HR Agency- Advantages & Disadvantages

merithr-pros & cons of HR Agencies - Copy

What are the advantages of working with an HR agency?

The advantages of working with an agency come in two ways.

Speed of hiring

You are extending your own recruiting talent by working with an agency that is going to focus on that exclusively.

Most people have far more jobs inside of their organization than just finding talent.

If you’re working with a Human Resource staffing agency, that’s their only job.

Access To HR Talent Pool

They also have access to the second thing, which is more talent than you have inside of an organization.

And that’s because they’re working with lots of different clients in often remarkably similar roles.

While you’re out in the market looking for that talent, we might have been looking for it three months ago and for a different search,

We might already know that person.

The two primary advantages of working with a Human Resource staffing agency are speed, because of focus and bandwidth

And then access to talent pools that an agency might have already created; they can go faster.

And in most organizations, speed is the key.

merithr Pros & Cons HR Agency -Human resource staffing agency

What are the disadvantages of working with a Human Resource staffing agency?


Well, money. It costs money to work with an agency. Certainly, it costs money to do it yourself.

So, there is that trade off that you are going to be buying a service.

That is what a Human Resource staffing agency sells, any agency must spend the time to find and qualify this talent, organize the interviews.

Do all those types of things, and they do that for a fee.

This could be a disadvantage to some if they don’t have the budget to work with an agency.

Shady Agencies

Another disadvantage could be an unscrupulous agency.

You spend your time vetting that human resource staffing agency, ensure that they do excellent work, get references if possible.

Be sure that they’re not one of those recruiting agencies that give the whole industry a bad name,

Such agencies just churn employees, or we call it throws spaghetti at the wall.

They’re not really paying attention to the soft skills that you’re looking for, the exact skills that you’re looking for.

They just throw a whole bunch of candidates at you for you to wade through.

That doesn’t really provide an advantage to you.

You might get that by posting the job on your own.

An advantage of a human resource staffing agency is they’re going to screen HR candidates for you. A disadvantage is if they don’t.

Make sure you’re working with a quality human resource staffing agency if you’re going to do that.

So those are some of the advantages and disadvantages of exploring the agency model.

Looking for an experienced and dedicated HR candidate?


So those are some of the advantages and disadvantages of exploring the agency model.

I will say that most agencies have a lot of work right now just because of the lack of talent that’s available.

A lot of organizations that might have historically thought of using an agency to help them find the talent either for a temporary need or for a search.

It doesn’t necessarily have to be full time or doing math and thinking, I really need this person.

I don’t have the resources to find them. Let me call my local quality HR staffing agency.

How do HR agencies work?

This is often the next question that comes up when someone calls, especially if they’ve not worked with an agency.

And at Merit HR, we have three product offerings.

  • Contractor temporary placement.
  • Direct hire search.
  • Consulting practice.

So, if you’re looking for talent an agency is going to come in a couple of flavors.

They can be contingent. Merit HR is contingent, which means that we have no fee until and unless we find somebody that you’d like to hire.

And then all agencies charge a percentage of first year salary as a first-year compensation.

And that’s base pay, not bonuses. Things of that nature is the industry standard.

There are variations on this, but it’s a contingent fee that is a percentage of somebody’s compensation if you decide to hire them.

So that’s on the search side.

How it works?

If it is a contract or temporary employee, your agency partner is going to build a profile with you on what you’re looking for.

Understand the duration of the need. Sometimes that can be a little ambiguous.

That’s okay, but you need to have some idea of how long you’re going to need the person.

They will do the same thing. They’ll find that person and present them to you.

You decide whether they’re a fit or not.

If yes, the agency becomes what’s called the employer of record.

Which means we hire that person onto our payroll, and we assign them to you as the client.

We bill you what’s called a bill rate.

This bill rate includes three things.

  • Person’s pay
  • All regulatory mandated things, taxes
  • The agency’s fee.

There is a pay rate.

That’s what the employee is getting.

And there’s a bill rate, which is what the agency bills.

Usually weekly on an hourly basis.

Staffing Agencies make money on these fees, either the portion of the bill rate or a contract employee or on a percentage of salary or a direct hire search.