Employment Agencies

T · October 2002

Let me rewrite my previous question. I work for a company with approximately 100 EE. We are looking into signing a contract with an employment agency. The agency will do our payroll, our W.C. Insurance and our H.R. issues. There must be something wrong with this picture. Is it only cost that would dampen this or are there other factors that should be considered?

NaeNae55 · October 2002

Will anyone from the agency be onsite? Who will your employees go to for HR issues? If not onsite, how available will they be? Who will be responsible for forms and files? Do you have a specific person who will be laison to the agency? Won't that person have to understand a lot about the law, etc to make sure that the agency is doing it's job correctly?

Remember, even if you are paying someone to handle your responsibilities, the government will still hold YOU and not the agency responsible if something goes wrong.

hrqueen · October 2002

We have used employment agencies to pretest and screen temps for use in production. If the temps work out they are hired as a regular employee. We have had a TERRIBLE time finding an agency that was thorough, responsible, and trustworthy. And your company is expecting much more than we expect from the agency. Even with the best of the lot, I resumed testing to verify the temp's qualifications, did our own background check, etc.

Anyone can sign a contract, but if the service is not as expected, your company will have to pay the legal fees to enforce it. Business is slow for agencies right now and I'm sure they are willing to commit to almost anything in order to get the business. However, in the future when the economy picks up and they become busy is another issue. I would get lots and lots of references, and check them thoroughly.

Theresa Gegen TX · October 2002

You need to look very closely at the contract with the company. You may be a joint employer, and often times that company expects your company to indemnify it for any discrimination, etc.

The biggest downside is the loss in flexibility. Also, many of these companies are fly by night types. Many employers use it though, and have good results with a good company and a clearly written contract!

Good Luck!

Pork · October 2002

Nothing wrong with it except it does not build "company first" loyalty. If the contracted company is going to have a personnel administrator on-board you should disregard the company loyalty, if that is not an issue with owners or upper management. The contracted personnel administrator acts as the employee representative and thus is reponsible for their employee's ability to learn the task, conditions, and standards, that are acceptable by your company. I have been there and done that, only to realize, after the fact, that since we did not have a contract representative on site the contracted labor was allowed to be a part of the labor pool and to vote yes or no for a labor union. It cost me my position as HR because I was the "dumb bunny" that went along with the VP for Human Resouces and brought Labor Leasing into the company expense system. It saved us a lot of money and the leased employees made mor money but had no benefits and were not a part of the "family" until they were rolled into the organization after 6 months and were fully trained. Our safety program became untouchable because we were not responsible for the accident injury until they were fully trained and a seasoned safe working employee. But when we had to defend against an organizating campaign I got waxed because it was the leased employee that was pushing to organize and almost had the regular full time employees out numbered. I learned the hard way; do not try it without the full view of this issue. Good luck Pork

HR in PA · October 2002

Speaking as someone with four years experience in the temporary/permanent staffing arena as an HR Manager for two smaller services, my advice is do a thorough reference check on the agency itself. Contact any current clients that may have contracts similar to what you are about to enter into. In addition, ask for the qualifications of the individuals that will be dealing with your HR issues. Find out if you will be dealing with the same person as a primary contact or if your employees will be subject to anyone that is available at the time. Often, staffing services do not provide their personnel with extensive human resource education/training. This service may, I don't know. However, it is certainly worth checking out since you are charging them with such a big responsibility and putting your reputation in their hands. Also, the turnover of staffing representatives is very high due to burnout and lower pay. Therefore, your representative may constantly change as individuals move in and out of the company.

I say this as a warning. There are many reputable staffing services available and willing to help. Just make sure that this is right one for you and your company.

Gillian · October 2002

The key to it is the "HR Issues" piece. If the agency cannot do this well, the cost of problems will ultimately outweigh the savings. As noted in the other posts, do a good job of reference checking. There are some horror stories with this type of service.

jpepler · October 2002

My question is -- "Why would you want to do this"? Is it strictly a money issue? Having 100+ employees warrants a seasoned HR professional on sight. What would you be saving $20,000 - $30,000 annually (agency fee vs. HR professional's salary)? One slip up could cost you much more than that.

I wouldn't recommend an agency. You want someone on YOUR staff who's first loyalty is to the company. An outside person's first loyalty would be to the agency first and your company second (if you're lucky).

T · October 2002

Thanks for all your input. I will definitely do more research on the agency.

Employment Agencies

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