Quick answer: How do staffing agencies work? A staffing agency finds, screens and hires workers. Then it places them with companies that need help. The agency is the worker’s employer. It pays wages, taxes and workers’ comp. The company pays the agency an hourly rate for each worker. Jobs can be temporary, temp-to-hire or direct hire.
Staffing is a big part of how America works. In 2024, about 2.2 million temp and contract workers had a staffing job in an average week. That’s from the American Staffing Association. Over a full year, staffing gave jobs to about 11 million people.
So, how do staffing agencies work for both sides? This guide covers the companies that hire and the people looking for work. You’ll see each step, how agencies get paid, and how to pick a good one.
What does a staffing agency do?
A staffing agency connects companies with workers. Think of it as a middleman that does the hard parts of hiring.
For companies, a staffing agency:
- Finds and recruits job seekers
- Screens them with interviews, skills checks, background checks and drug tests
- Hires them as its own W-2 employees
- Runs payroll and pays payroll taxes
- Covers workers’ compensation and unemployment insurance
- Handles paperwork like I-9 forms and E-Verify
- Replaces a worker who isn’t a good fit
For job seekers, a staffing agency:
- Matches you with jobs that fit your skills
- Gives you access to jobs you might not find alone
- Pays you, often every week
- Helps with your resume and interview prep
- Finds your next job when an assignment ends
At Jomsom Staffing, all of this is free for job seekers. The company that hires pays the agency, not the worker.
How do staffing agencies work? The process step by step
Here’s what happens from the day a company asks for help to the day a worker starts.
- The company sends a staffing request. A hiring manager tells the agency what they need. That includes the job, skills, pay, hours and start date.
- The agency recruits. Recruiters check their pool of ready workers first. They also post jobs and reach out to new people.
- The agency screens. Workers go through interviews and skills checks. Background checks and drug tests are done if the company needs them.
- The agency sends candidates. The company picks who it wants. For some jobs, the agency simply places the best match.
- The worker starts the assignment. They do the work at the company’s site, under the company’s supervisors.
- The agency runs payroll. The company approves timesheets each week. The agency pays the worker and bills the company.
- The assignment ends or turns permanent. The worker moves to a new job, or the company hires them full time.
Speed is a big reason companies use staffing. At Jomsom, most positions are filled within 24 to 48 hours, depending on the job. Learn more about how staffing agencies help you find talent faster.
Who does a temp worker work for?
Who’s the boss? It’s a key part of the answer to “how do staffing agencies work?” It also confuses a lot of people. A temp worker works at the client company, but for the staffing agency.
| Task | Staffing agency | Client company |
|---|---|---|
| Recruits and screens the worker | Yes | Sets the rules |
| Hires the worker (W-2) | Yes | No |
| Pays wages and payroll taxes | Yes | No |
| Covers workers’ comp | Yes | No |
| Gives daily tasks and supervision | No | Yes |
| Approves timesheets | No | Yes |
| Keeps the job site safe | Shared | Shared |
Safety is a shared job. OSHA says staffing agencies and host employers are jointly responsible for a safe workplace for temp workers.
Types of staffing services
How do staffing agencies work across their services? Most offer four main types. Here’s how each one works.
1. Temporary staffing
A worker fills a short-term need. It could be a busy season, a special project or a staff member on leave. The job ends when the need ends.
2. Temp-to-hire
The worker starts as a temp. If both sides like the fit, the company hires them for good. This lets the company “try before it buys.” If it hires the worker early, it may pay a temp-to-hire conversion fee.
3. Direct hire
The agency finds a worker who goes straight onto the company’s payroll. The company pays the agency a one-time placement fee.
4. Payrolling
The company has already found the worker. The agency just handles payroll, taxes and compliance.
See all of Jomsom’s staffing services.
How do staffing agencies make money?
Ask “how do staffing agencies work?” and the next question is about money. Staffing agencies make money from a markup. The company pays a bill rate. The worker gets a pay rate. The agency keeps the difference.
Here’s a simple example:
| Per hour | |
|---|---|
| Worker’s pay rate | $18.00 |
| Agency markup (40% in this example) | $7.20 |
| Company’s bill rate | $25.20 |
That $7.20 isn’t all profit. It pays for payroll taxes, workers’ comp, unemployment insurance, recruiting, screening and the agency’s staff. What’s left is the agency’s margin.
Markups change by job, skill level and location. Direct hire works differently. The company pays a one-time fee, usually a share of the worker’s first-year salary. At Jomsom, rates are tailored to each client, and we send a detailed proposal first. Read about the cost benefits of using a staffing agency.
How do temp agencies work for job seekers?
If you’re looking for work, here’s what to expect when you sign up with a temp agency.
- Apply. Fill out an application online or at a local office.
- Meet a recruiter. Talk about your skills, the jobs you want and when you can work.
- Get screened. You may need a background check or a drug test, depending on the job.
- Get matched. Your recruiter calls you with jobs that fit.
- Start working. You work at the client’s site and turn in your hours.
- Get paid. The agency pays you. Many temp agencies pay weekly.
You don’t have to take every job you’re offered. And you never pay to be placed. At Jomsom, we pay weekly by direct deposit, paper check or pay card. Many of our locations also offer medical, dental and vision benefits. Get more answers in our job seeker FAQ.
Staffing agency vs. recruiting agency
People often mix these up. Here’s the main difference:
| Staffing agency | Recruiting agency | |
|---|---|---|
| Main focus | Temp, temp-to-hire and some direct hire jobs | Mostly permanent, often higher-level jobs |
| Who employs the worker | The agency, during the assignment | The company, from day one |
| How it’s paid | Hourly markup, plus fees for direct hire | One-time placement fee |
| Speed | Often days | Often weeks or months |
Many staffing agencies, including Jomsom, do both. We can staff contract and direct hire jobs at the same time.
Is it worth using a staffing agency?
For many companies and workers, yes. Here are the main pros and cons.
Pros for companies
- Fill jobs fast, often within days
- Scale up for busy seasons and scale down after
- Skip payroll, taxes and workers’ comp paperwork
- Try workers before hiring them
- Get a fast replacement if someone isn’t a fit
Pros for job seekers
- Free help finding work
- Quick access to open jobs
- Weekly pay at many agencies
- A path to a permanent job
- New skills and experience for your resume
Things to watch for
- Hourly costs can be higher than hiring directly, since the markup covers more
- Some temp jobs end with little notice
- Not every temp job offers benefits
Staffing is also a common way into a steady job. The ASA says 64% of staffing workers use it to fill a gap between jobs. Or they use it to land a new one. Read how temporary jobs can lead to permanent careers and the benefits of using a staffing agency vs. applying directly.
What industries use staffing agencies?
Almost every industry uses staffing. According to the ASA, here’s where staffing employees work:
| Sector | Share of staffing jobs |
|---|---|
| Industrial (warehouse, manufacturing, logistics) | 36% |
| Office, clerical and administrative | 24% |
| Professional and managerial | 21% |
| Engineering, IT and scientific | 11% |
| Healthcare | 8% |
Jomsom focuses on logistics, light industrial, clerical, skilled trades and healthcare support jobs. See the industries we staff.
How to choose a staffing agency
Now you can answer “how do staffing agencies work?” Next, pick a good one. Not all agencies are the same. Look for one that:
- Knows your industry and your local job market
- Screens workers with care
- Is clear about rates and fees up front
- Follows federal, state and local labor laws
- Pays workers on time and follows overtime rules
- Replaces workers quickly when needed
- Has good reviews from both clients and workers
Read what to expect when partnering with a staffing agency for the first time and how staffing agencies reduce hiring risks.
How does Jomsom Staffing work?
How do staffing agencies work at Jomsom? Here’s a quick look. We’ve been in staffing since 2008. We’ve franchised since 2012. Each office is locally owned and run, with support from our national team.
- Services: temporary, temp-to-hire, direct hire and payrolling
- Speed: most positions filled within 24 to 48 hours
- Payroll and billing: weekly, with online timesheet approval
- Screening: background checks, drug tests and E-Verify
- Compliance: federal, state and local labor laws, backed by Signature Back Office Solutions
- Offices: Tampa, FL, Las Vegas, NV, Long Island, NY, Monmouth Junction, NJ and Fort Bend, TX
Have more questions? See our employer FAQ. Want to run your own staffing business? Learn about owning a Jomsom franchise.
Frequently asked questions
How do staffing agencies work for employers?
The employer tells the agency what it needs. The agency finds, screens and hires the worker, then runs payroll. The employer supervises the work and pays the agency an hourly bill rate.
How do staffing agencies get paid?
The client company pays them. For temp jobs, the agency adds a markup to the worker’s hourly pay. For direct hire, the company pays a one-time placement fee. Workers don’t pay the agency.
Do you have to pay a staffing agency to find you a job?
No. A real staffing agency is free for job seekers. The company that hires you pays the agency.
Is a staffing agency the same as a temp agency?
Mostly, yes. “Temp agency” usually means short-term jobs. “Staffing agency” is broader and often includes temp-to-hire and direct hire jobs too.
Can a temp job turn into a full-time job?
Yes. Many companies use temp jobs to find people to hire full time. With temp-to-hire, that’s the plan from the start.
How do staffing agencies work with short and long jobs?
Jobs can be any length. Some last a day or a week. Others last months or turn permanent.
Ready to get started?
Now you know how staffing agencies work. If you’re hiring, request talent and a local Jomsom recruiter will send you a tailored proposal. If you’re looking for work, search open jobs or contact your nearest office. It’s free.
Disclaimer
Franchise Disclaimer:
This is not an offer to sell a franchise. Offers are made only by a Franchise Disclosure Document (FDD) and in line with the law.
Statement:
We are an Equal Opportunity Employer. All qualified applicants will get consideration. There will be no regard to race, color, religion, sex, or other protected status.
HIPAA Statement:
We protect all personal health information in line with HIPAA privacy and security standards.
Sources: American Staffing Association, Staffing Industry Statistics; OSHA, Protecting Temporary Workers; U.S. Department of Labor, Fair Labor Standards Act. The markup example is illustrative; real rates vary by job, skill and location.
