Do You Actually Make Less Money If You Are Placed In A Job By A Temp Agency?
There has been much debate over the rate of pay that someone actually receives when placed in a job by a temp agency. Some people believe that agencies do have their best interests at heart when negotiating a fair wage on their behalf, while others feel that they take an overly aggressive percentage of that negotiated wage in agency fees. In the latter instance, the feeling of the temporary employees is that they could make more money (earn a greater take-home amount) if they found a job on their own without the so-called or apparent support of a temp agency.
A typical contractual arrangement between employers and temp agencies may consist of the following:
- The temporary worker is an employee of the temp agency
- The temp agency and the hiring company agree on the worker’s rate of pay
- The hiring company also pays the agency an additional fee for securing the worker’s services
- This fee may range from 45% to 100% of the agreed-upon wage for the worker
- The differential between the fee paid to the agency and the wage paid to the worker is used for such worker-related expenses/costs as:
- Canada Pension (CPP)
- Employment Insurance (EI)
- Vacation pay
- Workplace insurance premiums (WSIB)
- This same differential is also used to pay operating/overhead costs
- Any balance left from the differential/margin may go toward the temp agency’s profits
Based on the above arrangement, and even though a hiring company is paying out more than a temporary worker is receiving in wages, it cannot be concluded that the worker would or should receive all/most of that differential amount if the temp agency was not involved.
Salaries/wages are customarily based on any combination of the following factors:
- Overall years of experience
- Years of service within the same organization
- Level of responsibility and accountability
- Market analyses/averages for similar work in other companies/industries
- Merit relative to performance and contribution
As such, it would be incorrect to assume that the temporary worker could receive/earn more money for a specific position if that job was attained directly versus by placement through a temp agency. That job will usually have a defined pay range regardless of how it was acquired.
Although one should ‘never say never’ and ‘never say always’, it is essentially a myth that you would make less money when obtaining a position with the help of recruitment firms.
There Are Additional Career-Related Benefits To Working With A Temp Agency
In addition to earning competitive wages for the work duties that are to be performed, there are several other benefits to working with temp agencies. Some of the benefits that can be realized include:
- Gaining experience in a new field or new area of responsibility
- Gaining additional experience in a familiar or known field or industry
- Launching a potential career (getting the proverbial foot-in-the-door)
- Earning supplemental income to cover loans, major expenses, or vacation plans
- Maintaining an income during periods of seasonal downtime or unemployment
- Adjusting or balancing work hours with personal lifestyle needs/preferences
- Networking opportunities within a given company or industry
- Exposure to training opportunities for further growth and development
- Staying current on product knowledge, advances in technology, market trends
- Adding depth and experience to your resume and list of references
This is indeed an extensive list of benefits and opportunities, and you may think of other ways to capitalize on working with an agency based on your personal situation and your career or financial needs.
One such temp agency is Winters Technical Staffing, one of Canada’s most highly respected and recognized staffing agencies. Our agency has been successfully placing individuals in temporary, part-time, and seasonal jobs for more than 40 years.
Make Winters Technical Staffing your first and only choice among agencies in Canada and call us today at 1-877-495-7422 or contact us so that we can begin the process of finding the position that best meets your personal and career objectives.