Why are Staffing Agencies Bad?

Anyone who has ever applied for a job online knows that staffing agencies are bad, or at least they get a bad rep. Why is that? Why does everyone seem to think that staffing agencies are bad and should be avoided as much as possible.

The reason is simple: dishonesty and low pay.

While there are many details that we can go over, the truth is that all of the negative press surrounding staffing agencies and the main reason they are universally considered bad is that they operate on the basis of paying as little as possible and being as dishonest as legally possible.

Let’s go into some more details and do a step by step examination of why staffing agencies are bad and then look at some alternatives you should consider.

Does the Staffing Agency Offer Real Work?

The first reason that staffing agencies get a negative reputation in the business world is they don’t offer real work. Most staffing agencies only offer temporary work. The best staffing agencies will be up front about it. The majority of staffing agencies won’t be up front.

Major staffing firms all around the country routinely lie to candidates to get them to accept jobs. They lie about the type of work, the pay, and the duration of the role.

Read job boards and forums and you will see people recount over and over stories about recruiters from staffing agencies mislead them.

Most staffing agencies are temp agencies. Yes, temp agencies still exist .They majority of their work is temporary in nature.

Not only that, but staffing agencies are often found to not pay employees. There are the straight illegal staffing agencies that hire people and then never pay them. These are not as common as they are breaking the law and eventually are caught.

More common are the staffing agencies that operate in a grey legal zone. These staffing firms withhold their temporary employees pay and dock them for spurious expenses that are often in a gray area.

Beyond the egregious issue of not paying employees, or deducting money from them for expenses that they never were informed of, is the issue of misrepresentation of the job.

Staffing agencies are notorious for telling people that a job pays more than it does, or is a permanent job while in fact it’s just a temporary job.

Recruiters are directed by the owners of staffing agencies on what to tell candidates. Many recruiters are not even aware of the real pay or the real length of the assignment.

If the recruiter is working without real information, then it’s something that isn’t their fault. However, that doesn’t change the fact that the

Are Staffing Agencies All Temporary Work?

That’s a great question. And this question isn’t one that you’ll get an easy question to. Many staffing agencies like to pretend that they offer full time, permanent roles.

But the truth is that staffing agencies make more money (way more money) by keeping their employees on temporary staffing assignments.

This is why there are people who spend years on one random assignment after another. Their temp agency is not incentivized to ever let them become a permanent employee.

I covered this in more detail in  a prior article, but let’s quickly review the financial benefit for a staffing agency to keep their temporary workers as full time temps and never put them in a permanent role.

The agency bills a company a rate. Suppose they are hiring an office manager. They might charge that company $39 an hour. They then turn around and pay the temp $18 an hour to work. The profit (per hour, depending on the cost of burden) is anywhere from $17 to $20 an hour. The recruiter will make around .50 cents to a close to a dollar per hour….and the agency partners and owners make the rest. So, for every hour a temporary worker works, the agency profits 18/19 per hour average.

If they were to place that office manager as a direct placement, it would be a flat fee. This might be several hundred to a few thousand.

You can see then why temporary workers are preferred. A temporary worker will profit a staffing agency hundreds of dollars (or thousands in the case of Nurses) a week.

Why Are Staffing Agency Contracts Bad?

This topic is sort of related to why staffing agencies are bad to work with. It’s because their contracts are designed to prevent you from becoming a full-time employee with the companies you work with.

Staffing agencies make more money by keeping people on long term temporary roles. They never want to make someone a permanent employee. In order to do this, they design staffing contracts that are designed to have prohibitively expensive buy out clauses.

This makes the companies that hire temps less likely to want to bring them on full time.

This of course is bad for someone looking to get a job as an adminsitraive assistant.

For example, a company that is hiring a temporary worker is paying a fee to the agency (or else the agency is taking a cut of the employee’s salary). If the company wants the person to work full time for them, they will have to pay a very expensive fee.

In most cases companies prefer to simply keep the person on indefinitely as a temporary worker or just have the staffing firm fire them and send over a new worker.

The benefit to the indefinite temporary worker is that they will never have to be paid retirement benefits, health insurance, or be given any of the real benefits that full time employees are legally entitled to.

This is why it’s always preferable to go directly with a firm or else deal with a recruiter who has a good reputation and only works on real direct hire roles or real temp to hire openings.

Alternatives to working with a Staffing Agency

There are three alternatives to working with a staffing agency.

Working Directly with Companies Hiring

The main alternative to working with a staffing agency is to find a job directly with the company.

This is becoming harder and harder. Why? Because companies are unable to fill roles due to the enormous time required to review applicants.

Companies also are not skilled at recruiting. External recruiting agencies are skilled, and they have recrutiers who know what to look for in a resume, but a company that is simply looking to hire  on their own is not going to have the skill set to recruit effectively.

Applying To Job Postings Online

First off, many of the ads that you see posted online are going to be posted from Staffing Firms. They might disguise the fact that the job is offered through a staffing firm, but this is a major way

If you were to submit your resume to a job portal, odds are that no one is going to read it. If you are sending in a resume to an online job posting site, this too is a long shot. The problem with job posting sites like Indeed, Craigslist, ZipRecruiter and the rest is that they are overwhelmed by applications. Your resume will be one of hundreds if not thousands.

Just because someone is not qualified for a job, it doesn’t mean that they don’t apply for those jobs.

Also, when you are applying to job postings online, quite often the job postings are fake. There is an epidemic of scamming and fake jobs being posted online. Quite often these jobs are posted in order to scrape resumes, or even steal personal information.

Working Directly with Executive Recruiters

A good approach is to never trust the agency, always trust the recruiter. There are many good recruiters who are honest with their candidates. They don’t burn bridges by lying and they have good reputations.

You should find them on LinkedIn, and if they don’t have a profile or if they have a profile which indicates they are an outsourced recruiter, then stay away.

Even if an agency claims that they do executive placements, the truth is that most make their money from low paying temporary roles. If you vet the recruiter, then you’ll have a better chance of making a good connection.

Did that recruiter go to a good college? Do they look like they work on professional roles? Do they have good LinkedIn connections? Do they have positive reviews online? Do they have negative reviews online?

If you communicate with them, do they respond quickly? Do they sound honest? It’s one of the reasons that I only suggest connecting and working with recruiters who you can vet and review on LinkedIn. You’ll see their face, hear their voice (once you speak with them) and can establish their bona fides.