3 Temp Agency Myths

Temp agency myths in the employment market have given the agencies some bad press. These myths are mainly created through misconceptions and misinterpretations of services and agreements. While there have been some incidents of malpractice among a few temp agencies, particularly online, it’s important to set the record straight.

Myth 1: Temp Agencies Are Ripoffs

This very unhelpful and unproductive myth got started as a pure misinterpretation of the functions and operations of temp agencies. The myth is based on the practice of employees being hired at, for example, $20 an hour paid by employers and only receiving $15 an hour from the agency.

But the employees are actually employed by the temp agency, not by the companies where they work. The temp agency gets a cut of the hourly salary paid by the client at a certain rate. The rate of payment is set by agreement between the temp agency and the employee. This is all done upfront, and the rates are decided on an ongoing or per-assignment basis. The rate the employee receives is therefore naturally less than the hourly rate paid by the temp agency’s client employer.

Myth 2: Temp Agencies Don’t Try Too Hard to Find Jobs

This is a rather strange myth, given that the agencies depend on the cash flow from finding people jobs. The misconception here is that temp agencies can somehow do the impossible. Temp agencies can’t find jobs when there aren’t any jobs to find. Any lack of work isn’t their idea. It’s definitely not in any agency’s interest to have employees on their books who aren't earning.

Also highly relevant here is that the agencies have a complete dossier on their employees. When a job comes along, they can do an instant match. If matches aren’t available, they can’t do much about it. Agencies do make every effort to expand their client base as much as possible.

Employment market conditions and local issues also play a role with temp agency work. Recessions and industry downturns reduce the size of the employment market in their areas. Some temp agencies are better than others, and some are much better at finding jobs in some industries.  

Myth 3: Temp Agencies Are an Obstacle to Finding Permanent Jobs

This myth is a wide miss from the facts. The real story is quite different. The agreement with employers allows the agency to receive a finder’s fee if the employer wants to hire the temp worker in a permanent role. The temp agency doesn’t lose out on this arrangement, which is basically a recruitment arrangement with employers.

The only grain of half-truth in this myth is that the temp employee may not be eligible for permanent employment for a period of time defined by the agreement between an employer and the temp agency. This stipulation means that the agency gets both the benefit of the salary cut and the finder's fee.