Pros and Cons of Staffing Agencies: A Guide to Smarter Recruitment

The combined annual growth revenue of the staffing market is expected to grow up to $130 billion in the next 7 years. With stunning numbers and rapid growth, it becomes obvious that a lot of businesses cover their staffing needs with the help of staffing agencies.

However, before deciding on delegating People Ops to an external HR partner, tech business owners should be aware of staffing agencies’ pros and cons. We’ve prepared a comprehensive overview to save you time and level up your HR strategy in the most optimal way.

Pros and Cons of a Staffing Agency: Is It Worth Researching?

What is a staffing agency and how do staffing agencies work? If you know the answers, you know the reasons to elaborate on professional staffing. To dot all the i’s, let’s consider the ultimate list of IT recruitment services. It includes:

• Negotiating compensations if necessary;

• Preparing and sending job offers;

• Onboarding newcomers;

• Managing specialists’ contracts;

• Managing payrolls;

• Arranging milestone talks with specialists;

• Team members’ offboarding, including exit interviews.

Staffing agencies simplify challenges like how to find developers for startup teams by conducting skill gap audits and shortlisting candidates

By understanding the pros & con's of professional staffing, tech business leaders can effectively manage HR tasks. They don't need to maintain an in-house HR department or upskill their specialists with niche expertise.

Thus, a professional hiring partner can be a welcome addition to any business. It's regardless whether they are hiring for long-term projects or for short-term projects from 3 months.

Let’s see what a tech company’s hiring process will look like after they turn to a third party. Thus, we will be able to figure out what are the pros and cons of staffing agencies.

Pros of a Staffing Agency

Data-driven hiring

One of the key benefits of staffing agencies is their ability to dive deep into every business’s needs. They're willing to meet those requirements as precisely as possible.

For example, we at Outstaff Your Team have data-backed time-to-fill estimations. We study each role's requirements and the market conditions carefully. Our team leverages data to calculate realistic time-to-fill estimations. As a result, we optimize the employer’s time to hire job cycle for every open position.

With this approach, each business knows what to expect and acts accordingly. For instance, it could take 3x longer to fill a Blockchain Developer position than a Graphic Designer role. What’s the reasoning, you might ask.

It’s expected that, in 2032, companies will need 3% more Graphic Designers than now. It looks like a stable demand. At the same time, the rate of Blockchain-related vacancies fluctuates between 2000-6000%. It reflects the demand for blockchain, especially in finance sector. Skilled talent in this disruptive technology is quickly snapped up by the fastest company.

Outstaffing experts, conducting 1000+ interviews per recruiter annually, understand specialists' job priorities. That’s why a staffing specialist never sticks to a cookie-cutter approach. They adjust each hiring campaign and communication style for each position. This ensures they thoroughly vet applicants to detect fake candidates and identify the best talent.

Fortunately, an ATS (applicant tracking system) helps them to achieve that. It stands as the main tool to keep the information about all the interactions with candidates streamlined.

Access to a wider market

Typically, businesses only have access to a local job market. This limits their hiring possibility, as recruiting employees is much easier in a wider global market. Apart from access to more skills, a wider market also makes sure the hiring goes faster.

One significant staffing advantage of using an agency is their ability to provide access to a global job market. This effectively removes any hiring limitations. Once a first-class outstaffing company approves hiring focuses with a client, the Talent Acquisition team runs the show. They find candidates who fit the clients’ needs perfectly. The secret of talent match is international hiring based on the Employer of Record services.

At Outstaff Your Team, our Talent Acquisition specialists function as both headhunter or recruiter, processing 32,000+ CVs of candidates worldwide each year. Having a bunch of options at the beginning of the hiring campaign, we provide our clients only with candidates whose hard and soft skills can bring value to a project.

Lower risk

Diving deep into the process of hiring brings about various risks. Searching for, interviewing, testing, and hiring and managing HR Ops for full-time employees require a lot of time and effort, which can shift focus away from other business tasks and goals.

One major advantage to using a staffing company is the ability to fully task them with hiring contract employees. This lowers several risks:

• The risk of missing an important business goal — a business that utilizes services of a staffing agency can focus on what matters the most.

• The risk of hiring the wrong people — when hiring project managers, developers, QA engineers, or BA specialists, there is no room for error.

• The risk of wasting resources — the hiring process and HR Ops for tech need a lot of time and resources to be successful.

Moreover, if you deal with the best staffing service, like provided by Outstaff Your Team, you get additional risk coverage. It means we replace team members in unpredictable situations, so our clients are confident that their projects will stay on track.

Thus, IT staff augmentation services are the go-to option for businesses that want to lower their risks and hire the best of the market.

Lower price is among the main benefits of using a staffing agency

Hiring a professional, high-skilled developer in-house may cost up to 25% of their compensation. This leaves many businesses wondering how much does it cost to hire a programmer more efficiently. Reducing the cost per hire is a key goal for most organizations.

Turning to a professional staffing agency is among the robust approaches that can help reduce per-hire cost for both tech professionals and non-skilled staffing.

Yet, budget optimization may be one of the pros and cons of professional staffing at the same time. If you are interested in stable results in the long run, be careful with saving overkill, prioritizing high-quality tech candidates and high retention rates. In other words, consider outstaffing agencies which:

• Bring skilled professionals rather than the most available in the market;

• Put effort into ensuring comfortable working conditions for those pros.

To optimize the budget allocated for outstaffing, you can opt for those agencies which offer flat monthly price for their services. That is a way to avoid hidden costs and plan your overall budget without any roadblocks.

High-quality tech candidates

A professional staffing agency always knows what kind of tech professional to look for and where to look for them. They also know how to hire the most fitting and seasoned tech pros in the shortest time and for the lower cost. Cooperating with a staffing agency will guarantee your project gets enhanced with high-quality candidates fast and without delays.

Cons of Using a Staffing Agency

Can create riffs in company culture

Possible damage to company culture is often cited as an example of why staffing agencies are bad in certain cases. Business owners may hesitate about expanding their teams with overseas professionals, as the difference in culture background can create roadblocks for smooth team communication and high productivity. Actually, managing company culture cannot be included in the list of a staffing agency’s pros and cons, as culture care it is a pretty broad concept.

To overcome a possible riff in team culture:

• Develop a unique yet unified onboarding process

• Encourage personal communication

• Host regular Q&A and strategic sessions

• Make sure the entire team knows its goals

• Establish hobby clubs — book, gaming, cinema — whatever your team enjoys the most.

Riffs in company culture, even though considered one of the main cons of working with staffing firms, can be easily overcome with simple techniques.

Less control over the hiring process

For some, working with a staffing agency is seen as the absence of full control over the hiring process. But, in reality, this is just an illusion. A professional staffing agency, like Outstaff Your Team, always keeps its clients in the loop about every stage of the process and the status of every candidate. Its clients are always as involved in the process as they want to be.

This gives tech businesses as much control over the recruitment process, as they need and want.

Search for an agency may take a long time

The search is often seen as a limitation of staffing, as it can take time to find the right agency. However, the effort can open up new horizons and possibilities.

Among the main things to consider are:

• The cost of service

• The extent of agency’s experience

• The agency’s ability to hire globally

• The speed of hiring

To sum up, understanding the pros and cons of staffing agencies is key to making informed decisions. The outstaffing model provides access to a global talent pool to meet business needs effectively. When evaluating staffing agencies’ pros and cons, focus on specific companies rather than generalizations.

Shortlist agencies with strong reputations and high-security standards by checking platforms like Clutch and verifying their certifications (e.g., ISO, GDPR, CCPA compliance). Additionally, ensure the agency’s hiring process aligns with your business goals and timelines. A thoughtful review of the pros and cons of a staffing agency can help you secure the right partner to achieve long-term success.

When Should You Use a Staffing Agency?

Staffing agencies bring benefits both for employers and jobseekers, but their advantages vary depending on the specific situation. The table below highlights when using a staffing agency makes the most sense for each group:

Tips for Working with Staffing Agencies

If you approach cooperation with a staffing agency strategically, it can be highly beneficial. Both employer and a jobseeker can benefit from these tips:

• Select an agency that has experience in your industry.

• Clearly communicate your needs, whether it's job requirements or career goals.

• Be transparent about your skills, experience, and expectations.

• Stay proactive by following up on progress or job leads.

• Use agency placements as a starting point to expand your network.

• Regularly check the agency's performance to make sure you're on the same page.

Making the Right Connection: Partnering with Staffing Agencies

Staffing agencies serve as a bridge to fill in the gap between employers and jobseekers. They offer custom solutions to meet your needs and expectations. If you're an employer, understanding the staffing agency pros and cons can help you make informed decisions and organize well the hiring process.

Meanwhile, if you're a jobseeker, you can register with trusted staffing agencies to discover new opportunities and advance your careers. Whether you're building a team or looking for your next role, you may wonder, are staffing agencies worth it? Partnering with the right agency can streamline your operations and bring all the difference.

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