- Blog post
Temp agencies: They may be good, bad or downright ugly
So you need some temporary workers and you’re trying to choose a staffing agency — what should you look for? And just as important, what should you look out for?
Temp agencies can either excel or fall down in any of four main areas. These are:
- Legal compliance
- Worker selection
- Deployment flexibility
Let’s look at each in turn and see what the implications are for your business.
1. Legal compliance
Ever hear of the legal doctrine of “co-employment”? It means that the courts may consider that you and the temp agency share responsibility as joint employers of temps or other contingent workers. Result: You can be held liable if the agency illegally cuts corners.
One example: A staffing agency gets the idea that clients prefer men for certain jobs. So the agency excludes women when it hires or sends along temps to fill those jobs. If you are one of the clients to whom the agency has sent male-only temps, you could be sued — along with the agency, of course — for sex discrimination.
Another example: An agency pays its workers less than the minimum wage in order to reduce the amount it bills the client company, or fails to pay overtime to temps who work eight hours at company A, 20 hours at company B, 15 hours at company C and four hours at company D. If you are one of those companies, you may be liable for the wage-hour violations the agency has instigated.
Best practice: Don’t look at cost as the only factor in choosing an agency. A fly-by-night agency that shirks its legal obligations to workers may be able to quote a lower price, but end up costing you more in the long run. Check whether your agency follows EEOC and Labor Department rules and regs.
Also check whether your agency has workers compensation insurance on its temps, and whether they’re bonded to cover such items as theft or destruction of your property.
2. Worker selection
You probably have a pretty good idea about how to hire a permanent employee. You use a battery of background checks, work-related skill tests, perhaps other tests including personality assessments, and personal or by-phone interviews to gauge a candidate’s suitability.
Well, temp agencies hire the people they send you. But how careful, effective, humane or otherwise is their process? You should make it your business to find out.
One staffing agency recounts how a competitor had applicants slip resumes to a receptionist barricaded behind a plexiglass shield like a counter attendant at a convenience store in a dicey neighborhood. Do you want to associate yourself in workers’ minds with treatment like that?
Or suppose an agency does inadequate background checking, and as a result you bring someone with a conviction for embezzlement into your accounting office for two months. Is that a risk you want to take?
Another consideration: Agencies may select candidates through computer-based testing without in-depth interviews. For simple, routine jobs, people chosen by computer may be OK, but for more complex work, you may want to be sure the workers you’re being sent have completed an interview or two where the agency is looking for a match between the candidate and you.
Some temporary jobs don’t require a lot of training. But more typically, training will be a part of the equation.
Ask questions like these:
- What training does the agency provide temps for different categories of positions like office, factory, security, etc.?
- Will it agree to administer a training course on your behalf, and what will that cost?
- Will it allow you to train a group of temps for a given project without charging you for their time?
Don’t forget: Untrained or ill-trained temps can create hidden costs as they divert other employees from their work in order to show them what to do or correct their mistakes.
4. Deployment flexibility
You’d like to think that your staffing agency will be sending you people who actually fit into the job you want done, and whose personalities fit into your business’s milieu. But what if they don’t?
You need to know ahead of time how your agency handles terminations when you try a worker out and find that he/she is unsuitable. Ask questions like:
- What documentation of unsuitability do we have to provide?
- Can we send a worker back at any time?
- How rapidly will such workers be replaced?
- Does the agency offer a guarantee to cover our costs associated with people who don’t work out?
Also think about flexibility in the opposite sense: What if the worker is so good that you decide you want to hire him/her permanently? Will the agency allow you to do that without restrictions? Will there be an extra charge?
A complex decision
At the end of the day, the decision to use temps or other contingent workers is a complex one, based on many business factors.
But if you keep the four factors above in mind, you’ll have a better chance of making the right decision when you pick an agency or agencies to work with.
Source: Adapted from posts at www.entrepreneur.com and www.newerahrsolutions.com