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Mar 30, 2022 IST Team

Staffing Agency vs Direct Hire: When A Staffing Agency is The Best

The average U.S. company spends $4,425 to hire a new employee, and internal human resources teams can increase hiring costs by 50% or more.

Yet finding the right tradespeople for your project can make or break its success. Missed deadlines, shoddy workmanship, and underqualified workers are headaches you can do without, but skilled trades workers with the right qualifications and experience are scarce.

How do you hire with confidence in today’s market? You might consider using a staffing agency, which provides great candidates. But with many superior skilled tradespeople already employed, would you be better off doing everything in-house and having total control over the process?

Let’s find out.

Staffing Agency vs. Direct Hire

To determine if direct hiring or a staffing agency is best, you need to consider your needs.

Are you looking to have more control over the recruitment and hiring process? Or do you need contingent staff you can rely on to avoid a crisis? Maybe you want to fill a full-time position or prefer to keep your team small and hire someone you have screened yourself.

A candidate might prefer to use a staffing agency to source and secure contracts, settle terms, and negotiate rates. Others might want complete control and a direct relationship with their employer.

Here are some insights.

What is a Staffing Agency?

Staffing agencies have a network of active candidates to help you find employees. They’re perfect for finding skilled workers when you’re short on time. You can hire an agency when your company needs to fill a specific role quickly.

The best staffing agencies have an extensive network of skilled trades built up over the years, but their workers are vetted and team-oriented candidates ready to work.

What are the Pros of Using a Staffing Agency?

The best staffing agencies have spent years building an extensive database of quality candidates ready to join projects when you need them. For example; A qualified candidate will promptly fill the position if a worker leaves the company due to sickness or injury.

To post on job boards is expensive and time-consuming. Staffing agencies leverage their extensive network of skilled workers to fill roles and offer flexibility to companies who need to hire professional contractors for various project stages. The contractor knows exactly what is expected of them, is paid by the agency, and leaves the project happy.

Staffing agencies complete onboarding paperwork and contracts. They handle payroll taxes, insurance, and benefits, and the employer doesn’t worry about healthcare costs, retirement plans, sick days, etc.

The best staffing agencies know the market inside out, know the salary ranges for every job, and understand what employees want from a role.

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What are the Cons of Using a Staffing Agency?

Some companies are great at what they do, and others aren’t.

Some staffing agencies spend less time and resources nurturing their candidate pool, which leads to subpar resumes and last-minute scrambles. You won’t have much control over the recruiting process.

They might provide the most qualified candidate for your position, but will the candidate fit your culture and team? A temporary worker might not mesh with long-term employees, resulting in conflict.

Hiring an agency adds another expense to your bottom line. You have to be sure that the benefits of outsourcing recruitment efforts outweigh the cost.

Lastly, staffing agencies have their brand; they won’t be an extension of yours.

What is Direct Hiring?

Direct hiring is an option for companies that need a long-term employee and only wish to use a staffing or recruitment agency for one part of the hiring process, if at all.

You might use staffing agencies to fill temporary or contract positions but prefer direct communication with a candidate to fill permanent or long-term needs. A staffing agency might handle the recruiting process, but the candidate reports to you once an offer is accepted.

You might consider direct hiring when you need construction managers, surveyors, and designers who can work on multiple projects.

What are the Pros of Direct Hiring?

You might save on time and hiring costs if you don’t need to advertise and recruit continuously. You can remove the middleman and simplify the process.

Your new employees might feel more committed to your company if they hold a long-term position. They will go the extra mile to protect your reputation and take pride in their work. Also, the job often comes with benefits, health insurance, and paid time off, making it more attractive.

Some tradespeople would rather stay on one job for stability and security, and in turn, you have a consistent team working on specific projects.

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What are the Cons of Direct Hiring?

With an employee on your payroll from day one, you are responsible for ongoing costs, including training, onboarding, benefits packages, tax, and health insurance.

You might find fantastic local talent, but you can’t cast a wide net unless you want to pay relocation costs. Also, finding candidates who wish to be full-time employees is becoming more complex. Some tradespeople see more benefit and freedom in contracting.

Hiring is a long process. You don’t want to do all the leg work and end up with an underqualified candidate pool, bad hires, and costly turnovers.

Is There Another Option?

In a contract-to-hire scenario, contractors can fill the skills gaps you have. A staffing agency streamlines the hiring process so you won’t have to use your resources to source and screen candidates.

Once sourced and screened, you can interview from a strong position. The staffing agency pays the candidate, but you have the opportunity to convert the contractor to a full-time hire. You have time to work a new full-time employee into the budget but mitigate risks and costs associated with failed hires.

When Temporary Skilled Trades Staffing Makes Sense

Direct hiring has its strengths, particularly when you need to fill a long-term position. But there are times you’ll need a specialist like a project manager or a crane operator, and although you don’t need them permanently, you’ll still want the best person for the job.

Trusting a niche staffing agency with the recruitment of skilled tradespeople makes sense in these situations. Many superior skilled tradespeople want to keep working as they get older, but not all the time, and not in permanent roles.

Niche staffing agencies have one goal: to provide their clients with highly qualified, thoroughly vetted, trained, and professional tradespeople. Their success and reputation rely on excellent placements.

Staffing agencies that care will start by planning your project and proactively hiring skilled tradespeople depending on your needs. Because they have a deep bench, they can be flexible and fill positions quickly and efficiently.

Avoid a crisis and rest easy knowing Industrial Skilled Trades is in your corner.

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Published by IST Team March 30, 2022
IST Team