What is the difference between a staffing agency and a recruitment company

A staffing company is one that provides staff to other companies, usually on temporary basis. A recruitment company only refers the employee to another company. A recruitment company may provide services like screening and interviewing job applicants, but its work is limited to that of a broker. It earns money by charging a fixed rate or an amount equal to a percentage of the first salary. However, the recruitment company does not act like the employee’s main employer. On the other hand, the staffing company usually does, even if the staffing company does not actually employ the staff! That is, even when the staff doesn’t get paid unless the staff gets employed by another company!

The main difference between a recruiting company and a staffing agency, and the reason why I don’t like staffing agencies, is that staffing agencies continuously take a bite out of the employee’s wages! And it is usually a big bite, usually being a major portion of the employee wages. That is right! The staffing company may sometimes take two-thirds of the wages and the employee only gets 1/3 of the wages paid by the employing company although the employee is doing all the work. But that is not the worst thing about staffing companies. What’s even more unjust is when the staffing company is only doing the work of a recruiting company (it hasn’t formally hired the employee but only finds jobs for the employee) yet it takes a portion of the employee’s every wage!

An example can make this matter clearer: Supposing you need a cleaner for a few weeks. You approach a staffing company that has several cleaners and ask them to provide an employee to do the job. This staffing company has several employees for this purpose. These employees have been hired by the staffing company and get a paycheck whether anyone hires them or not. This type of staffing company earns money by regularly providing employees on short or long term basis and charging a higher rate to the employing company than what it pays the employees. This sort of staffing company pays a fixed monthly salary to workers while charging clients on an hourly, daily, or per project basis. The amount the company charges to clients is far more than the amount it pays workers, often employees working for minimum wage.

Another type of staffing company also does the same work, providing workers to other companies. But it doesn’t hire the workers. Workers only approach them, are interviewed, tested, etc. and then are placed on a waiting list. During this time, the worker is not an employee of the staffing agency and doesn’t get any wages. When another company approaches the staffing agency for a certain type of employee, the staffing agency contacts the employees on waiting list and one of them is sent to the company to work. This sort of staffing company is actually doing the work of a recruiting agency, because it doesn’t hire or pay workers regularly. Workers only get paid when they are hired by another company. But, even though the staffing agency is only acting as a broker/middle person, it still takes a large portion of the employee’s wages, not one-time but out of every single paycheck!

This type of company is in essence a recruiting company but like a staffing company, it takes a portion of workers’ earnings.

The third type of company is an actual recruitment agency. Job seekers approach recruitment agencies, submit their CVs, may be screened and interviewed, and just like the above, the job seeker is referred to companies who have a suitable vacancy. But unlike the staffing agency, the recruitment company doesn’t take a portion of every wage that the employee earns. It only charges a fixed rate and usually the hiring company is the one to pay this one-time amount. Recruitment companies don’t reduce workers’ earnings. Workers’ get their full monthly wages while recruitment companies get a one-time fixed amount.

Of these three types of companies, the second type of staffing company is not a very fair type and companies should insist on dealing with only the first and third types of companies, requiring that those companies doing only the work of recruiting companies get a one-time fixed fee for referring employees and not take a portion of the employee’s every salary.

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Radeya Business Service provides recruiting and employment consultation services. Contact us for CV writing, CV distribution, and career advice.


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