Why Do Companies Hire Through Staffing Agencies? 6 Times When it Makes Sense

Paige Smith

Staffing agencies help businesses of all kinds find new employees. In the right situation, using a staffing agency can reduce your recruiting workload, speed along the hiring process, and pair you with top talent. 

Keep reading to learn more about the state of hiring for small businesses, when a staffing agency makes sense, and how to find the right one. 

Why do companies hire through staffing agencies? 

Companies hire through staffing agencies for a variety of reasons. Some enlist agencies to hire temporary employees for seasonal roles or transitional periods. Other businesses rely on agencies to recruit candidates in specialized fields.

The bottom line: many business owners want more help with recruiting and hiring. After all, hiring can be complicated and time-consuming, not to mention unsuccessful. According to a 2023 Employee Engagement Report from SCORE, 60.7% of business owners said their top business challenge was hiring the right talent. 

Over half (56%) of the business owners surveyed in the National Federation of Independent Business’s monthly Small Business Jobs Report reported hiring or trying to hire in February 2024; of those, 91% reported finding few or no qualified candidates for the positions they were trying to fill. 

The process of finding qualified candidates—writing job descriptions, distributing job ads, and reviewing applications—can be a big lift for busy business owners. Then there’s the work of scheduling and conducting interviews, and filling out hiring paperwork. Staffing agencies take all of those tasks off a business owner’s plate. 

Learn more about how staffing agencies work. 

6 times to consider working with a staffing agency

Like any business resource, staffing agencies aren’t a one-size-fits-all solution. However, using an agency can help in certain scenarios. Here are six times to consider hiring a staffing agency:

1. You haven’t had success finding great candidates on your own

If your last several attempts at hiring have been unsuccessful—either because you couldn’t fill your open positions or because the employees you hired didn’t work out—it might be time to consider a different course of action. 

When you’ve exhausted your resources trying to find prospective employees, using a staffing agency can give you access to a wider array of talented candidates. The agency will tap into its network to find people who have the qualifications, experience, and availability you need. 

2. You need to fill seasonal, temporary, or short-term positions

As a business owner, it can be challenging to find employees looking for temporary or part-time work, but in staffing agencies flexible gigs are common. According to data from the American Staffing Association, staffing companies in the United States hire over 14.5 million temporary workers every year, one in five of whom say they choose staffing work specifically because of its flexibility. 

If you need seasonal support for your operation, short-term help with a specific project, or temporary employees for a last-minute event, a staffing agency can match you with qualified job candidates. 

3. You want to try a new role without committing to long-term

If you don’t end up having the budget or need a long-term role, the cost of terminating a permanent hire—in lost productivity and payroll expenses—can be high. That’s why staffing agencies are a good option if you want to test a position in your workplace first. 

Maybe you need more support for an upcoming growth initiative, for example, but don’t know if you can parlay the role into long-term work yet. A staffing agency can pair you with a skilled employee in a temp-to-hire position. 

The new hire will have a set start and end date, with the possibility to extend if all parties are in agreement. Just keep in mind that you may have to pay the agency a contract buyout fee to hire their worker permanently. 

4. You don’t have time to devote to hiring

If you don’t have the time or mental energy to devote to hiring, you might be tempted to rush through it or cut corners to secure someone fast. That’s when a staffing agency can help. 

An agency can shoulder the burden of hiring, so you can prioritize other work, like interacting directly with your customers or strategizing for growth

5. You’re growing fast and want more flexibility to hire on-demand

Hiring an agency on retainer gives you an opportunity to develop a close working partnership and reach out on an as-needed basis. That might mean getting a temporary employee for a few weeks to fill a hiring gap or hiring someone on a short-term contract to assist with a specific project. 

6. You want to find specialized talent

Many staffing agencies specialize in placing job candidates in certain positions—like executive-level roles—or certain industries, like healthcare or IT. The American Staffing Association says 40% of staffing employees work in occupations that require niche experience or advanced skills. 

If you need employees with specific degrees or work experience, using a staffing agency can streamline the process and boost your chances of finding the most qualified candidate. 

Is a staffing agency a good option for your business? 

Staffing agencies can be a good resource for businesses looking to save time and stress during the hiring process—but they aren’t foolproof. (See more pros and cons of staffing agencies.)

Before you hire a staffing agency, think about your business’s hiring needs and budget. If you decide an agency is the way to go, make sure you take the following factors into account: 

  • The type of agency: You want an agency whose services and experience align with your business needs. Depending on what you’re looking for, you might want an agency that specializes in a specific field or one with a long history of providing contingent labor.   
  • The agency’s location: Using a local staffing agency gives your business a better chance of hiring success. Not only can a staffing expert from a local agency visit your workplace in person to get a feel for what you need, they also likely have a greater understanding of your local community and workforce, as well as the available job candidates nearby.  
  • The agency’s reputation: A good agency will treat your business with professionalism and respect while also advocating for the job candidates and temporary hires they work with. Make sure you read your agency’s online reviews and ask around about their reputation. 
  • The agency’s track record: Ask the agency about their average placement success rate and hiring timeline, as well as how long they’ve been operating and which types of companies they work with.  
  • The agency’s market knowledge: A good staffing agency will have extensive market knowledge about your niche or industry and be able to build upon your expertise. That means knowing which kinds of work experience yield the best candidates for certain roles, which job qualifications are non-negotiable or flexible, and how to upskill someone effectively. A staffing agency should also be able to tell you the latest salaries they’re seeing in your industry and what kinds of benefits your competitors are offering, as well as what you can do to attract better and retain talent. 
  • The agency’s process: Ask the agency what their process is for finding, vetting, and placing employees. The most successful staffing agencies usually don’t rely solely on internal databases—many of which are outdated—to find job candidates. Instead, they’re proactive about reaching out to prospects and maintaining relationships with employees and job candidates in the community. 

Hiring can be stressful, but we’re here to make it easier. To get started, check out Gusto’s complete guide to hiring for your small business

Paige Smith Paige is a content marketing writer specializing in business, finance, and tech. She regularly writes for a number of B2B industry leaders, including fintech companies and small business lenders. See more of her work here:
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