Guide to 3rd Party Payroll Agencies: How They Work, Costs, and More

1. Guide to 3rd Party Payroll Agencies: How They Work, Costs, and More Temp Staffing is a convenient payroll system, where the employee is hired temporarily through a staffing agency. This employee is usually on the staffing agency’s payroll, as the company outsourcing this service handles all the compensation and benefit-related matters. This article is a ready reference for 3rd party payroll agencies. How 3rd Party Payroll Agencies Work for Clients 3rd party payroll agencies are like matchmakers that act as a medium, matching qualified, skilled candidates with clients keen to hire the right talent into temporary positions. There are diverse operating models in temp agencies. Some of them provide business enterprises with many skilled employees to meet an urgent job requirement or other induct talented workers in their payrolls, while someplace the employees into full-time positions. In such cases, the temp agency functions as an outsourced human resource department of the client, helping the client fill essential positions. Thus, they manage the long term and short-term hiring needs of companies. Additionally, 3rd party payroll agencies guarantee the genuineness of the candidate i.e., background verification, verification of educational and professional credentials, skills training, reference check before placement. It is beneficial, especially for small and medium enterprises that find it a challenge to attract the right talent at the right price. Temp agency also undertake salary negotiations. The clients enter into a contract with the temp agency to find, evaluate, screen, and recruit the best talent, keeping in mind the technical requirements

2. of the job and the candidate qualifications. The clients can hire the candidates within a short turnaround period without much hassles of training and skill development. Thus, the short notice and urgent need to fill the shifts are making temp staffing a viable alternative to the traditional in-house HR function. How 3rd Party Payroll Agencies Work With Workers 3rd party payroll agencies work with diverse employee pools- flexible, part-time, seasonal, temp-to full-time aspirants, freelancers, and more. Job seekers often approach temp agencies rather than the company job portals. That is because often highly skilled professionals would prefer to offer their expertise on a project basis, rather than remain tied down to a company in a full-time position. The agency would consider the application and initiate the interview process. Further, upon meeting the criteria, the applicant may be inducted on board. The temporary employees that get screened and shortlisted may enroll in the database and talent pool of the temp agency. They would be communicating in case of an open position that matches the candidate’s skill-sets, location preference, and availability. The jobs may be short term or long term projects and may even result in a permanent offer to the eligible candidate, based on performance. The temp would report for work at the contracting client office but remain on the payrolls of the agency. Generally, it is a standard industry practice that the agencies charge their clients and not the employees. It is ideal that temp agencies place their candidates free of cost and not insist upon agency fees or commission percent. Cost Dynamics The contracting company bears the cost of hiring the employee. Thus, agencies earn their revenue by entering into a contractual agreement with the client with specific fee details as regard hourly rate, fixed fee, a floating fee as a percent and other terms and conditions. There may also be provisions as to the replacement of candidates if found unsuitable. Often the agency might include a markup profit over the cost of hiring a candidate. For example, if the company pays the temp worker Rs 500/hour, the agency might charge the company Rs 750/hour. In the case of a temporary to a full-time offer, the agreement would include a clause of a full-fledged buyout negotiation with the agency. However, it must be remembered that there is no such thing as guaranteed employment. Subjected to company hiring policies the job offer are always performance-base. Concluding Thoughts A temp agency can be a win-win situation for both the client as well as the candidate. Agencies can provide suitable, competent hires for companies at optimal costs. Owing to the contractual obligation clients are reassure that ; the agency would give the best quality hires. Often the agencies can work more efficiently than an in-house HR, by meeting the exact client requirements at the right price. It is better task to outsource agencies rather than going through a full employer-employee contract and finding the right candidate after several rounds of interviews and screening.

3. These agencies consider wide range of comprehensive factors like candidate specialization, experience, education, willingness to travel before forwarding the application to the company. This can saves time, energy, and resources of the company that can focus on running the business. On the other hand, temp agencies can provide employment opportunities to freshers as well as experienced hires.