Are Temp Agencies Becoming Obsolete?

July, 19, 2013 by Linda Singer author workhoppers
temp agencies

Contacting freelancers directly makes hiring easier. Consider replacing your temp agency

It is clear that the industry of flexible work is on the rise. Revenues of temp agencies for placing temporary and contract workers was $104.8 billion in 2012, up from $98.3 billion in 2011 based on American Staffing Association estimates. But with new easier methods of finding temporary help being offered will the temp agency become obsolete?

The exponential growth of the flexible workforce is certainly due in part to economic uncertainty but more importantly to the increase in demand to fill professional and business services positions. A major shift in attitude has also driven this growth. Companies are looking to maintain and even increase productivity and lower costs while professionals are seeking flexible working hours and arrangements that temporary contracts offer.

While temp agencies are benefiting from these changes, they are also facing new threats. The temporary and flexible work market is attracting new players. Traditionally, companies would turn to temp agencies to fulfill their needs and for that service they would have to pay a significant commission based on the payment to the worker.

Today, companies have many new choices that make hiring a professional even just for a few hours not as cumbersome and costly as it used to be. Consider replacing your temp agency with the following alternatives:

1- Online job boards instead of temp agencies

Although there is a wide variety of job boards out there, most of them are designed for full time work. An example of this would be Monster.  However some of the traditional brands are starting to branch out a Temp/Contract work site. The cost is usually in the hundreds of dollars for just one posting or pay per click on aggregates such as Indeed, making it considerably costly for a temporary position. This practice is a one-way procedure. A company posts a job and candidates review and apply for the job.

2- Online classifieds instead of temp agencies

Even though posting on classified boards are mostly free, these sites such as Kijiji and Craigslist are principally designed to sell used items and not skills. Most of the time, you will generally  find a demand for basic skills without possibility of selection. Here again, the process is unidirectional with companies posting their requests and candidates posting their offers. Job seekers and perhaps even sole proprietors often feel afraid to answer a listing or post as there is little information given on both parties and there is hesitation to provide it.

3- Freelancer Marketplaces instead of temp agencies

This modality has been around for approximately 10 years. Sites for freelancers such as Upwork enable companies to post their jobs and freelancers to post their profile. The focus of many of these sites is in the IT and/or online design industry where work can be performed virtually. Companies can find and select freelancers to outsource their virtual work and often look for those in third world countries at lower costs. The site retains the payment to the freelancer until the work is fulfilled. The costs vary between  8 – 15% of the salary in addition there are transaction  fees. This type of payment is a good option when working virtually, as you do not get to meet the person and trust is a factor.

4- Communities of Flexible Professionals instead of temp agencies

This new most cost effective method of finding flexible workers is answering the needs of companies as they increasingly are looking to hire on demand and the needs of Generation Y  and others looking for and wanting flexible work. The web site was created to help companies easily find talented professionals LOCALLY. By hiring someone close by you can benefit from face to face interaction. Freelancers are not only IT geeks or writers but marketing experts, lawyers or even cooks and they are all part of this community. Professionals can now select the projects they want to work on and when they want to do it. Freelancers and companies become members of a community where the communication is direct with no intermediaries.  The freelancers join for free and companies pay a moderate fee for posting and browsing of candidates. This website makes outsourcing projects and hiring on demand easy! If you need to outsource a business service, you can now select directly a talented rated professional to do the work for a fraction of the cost. You will always have, at the tip of a finger, someone to come and help you when you need it. Sometimes its easier to just do it yourself….

So before you consider temp agencies, visit freelance marketplaces to find directly the right candidate for the task.


Leave a Reply