Questions to Ask a Staffing Agency
Questions for a hiring manager, owner, or HR lead deciding which staffing agency to work with. They cover fee models and when payment is due, guarantee periods, who screens what, candidate ownership, temp worker liability, and the terms in the agreement.
The questions
Open any question for the note
Which roles and industries do you place most often, and how many placements like ours did you make last year?
Why ask it
A number for last year, in your role family, separates a specialist from a generalist with a good website. Agencies that answer with a list of sectors they serve are describing ambition rather than history.
Who at your firm would actually work our roles, and how many other clients does that person carry?
Why ask it
The pitch is often given by a partner and the work done by a recruiter with thirty open requisitions. Ask for the name and the caseload, then ask to meet them before signing anything.
Where do your candidates come from: your own database, job boards, or direct outreach?
Why ask it
An agency reposting your job and forwarding applicants is charging a placement fee for something your own careers page does. What you are paying for is outreach to people who are not looking, so ask what proportion of last year's placements came that way.
What is your fee, what is it a percentage of, and when is it due?
Why ask it
Percentages are usually of first-year base pay, but some agencies include bonus or sign-on. Also establish whether the invoice lands on the start date or is staged, since payment before the guarantee period ends removes most of your leverage.
If someone you place leaves or is let go in the first three months, what happens?
Why ask it
There is a real difference between a free replacement search, a prorated credit, and a refund. Ask which one, for how long, and whether it still applies if the person leaves because the role was not what you described.
For a role like ours, how long from the job order to a first shortlist, and how many candidates would that be?
Why ask it
Gives you a date to measure them against and reveals whether they intend to send a curated three or a screened-in twenty. An agency promising a shortlist within days for a hard-to-fill role is likely to forward whoever is already on file.
Of the searches you took on last year, what share did you actually fill?
Why ask it
Fill rate is the number agencies least like to give, and the honest ones will explain which searches they walked away from and why. A claim near one hundred per cent usually means they only count the ones that worked.
What do you screen before we see a candidate, and what do you leave to us?
Why ask it
Find out specifically who verifies employment dates, licences, right to work, and technical ability. The gap between what the agency assumes you will do and what you assume they have done is where bad hires come from.
Do you run background and reference checks, and does that cost extra?
Why ask it
Some agencies include basic checks in the fee, some bill separately, and some do neither while implying otherwise. Get it in writing, including who holds the results and how long they keep them.
Are you asking for exclusivity, and does the fee change if we run other agencies alongside you?
Why ask it
Exclusivity can buy you real effort and a lower rate, or it can just take you off the market for ninety days. If they want it, ask for a time limit and a delivery commitment attached to it.
How do you handle a candidate we already have in our system?
Why ask it
Duplicate submissions cause fee disputes that end up costing more than the hire. Ask for their ownership window, and make sure the agreement says a candidate already in your applicant tracking system is not theirs.
If we hire someone you introduced into a different role next year, do you get a fee?
Why ask it
Ownership clauses can run six or twelve months and can cover any hire, not just the role they were sourced for. This is worth reading closely because it is where surprise invoices originate.
For temporary or contract workers, who is the legal employer, and who carries workers' compensation and liability insurance?
Why ask it
You need the certificate of insurance, not a verbal assurance. If the agency treats this as paperwork rather than the centre of the arrangement, the exposure for an injury on your site may land with you.
How do you classify the people you place, and who is responsible if that classification is challenged?
Why ask it
Misclassifying a worker as a contractor creates tax and wage liability, and agencies vary in how much of that they will indemnify. Ask what the agreement says and have a lawyer read the indemnity language.
What will you tell candidates about us, and can I see how you describe the role?
Why ask it
The agency's pitch becomes your reputation with every person they contact. Overselling produces candidates who arrive with wrong expectations and leave inside a year, which the guarantee period will not cover.
What do you do between offer and start date to keep someone from taking a counteroffer?
Why ask it
Fallout after acceptance is common and expensive in lost time. Good agencies have a specific routine here, including resignation coaching, and can tell you roughly how often their placements still fall through.
If we turn down everyone in the first shortlist, what happens next?
Why ask it
The useful answer involves coming back to recalibrate rather than sending more of the same. An agency that treats rejection as your problem will keep billing your time and never reach a hire.
What can you tell us about what this role currently pays in our market?
Why ask it
Agencies see live offers and declines, so their pay data is often better than published surveys, though they are also motivated to push your range up since the fee follows salary. Ask what they have seen candidates decline and why.
Can we speak with two current clients and one who stopped working with you?
Why ask it
The former client is the one worth the phone call. Refusal to give any reference contact, or offering only written testimonials, tells you what the calls would have said.
What do you need from us to do this well, and what makes a client difficult to work for?
Why ask it
Their answer is usually a fair description of the parts of your process you have not fixed: slow feedback, moving requirements, too many interview rounds. An agency that says clients are all easy is telling you nothing and will not push back later.
Walk me through the termination terms: notice, what we owe on work in progress, and any restriction on hiring your staff.
Why ask it
Read this before you need it. Watch for automatic renewal, a non-solicit that would stop you hiring a recruiter you liked, and any fee owed on candidates introduced but not yet hired when you part ways.
Choosing and managing a staffing agency
Practical guidance for the conversation itself
Understanding what you are buying
Contingency
You pay only on a hire, usually a percentage of first-year base pay. Nothing is owed if nobody is placed, but the agency is running several searches at once and yours gets attention in proportion to how easy it looks.
Retained
You pay in instalments regardless of outcome, typically for senior or confidential roles. You get dedicated effort and a real market map, and you carry the risk if the search fails.
Temporary and contract
You pay an hourly bill rate; the agency pays the worker less than that and keeps the difference. The agency is the employer of record, so ask which costs, including insurance and payroll tax, sit inside the rate.
Temp-to-hire
A trial period followed by a conversion fee that usually declines the longer the worker stays. Get the conversion schedule in writing, because it determines when you can bring a good worker onto your own payroll affordably.
Before you sign the agreement
- 1Have counsel read the indemnification, insurance, and candidate ownership clauses. Those three cause almost all the disputes.
- 2Ask for the certificate of insurance and check the coverage dates yourself.
- 3Set the guarantee period and the remedy in writing, including what happens if the person is let go rather than resigning.
- 4Cap the ownership window on introduced candidates and exclude anyone already in your own pipeline.
- 5Agree a review point, such as ninety days or two searches, rather than an open-ended relationship that renews itself.
Warning signs
- Resumes arriving within an hour of the job order, which usually means an existing file rather than a search.
- Candidates submitted without their knowledge, or with contact details stripped so you cannot verify anything independently.
- The same candidate arriving from two agencies, which suggests your role is being shopped widely rather than worked.
- Reluctance to name the recruiter who will do the work, or a different person every time you call.
- Pressure to sign a multi-year agreement with automatic renewal before a single search has been run.
Getting better results once you have chosen
- Brief the recruiter with the hiring manager present, once, in detail. Written job descriptions passed along secondhand produce the wrong candidates.
- Give reasons for every rejection within a day. Silence is the fastest way to lose an agency's attention to a client who responds.
- Tell them your real budget and your real timeline. Agencies work around a range they suspect is soft.
- Keep the interview process short and tell candidates when to expect news. Long processes lose the people you most wanted.
- Track fill time, fallout, and one-year retention by agency. After two or three searches you will know which relationship is worth keeping.