How does a temp agency make money?

In a temporary labor market that is certainly volatile, as it is highly subject to economic variations, but estimated at more than 30 billion euros per year, temporary employment agencies are paid to recruit workers. employees and make them available to companies that need them. What is the state of the temporary labor market? How do temp agencies make money? How to open a temp agency? Response elements.

Char: a market recovering after the crisis in Covid-19

By definition, Temporary employment changes according to the economic context. And for good reason: it is definitely in the interest of temporary employment for companies to have employees according to their needs. Temporary workers are a variable of adjustment of the labor force. The more activity, the more we get, the less activity, the less we hire.

Therefore, it is clear and logical that the temporary labor market recorded an unprecedented decline in 2020 with approximately 300,000 fewer temporary employees than last year, according to the Observatory of Interim and Recruitment (OIR).

However, once the closures are over and the resumption of many sectors, in particular shops and restaurants, the temporary job market will typically return to its pre -crisis level in September 2021. A few months later, the number of temporary workers exceeded the pre -crisis level of 7.2%.

However, this recovery is the opposite: if the industry remains the main employer of temporary workers (36% of temporary workers in France), followed closely by services that get almost 10% more temporary workers, the construction industry, for its part, is lagging behind, with a sharp drop of almost 13% in the number of temporary workers.

Overall, 2022 and the coming years will be years of strong recruitment and the general flexibilization of the labor market will continue to support temporary employment and strengthen the place of temporary employment agencies as privileged interlocutors for French companies. You just need to carefully analyze the target catchment area to open your temp agency to carefully select your segment and avoid failures.

Temp agencies: service providers

Understand how temp agencies make moneyit is important to understand how they work. Their economic model is directly related to the organization of temporary employment and services provided to client companies..

  • The temporary employment agency selects job -seeking candidates and hires some of them to build its “pool” of employees.
  • When a company needs temporary workers, the agency in the client’s company determines the job description, expectations in terms of knowledge and interpersonal skills, etc.
  • It selects from its “pool” of employees the one that matches or, if necessary, recruits a new person to meet the needs of the client’s company.
  • This makes the employee available to the client’s company, for the period provided in the contract. And this, by taking care of all administrative procedures.
  • It then invoices the client company for the cost of the service, including the cost of the employee but also the cost of the service provided.

During these stages, the client’s company never hired the temporary worker: the latter remained an employee of the temporary employment agency.

To sum up, the temporary employment agency not only pays the employees it makes available to its clients but also it provides advice, support and administrative services.

Therefore, the temp agency invoices this risk-taking (this is the agency that assumes any legal risk associated with taking, occupational medicine, etc.) and the service it provides.

This is why, for example, an employee with the lowest wage directly hired would be worth on average, on a 2-month fixed-term contract, € 2,250/month, while a temporary worker, at the same time, could be worth approximately € 3,200/month. moon. The difference is the temp agency compensation.

To note: the interim agency therefore does not pierce part of the employee’s wages for its own benefit! It invoices a service IN ADDITION to the employee’s salary, to the client’s company.

Therefore, the client’s company buys convenience and flexibility from the temporary employment agency.

Opening temp agency: specific barriers

It is precisely for all these reasons that temporary employment agencies are subject to strict constraints.

  • They should get a financial guarantee equal to at least 8% of the previous year’s turnover to allow the payment of salaries, bonuses, allowances and contributions due, in the event of default on its part.
  • They should get professional liability insurance specifically in temporary employment companies, making it possible to ensure specific risks: lack of temporary workers available, non -compliance with labor law, unforgivable wrongdoing on the part of the employer, accidents at work of employees available, etc.
  • They should report to the labor inspectorate.
  • They must also subscribe to the Interim Provident scheme.

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