Temp Staffing is a convenient payroll system, where the employee is a third-party employee on paper. This employee is usually on the staffing agency’s payroll, as the company outsourcing this service handles all the compensation and benefit-related matters. This article is a ready reference for 3rd party payroll agencies.

How 3rd Party Payroll  Agencies Work for Clients

3rd party payroll agencies are like matchmakers that act as a medium, matching qualified, skilled candidates with clients keen on acquiring the same. There are diverse operating models in temp agencies. Some of them provide business enterprises with a diverse pool of skilled prospective employees or other induct talented workers in their payrolls, while someplace the employees into full-time positions. In such cases, the temp agency functions as an outsourced human resource department of the client, helping the client fill essential positions. Thus, they manage the long term and short-term goals of the companies.

Additionally, 3rd party payroll agencies guarantee the genuineness of the candidate i.e., background verification, verification of educational and professional credentials, skills training, reference check before placement. It is beneficial, especially for small and medium enterprises that find it a challenge to attract the right talent at the right price. Temp agency also undertakes salary negotiations. The clients enter into a contract with the temp agency to find, evaluate, screen, and recruit the best talent, so as to aid in the processes of training and skill development. Thus, the short notice and urgent need to fill the shifts are making temp staffing a viable alternative to the traditional in-house HR function.

How 3rd Party Payroll  Agencies Work With Workers

3rd party payroll agencies work with diverse employee pools- flexible, part-time, seasonal, temp-to full-time aspirants, freelancers, and more. That is because often highly skilled professionals would prefer to offer their expertise on a project basis, rather than remain tied down to a company in a full-time position.

The parent organization considers the application, reviews it, and initiates the interview process. Further, upon meeting the criteria, the applicant may be inducted on board.

The temporary employees that get screened and shortlisted may enroll in the database and talent pool of the temp agency. The parent organization, upon reviewing the candidates’ credentials, contacts the candidate regarding details such as location preference, availability, etc. This solves the need for new employees for both the long-term as well as for the short-term.The temp would report for work at the contracting client office but remain on the payrolls of the agency.

Generally, it is a standard industry practice that the agencies charge their clients and not the employees. It is ideal that temp agencies place their candidates free of cost and not insist upon agency fees or commission percent.

Cost Dynamics

The contracting company bears the cost of hiring the employee. Thus, agencies earn their revenue by entering into a contractual agreement with the client with specific fee details as regard hourly rate, fixed fee, a floating fee as a percent and other terms and conditions.

Often the agency might include a markup profit over the cost of hiring a candidate. For example, if the company pays the temp worker Rs 500/hour, the agency might charge the company Rs 750/hour. In the case of a temporary to a full-time offer, the agreement would include a clause of a full-fledged buyout negotiation with the agency. However, it must be remembered that there is no such thing as guaranteed employment. Subjected to company hiring policies the job offer are always performance-base.

Concluding Thoughts

temp agency can be a win-win situation for both the client as well as the candidate. Agencies can provide suitable, competent employees to the companies at optimal costs.. Owing to the contractual obligation clients are reassured that; the agency would give the best quality hires. Often the agencies can work more efficiently than an in-house HR, by meeting the exact client requirements at the right price. Thus, such agencies can sometimes act as an important bridge connecting the organization to the client.

These agencies consider wide range of comprehensive factors like candidate specialization, experience, education, willingness to travel before forwarding the application to the company. This can saves time, energy, and resources of the company that can focus on running the business.

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