Employment Agencies vs. payroll

[Pinnacle]

In order to reduce staffing costs (such as payroll and benefits) for my new company, I am considering hiring a staffing agency to acquire non-managerial employees. I think coupling this with the use of independent contractors (commissioned salespeople) can significantly reduce my overhead both in the immediate term and long-term. Then again-- and this is my ignorance talking--I feel that even though the employees will be on the agency's payroll, I actually AM paying for the costs of their employment: just as a monthly lump sum payment to the agency instead of $20K+ a piece per year to each employee.

Have any of you used an agency? Is it really cheaper?

 

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[kurtyordy]

Having worked at an agency, I can tell you a bit.

It is not cheaper, the agency has about the same costs as you, only they are also tacking on a profit.

Your benefit is less paperwork, less involved taxes etc. also, if you want to fire someone and do not have a big enough pair, you just call the agency and they fire for you.

There are definite benefits, financial is not one of them.

 

[Pinnacle]

That must be because I would be paying the agency for their time. In that case, it makes the cost worth it, IMO. I appreciate the feedback, Kurt.