How do employment agencies make their profits?

Question

I just started working for an employment agency. I want to work temporary to permanent (to be sure I like the environment and people). I am looking for legal secretary positions. When I push for a larger hourly rate, I usually get it, making me think the agency must be making alot of money from this. I am going on an interview on Thursday, and I was told to absolutely not discuss salary or benefits with the representatiave from that law firm. If I am to stay there past temporary then I want to be able to ask about reviews for merit raises and vacation/sick-day benefits. If I don't know this stuff, how do I know that I even want to work there? My objective is to find a permanent place, so I need to know some info about the temporary position. Thanks so much for any insight you can offer. I am new to this.

Answer 1

No the company that you are working for is paying that temp agency for your being there...it cost that company more money to pay the temp agency that to have you there..it would be just cheaper for that company to hire you full time...

Answer 2

Let's say you take the job and you are paid, by the employment agency, a rate of $15 per hour. They are going to charge the law firm anywhere between $18-25 per hour for a contract to have you work there (it's generally a set percentage of the wage they'd be paying you normally) .

They can justify charging the employer this amount because during the temporary contract, the employer does not usually:
- provide worker's compensation for you (should something happen to you on the job).
- process your paycheck (you keep track of your own hours and hand it in to the agency).
- handle your tax information for that time period.
- take the time/effort/money to run background checks and/or interviews on candidates for the position.
- offer you medical benefits (a lot of employment agencies will offer discounted medical insurance after a certain time period).

This saves them both time and money, so the cost is passed onto the employment agency. As employment agencies specialize in placing people into positions, they have their own methods of running background checks and going through the pre-interview processes, which are more efficient and less time-consuming than the law firm would more than likely undergo. They also do most of their own processing of payroll information. Most employers (ie; the law firm) would rely on outside sources, such as a bank, to do this - which costs extra money.

The law firm pays for the convenience of being able to have you on a trial basis and see if you're a good fit. Generally, if an employment agency refers you to an office, you're one of only a couple candidates that they feel would fit best there, so you have a MUCH better shot of getting the position than you would just going into the interview by reference of a newspaper ad (or something similar).

Every position I've been offered while working "temp-to-hire" generally offers me around the same wage that I was getting from the employment agency. Benefits are a tough issue. Sometimes you'll be given information in the interview and sometimes they'll tell you after you've been offered the position as temp-to-hire, so that you'll have some incentive to stay longer.

If the law firm decides they want to hire you permanently, they will pay a fee to the temporary agency, essentially "purchasing" you from the agency (really it's just purchasing the contract they have with you). This is where the employment agency makes the bulk of their money.

Answer 3

Normally an employer calculates the cost of fringe benefits into the annual cost of an employees salary. Most temporary agencies do not offer any benefits for their temporary employees. The average employer assumes that the average benefit cost for a full time employee's fringe's is approximately 30% of their salary. Consequently, temporary employment agencies usually use 30% above the temp. employees wage as their payment for providing the temp. 30% is usually the minimum starting point and can go up to 50 or 60%. It also can be negotiated by the employer and the temp. agency.

Answer 4

If the firm is interviewing you for a full time position it is your right to discuss salary and benefits as well as merits and cost of living increases. You are correct in believing the temp service is making a good money on you ( if you make $7 they charge the firm $12-15) but they will argue that they have expenses, payroll taxes, insurances, etc. and that is how they pay them. If, however, you are going for a interview for a TEMPORARY position, you need to abide by the agency rules and the agency will inform you of the negotiated pay rate. Your interview will inform you of your job duties and confirm your ability to perform the tasks such as court filing and document registry your good interview will help the Temp service sell your services at a better rate than you may have been able to negotiate. Many offices use this to defer cost on benefits because they actually will get 180 days or more out of you without paying benefits, workers comp, etc., the agency handles all of this and it is factored in to the rate the firm pays for you and for their services. Temping is a great "backdoor" into a good job it is also a great way to walk away from a bad situation "no harm-no foul". Hope this clears things up.

Answer 5

Usually the positions that are temp-to-hire are the ones that after a period of time (depending on the company usually 3 months) if they like you they will hire you. Once the law firm decides they want you, this will be a new process, the Company, in this case the law firm will provide you with an offer letter that you need to sign and agree upon, stating the salary and hours that you will be working. The Temp Agency makes money by recruiting the people for the company that they sign a contract with. If you notice, your paycheck will be from the Temp Agency it self rather than from the lawfirm, why is this? because the company pays the temp agency a higher salary (a percentage more than what the agency will pay you). Temp Agencies "sell" people to Companies.

Answer 6

Your employer is the employment agency. They provide your vacation and insurance. Only when your temp position is talked about going permanent do you need to discuss with the new employer what your wages, etc will be.

Answer 7

I worked for 3 employment agencies..until I found the job I am at now. Which I have been here for years now. The company you are temping for pays a higher rate of pay to the company for you. (i.e. if you ask for $15 per hour from the temp agency the co. you are temping for may pay the temp agency $20-$25 an hour for you) I am an accountant and when I signed on from temp to perm my boss paid them off basically. A lump sum to buy me from them. As far as figuring out what co. is right for you talk to you superior and other employees to see about their benefits. Ask for their co. handbook. Just as they are trying you out , you are trying them out. And your benefits come from the temp agency until you switch over to perm.
Hope this helps.

Answer 8

You are under contract with the employment agency. They are fee based either by you or any future employer.

Answer 9

They charge the employer a percentage of the first years salary of the person they place with the employer.

Answer 10

the employer that hires you pays the employment agency a higher rate than they pay you...you pay nothing