Monthly Archives: September 2019

Losses For Companies That Use Staffing Agencies

Like a double-edged sword, staffing agencies can also become weapons for companies. Indirectly, this is indeed quite risky, especially if the company recruiting the staffing agency does not have a clear agreement procedure and has many loopholes for violation by irresponsible parties. The following are some of the disadvantages that can occur to companies that use the services of a staffing agency:

• Loss of managerial control
Managerial control will belong to other companies, because the staffing agency service company will not encourage the company, but rather be encouraged to make profits from the services they provide. They only serve as a bridge between employees and companies asking for their services. The company does not have full authority over employees so all aspects relating to employees will be regulated by the staffing agency. Companies can only make rules for employees from the staffing agency. They cannot dismiss or dismiss employees unilaterally because the authority is in the staffing agency.
• There are hidden costs
Any matters not stated in the contract will be the basis for the company to pay additional fees. For example: if there are no overtime costs for employees but the contract does not specify if the company does not cover overtime, then the staffing agency can propose this, so there will be hidden costs incurred by the company.

• Security and confidentiality threats
Staffing agency service companies can receive information about payroll, medical and other confidential records. This is the most terrible because all company data can be known to outsiders. However, if there is a clear and firm contract, then this can be avoided.

All of these losses are not a certain thing that happens to every company that uses a staffing agency because all of that can be prevented by the existence of a clear and detailed MOU or contractual agreement. Therefore, before contacting the agency, the company is advised to make rules between parties 1 and 2 that can be made by legal experts.