Temporary staffing means workers are employed by a staffing agency and placed at a client company for a set period. The client pays the agency an hourly bill rate, and the agency pays the worker, handles payroll taxes and usually carries workers' compensation insurance.
Staffing and agenciestopic
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In one line
Workers employed by the agency and placed at a client for a set period. The client pays the agency an hourly bill rate.
Temp assignments can last a day, a few weeks or many months. Common uses include seasonal peaks, covering leave, short projects and trying out a worker before a permanent offer, known as temp to hire or contract to hire. The agency recruits, screens, onboards and pays the worker, while the client directs the daily work at its site.
The bill rate covers more than the worker's pay. It must cover the employer's payroll taxes, workers' compensation, any benefits the agency offers, recruiting costs, overhead and profit. The gap between bill rate and pay rate is called the spread, and the bill rate divided by the pay rate is often expressed as a markup.
Why it matters to recruiters
Temporary staffing gives employers flexible capacity without adding permanent headcount or running payroll for short term workers. For agencies, temp staffing builds recurring weekly revenue rather than one time fees. Recruiters need to understand how rates, overtime and assignment terms work so they can quote correctly and keep both the client and the worker happy.
An example from a recruiting desk
A distribution center adds 40 temporary pickers from October to January. The agency recruits and onboards them, pays them weekly and bills the client hourly for each hour worked. In January the client offers permanent roles to eight of the best workers, which the agreement allows after a set number of hours without a conversion fee.
Tips that help
Spell out overtime, holiday pay and conversion terms in the client agreement.
Confirm who provides safety training and equipment before the first shift.
Check in with temps during the first week to cut early dropouts.
Track assignment completion rate as a key quality measure.
Mistakes to avoid
Quoting a bill rate without accounting for payroll taxes, workers' compensation and overtime.
Treating long term temps exactly like employees without reviewing co employment and benefits rules.
Frequently asked questions
Who is the employer of a temporary worker?
Usually the staffing agency is the employer of record: it hires the worker, runs payroll and withholds taxes. The client directs the daily work. Both can share some legal duties, such as workplace safety, so agreements should be clear. This is not legal advice.
What is temp to hire?
Temp to hire, or contract to hire, is a temporary assignment with the plan that the client may hire the worker permanently after a trial period. The agreement usually sets a minimum period or a conversion fee if the client hires earlier.
How is a temp bill rate calculated?
Agencies start from the worker's pay rate and add the cost of payroll taxes, workers' compensation, benefits and overhead, plus a margin. The result is the hourly bill rate charged to the client. Markup percentages vary widely by industry and region.
