance.

The worker will show up to the specified location, begin work, and continue in that manner until the conclusion of the duration of their work term, receiving payments, schedules, and so forth from the staffing agency.

4. At the End of Work Term, Candidates May Inform Temp Agencies of Further Work Needs

A candidate/temp agency relationship doesn’t usually end after just one job. If performance was good, and a candidate makes it clear that they are seeking more temporary work, another assignment may be found relatively quickly, and the candidate may be placed in a new position at a new client company. The agency only makes money if the temp is out working so their goal is to find the temp as many jobs as possible. The temp can aid in this process by keeping the agency updated on their availability so the agency can notify them when a suitable position becomes available.

Doing so allows a temp company to continue providing work to good candidates, and helps candidate, earn a steady income.

Conclusion

Hopefully, this article has helped clear up how a temp agency works. By providing short-term, skilled work for clients in need, they make a small profit, which allows them to find appropriate candidates quickly and easily.

Temp agencies aren’t magic – they can’t replace your HR department, and they’re not usually alternatives to finding full-time employees. But for those times when clients need large amounts of work done in a short time-frame, or when times are tough and many talented folks who are in need of part-time work are seeking employment, temp agencies can be very helpful indeed.

For more information, feel free to check out our FAQ’s

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How to Stand Out from the Crowd and Get the Job You Want

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Hiring managers receive resumes from lots of applicants. Making yourself stand out helps increase your odds of getting to the next step—an interview.  But how do you do that?  First, read the job posting and fully understand the experience and skill requirements. Then tailor your resume to highlight those specific points. With companies using automated software as the first step in their process, if your resume does not match the job description closely enough, it may never see the hiring manager’s desk.  Include a cover letter as well which outlines why you are the perfect choice for the spot. Reference similar roles you played in your career which demonstrate you have the skills and experience required.  That should get you an interview.

In preparation for the interview, research the company. Be sure you understand what they do, and think about how the role you are interviewing for will help them operate better.  Research a list of standard interview questions and be sure to prepare well thought out answers to each of them. Also prepare some questions to ask at the end of the interview; that shows you have been thoughtful about the position.

On the day of the interview, arrive a few minutes early to show enthusiasm, dressed to fit the company culture.  When in doubt, always go conservative. You could lose a job for being underdressed, but will rarely lose one for being overdressed. If your nerves are an issue, take some deep breaths and relax yourself before stepping into the building. If you notice your hands getting sweaty, ask to use a restroom and give them a quick rinse before shaking hands. While interviewing, make eye contact and be yourself. Answer honestly, because good interviewers can sense when applicants are not being truthful.  And at the end of the interview, consider closing with a question such as “Did you hear anything today that concerned you about my fit for the position?”  That gives you a chance to try to change their mind.

After the interview, make sure to send a thank you note (email is ok, a letter mailed that day is even better, since few people do it anymore) and then follow-up by email within a week, if you have not heard back, asking if they need any further information.

Then sit back and wait for the offer!

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The Rise of the Robo Financial Adviser

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Now you’re playing with power – 21st century investing with Robo-Advisers

The robot uprising has been quieter than expected. In fact, few even heard it coming.

In recent years the unemotional, efficient analyses of so-called “Robo-Advisers” has pushed to the forefront of investing services. Can the investing acumen of an entity comprised of programming code outperform traditional advisers?

In this article we’ll seek to answer this question through a review of the services offered by robo-advisers. We’ll consider the behavioral finance advantages to this new method and how engaging in this practice illuminates your own risk tolerance. Finally, we’ll review the costs involved and how robo-advisers can accomplish retirement goals.

A restriction on impulse

When you interact with a robo-adviser service you’re plotting a course then engaging autopilot. This has a distinct advantage that’s less evident with traditional investing. When you’ve committed to a set plan upfront you’re far less likely to deviate. Robo-adviser services seem to have the unintended benefit of countering the problems of behavioral finance.

The emerging field of behavioral finance endeavors to explore the notion that you, the investor, are your own worst enemy. In the past traditional economics has been the tool in understanding how and why business, markets and individuals operate as they do. Today this is changing.

Experts have incorporated cognitive and behavioral psychological theory to more clearly understand why rational decision making can so dramatically breakdown. It is these breakdowns that can cause loss of personal wealth and at it’s worst decimate entire markets. Irrational thinking leads to economic problems.

Consider the findings of a paper published by The Research Foundation of CFA Institute Literature Review. The author explains, “one aspect of the discussion about rational and irrational investors that is important to consider is the extent to which professional traders and money managers are subject to the same behavioral biases that are more commonly discussed in the context of individual (typically assumed uninformed) investors.” By removing humans, including yourself, from the process you’re creating a barrier to this problem.

You’re the programmer

Many mistakenly believe that opting for a robo-adviser takes away their financial control entirely. This is untrue.

While the robo-adviser will generate a specifically curated portfolio of investments it will do so in response to your risk tolerance. You are driving the major parameters. It is from this point that the robo-adviser will begin working.

It can be argued that this in fact puts more agency in your hands. As you are guided through a series of questions about investment preferences you’ll come to an understanding of your own psychological profile. The result: you’re making decisions without the implicit or explicit influence of an “expert.” Instead of market fads or alluring speculative trades, your plan will be restricted to more pertinent factors…

The primary attributes:

  1. Age
  2. Income
  3. Single/Duel income
  4. Dependents/No Dependents
  5. Current savings
  6. Risk tolerance

The irony is that a robo-adviser will put you in the picture more than a traditional money manager will. There are no commissions or motivations to push certain investment products. The conversation is focused on where you are financially and where you want to go. The questions are answered in private without uncomfortable silences or the influence of needlessly complex marketing materials.

Minimizing expenses


Robo-advisers offer among the lowest fees. The process is streamlined and efficient thereby rooting out costs that erode wealth in the long-term.

The reduced expenses also come from a cost efficient selection of funds. Robo-advisers maximize returns by restricting the suggested mutual funds, ETFs and bonds to those with the lowest expense ratios. The benefit of this practice is most visible over a long-term horizon where the magic of compound growth can amplify wealth. In many cases these annual ETF costs will range from 0.05% to 0.75%. Be cognizant of your exposure to costs. Some annual fees will also apply. These differ from among robo-advisers but you can expect to pay .15% to .75% annually as a service fee.

Retirement in the digital age

Robo-advisers are up to the task of retirement planning because it is a game of consistency and discipline. The automatic rebalancing option offered by many robo-advisers can help achieve the “slow and steady” mentality that is so crucial for long-term investors. Markets will rise and fall but the machines will not respond emotionally even if you do. This is to your benefit.

The algorithms involved in robo-advising are also optimized for tax loss harvesting. This complex practice is simplified with the aid of automation. Those planning their retirement will find enormous value in this cost-cutting measure.

A robo-adviser is an excellent option for any investor. The simplified, low cost approach is perfect for beginners and high net worth clients alike.

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Will Tipping Soon Be a Thing of the Past?

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Let’s face it. You always feel a little embarrassed when you pull out your phone at the restaurant to calculate the percentage for how much tip you need to leave. But, it appears that all this anxiety about percentages and fraction that your feel when you get the bill at the end of the meal might soon become a thing of the past.

Tipping is a distinctive part of America’s culture. When the practice of tipping was first introduced by wealthy Americans in the late 19th century, people considered it bribery. But restaurants saw an opportunity there. They could pay servers ridiculously low wages and have the customers pay the rest.

The federal minimum wage for tipped employees is set at $2.13 per hour. So, it’s no wonder that servers across the country rely on tips to make up the majority of their income. But, here’s the thing. More and more restaurants are currently moving away from a tip based model for servers. Waiters are now being paid an hourly wage and restaurants are raising prices on dishes to cover the costs.

The no-tip system is considered either a very good thing for employees or a mere fantasy, depending on who you ask.

Could tipping become a thing of the past? Let’s explore.

Consumers Are Concerned That a No-Tip Policy Will Affect the Quality of the Service They Get

Tipping is supposed to encourage good service. But, does it really make sense? Many argue that tipping doesn’t encourage hard work. The factors that determine the tips’ size have almost nothing to do with the quality of service. We tip more if the waiters tell us their names, draw smiley faces on our check or touch our arm. A large group of people with a considerable bill will leave a disproportionately small tip. Cash tips are smaller than credit card ones. And the list goes on.

According to one study, quality of service has an insignificant impact on the size of the tip, accounting for between 1 and 5% of a customer’s overall satisfaction. It is, therefore, fairly obvious that letting the customer reward good service does not encourage hard work, considering the size of the tip has almost always nothing to do with the service received. Many restaurant owners believe that by giving servers a decent minimum wage, rather than having customers control their salaries, hospitality will change and for the better.

Tipping Promotes Unfairness

Not only does tipping have almost no impact on the quality of service, but it also creates disparity among workers. Most of the time, the cooks don’t receive a share of the tips. This practice only deepens the disparity of compensation between restaurant workers. Implementing a no-tip system is believed to make compensation fair among all the employees since they all play a part in the customer’s satisfaction.

Getting Rid of Tips Means That You Will Pay Less

One of the first restaurants to eliminate tipping at their locations in certain cities is Joe’s Crab Shack. Servers at Joe’s Crab Shack will now be paid a wage of $14 per hour. This additional expense will be covered by increasing the food’s price by 12 to 15%. Considering that most customers leave a 20% tip, this new policy will not only make servers’ life better but will also make your nights out cheaper.

The Effects of a No-Tip System

Although giving servers a decent wage should be normal, not everybody is happy with the results. Restaurant owners who implemented a no-tip system complained that servers started to leave because their minimum wages were less than their tipped wages.

Part of the problem is that restaurant owners need to raise prices enough to make up for the decrease in income that some of the tipped workers were seeing. But, they are afraid that by raising prices to 30% or 40% they will lose customers. It’s a vicious circle, and many don’t see a way out of it – don’t raise prices enough, and you will lose your staff; raise it too much and you will lose customers.

The no-tip system is still in its experimental phase. Many restaurant owners don’t know how employees and customers will react to it. But one thing is clear: a server’s pay should not be determined by whether or not you have room for dessert.

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Getting Your Resume Passed Recruiting Robots

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If you’re currently looking for a job, you’re most likely facing a tough market. Unemployment rates are high, and people in all kinds of professions are actively looking for work. Today’s job market is a saturated and competitive place. Factors that used to give applicants an edge may not set you apart the way they did in the past. The percentage of Americans with university degrees is at an all-time high of 40.4%, and expected to hit 60% by 2025. However educated, qualified, and motivated you might be, you’re vying against hundreds of other people exactly like you.

If you ask an HR professional or a hiring manager, they’ll tell you that for any given job opening, they may find themselves sifting through as many as 200 applications. Many of the applicants are equally qualified, further compounding the issue. This, of course, is if you’re lucky enough for a human being to actually see your resume in the first place.

Many employers, especially midsize and larger companies, use software to screen out unqualified candidates. This makes the process of shortlisting candidates easier for HR personnel, who might otherwise be overwhelmed by hundreds of resumes. However, for job seekers, this situation isn’t ideal. If you’re applying to a company that isn’t a small local business, your carefully crafted resume may never actually be read.

Whether software is screening out your resume, or it just isn’t catching the attention of an overworked HR professional, these tips can help you maximize the possibility that your resume will actually make it into the hands of a person who will read it.

Optimize Your Resume with the Right Keywords

Most larger companies use software programs to screen resumes. The goal of these programs is to weed out unqualified candidates ahead of time. Unfortunately, these programs aren’t exactly perfect. They’re not human beings, so their abilities are limited by their programming. In most cases, these software programs look for certain keywords that signify that you’re the kind of candidate they’re looking for.

If you’re like most sensible people, you’ve written your resume for humans. However, if you’re going to have a chance in today’s crowded market, you also need to take the machines into consideration. The screening software will be your first barrier, and to make it through, you need the right keywords.

To find the keywords, start by looking at the job description. What words are used? If you look closely, you’ll notice common keywords that are shared between the listings for similar job positions. Job titles and positions often function as main keywords. The company may be screening for someone who previously filled a certain similar role. Having a matching title in your resume can give you a key advantage in getting past the filters. For example, if you’re applying for a “Marketing Director” position similar to your last job, make sure you use those words in your resume. If you’re applying for a job as an “Administrative Assistant,” don’t label your last job as “Secretary.”

It can also help to use synonyms, like common industry acronyms. Using “PR” as well as “Public Relations,” or “OBGYN” as well as “obstetrics and gynecology,” might actually give you a slight advantage. The more you strategically place keywords in your resume, the better.

If you’re concerned that your education and job history don’t contain enough keywords, create a “Professional Summary” section. This is a prime place to shoehorn in some relevant keywords. Skills and tools, like “Javascript” or “Microsoft Excel,” can fit in well here.

Sending a Resume Directly? Get in Early

Not all companies use software to screen resumes for keywords. If you’re applying to a smaller business, you may be able to send your resume directly in an email attachment. Unfortunately, their hiring managers are often inundated with countless resumes, especially in populous areas. This is common when a small business creates a listing on a platform like Craigslist, especially for high-competition positions like Administrative Assistant.

It pays to focus on job listings that were posted as recently as possible– ideally, within the last 48 hours. That isn’t to say that you shouldn’t apply if your dream job was listed a week ago. But as time passes, your chances of having your resume seen will greatly diminish. Even in the absence of screening software, busy managers don’t have time to read through each and every resume when there are over 200 applications in their inbox. If you’re doing it right, you’re tailoring your resume and creating a thoughtful cover letter for each job application.

Don’t Give Up

The level of competition in today’s job market is unprecedented. In fact, government statistics show that quite a few unemployed people have simply given up on trying to find a job. Between unthinking algorithms that weed you out, and hundreds of competitors for a single job position, it’s tough out there. Keep tweaking your resume. Keep experimenting with keywords. Keep sending out as many resumes as you can. By optimizing your resume and applying to jobs as soon as possible, you can maximize the odds of a human being actually looking at your application.

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How Long Will Programming Remain a Hot Career?

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Computer programming isn’t exactly new. There were programmers before the turn of the millennium, but it wasn’t necessarily a well-known job. Over the last ten to fifteen years, computer programming has risen to prominence as one of the hottest careers. Within the job market as a whole, a record number of people are learning to program. From 18-year-old college freshmen choosing computer science as their major, to adults who self-teach using online resources like Khan Academy, it seems like everyone is learning to code.

Programming has quickly become a go-to skill set and occupation for a large swathe of relatively young and well-educated people. The market for computer programmers continues to grow, but will this be true in five or ten years? Programming is hot right now, but it’s important to think ahead. A tech bubble burst or over-saturated market could severely impact the viability of programming jobs as a ticket to financial security. Offshoring also presents challenges to domestic workers in North America and Western Europe. With these issues in mind, it’s worth asking what the future of programming will be like.

Learning to Code is Easier Than Ever

Computer programming is useful and interesting in its own right, but there’s another reason why so many people are so eager to learn this skill. Job seekers in 2016 face a difficult and uncertain employment market. Competition is high, many graduates face student loan debt, and millennials are increasingly unable to pursue things like home ownership. In this tough economic climate, computer programming jobs stand out as one of the few remaining professions that can essentially guarantee a comfortable middle-class lifestyle.

Simply put, computer programming pays quite well. According to the United States Bureau of Labor Statistics, the median annual wage for computer programmers in 2014 was $77,550. Even the bottom 10% of programmers earned a respectable $44,140. For millennials facing high student debt and a job market dominated by low-paying service industry positions, it’s no wonder programming is so appealing.

Not only does computer programming pay very well, but the barrier to entry isn’t all that high. Over two thirds of IT workers do not have a four-year college degree. Of those that do have a degree, 38% majored in something other than mathematics or computer science. Programming and IT require skills that can be developed independently, and these jobs can be accessible for capable individuals without a relevant formal educational background.

That isn’t to say that it doesn’t require a certain degree of analytical intelligence and creative problem solving skills. However, for a reasonably bright person with the motivation to take it seriously, there are plenty of resources out there for aspiring programmers to self-teach. Online courses are available from sites like Khan Academy, and even MIT have free open coursework available. For those with a bit of money to spend, programming “boot camps” provide an immersive educational experience to bring amateurs up to speed.

Could the popularity of computer programming be its undoing? Recently, an oversupply of recent law graduates has left many JDs underemployed and burdened by substantial debt. Could the same thing happen with programming? It’s difficult to say. However, the most obvious threat to programmers’ job security isn’t an over-saturated domestic market. Instead, the threat comes from overseas.

The Problem of Outsourcing

You may have heard of the phenomenon of the “digital nomad,” millennial professionals who work remotely from home or while traveling. One facet of programming’s widespread appeal is that in many cases, it can be done remotely. Quite a few professional programmers make a good living as freelance consultants, or work remotely full-time for their employer. The upside of this is flexibility, but there’s a darker layer beneath: offshoring and outsourcing.

In many developing nations, like India and the Philippines, there are quite a few very talented programmers. In many cases, programming work can be outsourced to these overseas workers. Because the cost of living is so much lower in these nations than in Western Europe and the United States, the workers can charge quite a bit less while still achieving the same degree of purchasing power. This boon to overseas workers presents a serious challenge for their counterparts in the US. An American freelance web developer may charge $50-100 per hour, while someone in India can accept $15 per hour for the same work.

Along with offshoring, there’s also the matter of H1-B visas. The H1-B program is designed to bring in skilled workers to fill job positions for which employers cannot find a qualified US candidate. However, many would argue that H1-Bs are being abused in order to reduce the cost of labor, to the detriment of US citizens.

How Long Will The Programming Boom Really Last?

“Learn to code” is common career advice, especially among educated 18-35 year-olds. But have we reached peak programming? It’s difficult, if not impossible, to predict the future. However, the US Bureau of Labor Statistics did release some future projections at the end of 2015. The BLS predicted that although IT jobs in general will grow 12% by 2020, programmers will be the exception. In 2014, there were 328,000 computer programmers in the United States. Over the next 10 years, this number is predicted to decline by 8%. That’s over 26,000 jobs.

However, while the market for general programmers might suffer, the market for software developers is projected to increase by 17%, the equivalent of 186,600 jobs.

Is Learning to Program Still Worthwhile?

Although the job market for programmers may decline somewhat over the next decade or so, it’s still a hot job field today. Resources like Khan Academy and boot camps have helped make programming skills accessible to almost anyone with the motivation and intelligence to learn how to code, and skill is often valued over formal education and college degrees. Computer programming and other IT occupations provide something that’s often hard to come by in today’s job market: a good middle-class salary and financial security. If you’re interested in programming, or looking to switch careers into something more profitable, learning how to code is a very viable option.

Looking for a career in programming? CompuForce is the perfect resource to aid in your transition.

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