What Goes into Staffing Agency Costs? 

blue background. yellow icon of a receipt that says "Fees" at the top. What Goes into Staffing Agency Costs?

In today’s dynamic business landscape, organizations are increasingly turning to temporary and contract workers to fulfill specific project needs, manage fluctuating workloads, and access specialized skillsets. Staffing agencies have emerged as a popular solution—offering a streamlined process for acquiring talent without the responsibility of full-time recruitment. The solution is evident by the staffing industry revenue doubling from 2010 to 2022. We’ve been a part of that growth! 

But you may be wondering: what goes into the costs of working with a staffing agency?  

We talk to hiring managers, executives, and stakeholders every day, so we know that these thoughts are often top of mind—particularly during times of economic uncertainty. 

Let’s explore staffing agency costs, what impacts those fees, and how to implement practical strategies for organizations to maximize their value while minimizing expenses. 

Types of Staffing Agency Placements 

Staffing agency costs can vary depending on the placement type. The in-demand nature of certain professions can also influence staffing agency costs. For jobs or industries with a limited pool of qualified candidates, staffing agencies may charge a higher premium to secure the right fit for the employer. Here’s a breakdown: 

Temporary placements 

  • For temporary placements, you’ll pay an hourly rate in addition to the temporary employee’s wages. 
  • This hourly rate covers the agency’s services and benefits provided to the employee. 
  • Sometimes, there’s a flat fee per employee, regardless of the number of hours worked. 
  • Alternatively, you might pay a percentage of the worker’s total pay. 


  • Consider this a test before you invest! During a temporary assignment, the employer assesses the candidate’s performance and fit within the company culture.  
  • This period allows both parties to evaluate whether the arrangement is a good match. 
  • The fees are similar to temporary placements, but there may be additional costs if you decide to hire them permanently. 

Direct Hire Placements

  • This is when you’re looking to fill a full-time position. 
  • You only pay the agency a fee if they successfully find someone you hire for the long term. 
  • This fee is typically a percentage of the new employee’s first-year salary. So, the higher the salary, the higher the fee.  

Some agencies even help you find independent contractors, who work for themselves, set their own hours, and use their own tools. You pay them for their services based on an agreed upon rate. 

Related: Using Direct Placement with Staffing Agencies

Factors Affecting Staffing Agency Costs  

While it’s true there are various costs involved with working with a staffing agency, the final price tag isn’t one-size-fits-all. The complexity of the role you need to fill down to how long they’ll be with you can all influence an agency’s fees.  

Understanding the following factors can help you make an informed decision about whether their services fit your budget and hiring needs. 

  • Industry and Job Title 
  • Location 
  • Candidate Experience and Skills 
  • Length of Assignment 

Hidden Costs of Hiring 

While there are various costs associated with working with a staffing agency, they’re not far off from when you hire yourself. Be aware that there may be additional expenses for things like benefits, insurance, and administrative fees. These can add up to 30-50% on top of the employee’s annual salary. So to ensure you understand the total cost, be sure to get a detailed breakdown from the staffing agency. 

Consider the internal costs of: 

  • Internal Recruitment Costs: Advertising, screening, interviewing expenses—both time and money dedicated to them. 
  • Time Investment: Hiring process detracts from core business activities. 
  • Risk of Bad Hires: Cost of turnover and loss of productivity. 

Related: 5 Strategic Benefits of an Onsite Staffing Agency

Cost-Saving Strategies  

Organizations concerned with staffing costs can find significant savings by being strategic with staffing through: 

  • Clear Job Descriptions: Clear job descriptions ensure the right talent is hired, minimizing wasted time and recruitment fees 
  • Long-Term Partnerships: Building long-term partnerships with preferred agencies allows you to leverage your loyalty for better rates. 
  • Consider Temporary-to-Permanent: Considering temporary-to-permanent placements gives you an opportunity to assess a candidate’s fit before committing to a full-time hire, potentially mitigating long-term staffing costs. 
  • Utilize Technology Platforms: Utilizing technology platforms can streamline the recruitment process, saving time and administrative expenses. 

If you’d like to learn about how you can improve your hiring process, speak to one of our hiring partners! 

Speak to One of Our Hiring Partners

Questions? Call us toll-free: 855-485-8853