What are the Major Disadvantages of Using a Staffing Agency
Shane Bernstein - Apr 27, 2020
The global staffing industry brings in over $450B in revenue every year and continues to grow. The reason being is companies doesn't have the bandwidth, expertise, or processes in place to effectively deliver hires on all of their roles.
Leveraging a staffing agency to help acquire talent within your organization is a luxury for most companies. Most agencies charge 20-30% of a candidate’s 1st-year salary. That can become quite costly if your recruitment strategy relies solely on agencies to deliver talent. The primary reason the fees are so costly; agencies have more overhead because the business is very people-intensive and to grow requires hiring more people.
Quality vs Quantity
Only 10% of the agencies in the staffing business are worthy of the value they sell. The hard part is finding those companies or individuals that value quality over quantity on a consistent basis. The business of staffing is commission-based, incentivizing agency recruiters to increase resume volume and close deals.
The staffing industry has a very high turnover. Salaries are low, training is limited or non-existent, there’s no barrier to entry, and the industry is not known for fostering and taking care of their employees across 90% of the firms doing business today. Anyone can call themselves a recruiter, however, there are only a select few that deserve the title, and even fewer that have specific industry domain expertise in the fields they are serving. Most companies with good reputations still struggle with maintaining a consistent approach, as some individual employees are much stronger than others.
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