How employment agencies get profit after they find for people a job?

Answer 1

If you're talking about temp. agencies it's simple. They charge the company you're working at a certain amount per hour. Say $13. They then pay you $10 an hour for your work. They then make $3 an hour off of your work. And the company does'nt have to pay for workers comp, ect....

Answer 2

Employment agencies charge the company with which they place you a placement fee which can be anywhere from 15% to 30% of your annual salary. Some agencies or "job shops" that handle contract or temporary placements work on a percentage of your hourly wage. It can be very expensive for employers to hire someone through a placement agency.

Typically employers will use agencies for very high level positions. They will also use agencies if employees in a specific field are not readily available, if they would like to "try out" an employee on a temporary basis before hiring, or if they are trying to replace an existing employee without the employee's knowledge.

Also many companies will hire employees that will work through the agency (or job shop) as a contract employee for a specific amount of time. The paycheck comes from the job shop, but the employee works on the employer's premises.

In the long run, it is probably cheaper for large companies to hire in this manner because they don't have to pay insurances and benefits for a contract employee. If they really like the contract employee, they can hire him "direct." And if they want to terminate the person for whatever reason it is legally much easier....they just tell him that his contract is over.