The Difference Between Payroll, Staffing and Recruitment Agencies


In order to simplify your human resources process, as a company you often call upon external specialized agencies. Nevertheless, it is important to distinguish the agency you will work with according to your needs.

Through this article, Pentabell unveils the differences and overlaps between payroll, Staffing and recruitment agencies.

Staffing agency

Recruitment and staffing agencies are both involved in recruitment, but the services they provide are not the same. Staffing agencies provide temporary workers, while recruitment agencies focus on finding full-time employees.

The staffing agency will find qualified candidates for you quickly and efficiently for temporary assignments. They have a large database of qualified candidates, an extensive network of contacts to tap into, and often have access to sophisticated systems to find people with those hard-to-find skills.

This type of agency is particularly useful when:

  • A company has a large number of positions that need to be filled quickly.
  • The positions are of short duration (such as projects or events).
  • No high-level skills or training are required, and when the pay is relatively low.

As a company you have the opportunity to see your employees at work before you even commit to hiring them. Also, the choice of this type of structure allows you to transfer the cost of recruitment to them and to save time, given the speed of their processes.

Staffing agencies will generally have a pool of active candidates, i.e., people who are actively seeking employment, that they maintain. They do not handle: benefits arrangements, taxes or even extensive background checks.

Their budget is often limited and they focus on temps interested in the duration and pay of the position, it’s for unskilled labor, and without high requirements.

Reasons To Work With A Staffing Agency

Time saving

Staffing agencies are specialized in recruitment. In addition to having their own platform adapted to the needs of this process, they regularly use the job search tools available. Thus, they recruit quickly and efficiently. While you devote your time and energy to other essential activities for your organization.

Streamline the selection process

By entrusting your pre-selection to a staffing agency, it takes care of receiving calls and applications for the position as well as the pre-selection. This way, you will only receive the applications that fully meet your search criteria and that are available for the job interview. Which helps you focus on your priority tasks.


If you wish to post a job confidentially, it is possible to do so through the staffing agency. This way, your name as an employer will not appear in the posting. It will only be disclosed to the potential candidates targeted by the agency.

Recruitment agencies

If you want to hire employees for permanent, full-time positions in your company, you opt for a recruitment firm rather than a staffing agency. The recruitment process can be time-consuming, as there are several steps to take, to make the best decision.

The candidates retained by recruitment agencies are highly qualified people who are interested in the company’s culture and are looking for personal and professional fulfillment.

In a recruitment agency, the employment contract is made directly between the employee and the employing company. Unlike staffing agencies, employees have an employment contract with the staffing agency, but will work for another company.

Reasons To Work With A Recruitment Agency

The diplomas and experience of the candidates are verified and validated

By entrusting your needs to a recruitment firm, you can be sure that the candidates presented to you are honest and competent. The firm takes the time to verify all the details: diplomas, training certificates, previous experience (feedback from former employers regarding the employee).

Access to a pool of candidates who are not actively searching for a job

Another advantage that the recruitment firm gives you is access to a pool of candidates who would not necessarily have applied for one of your offers.

Each recruitment firm has its own talent pool of candidates with whom they have exchanged in recent years. They will not hesitate to source candidates in order to propose the talents you will need.

Time saving

The time spent sourcing (identifying) talent is very important. You have to scour numerous platforms, conduct initial qualification interviews, verify…etc. All these steps consume precious time for your recruiting resources. When you outsource your needs to a recruitment firm, the firm will come back to you in a few days with a shortlist of qualified candidates that match your expectations.

Payroll agencies

A payroll agency is at the same time the employer of a freelance consultant and the service provider for client companies. It offers its structure and its resources to the consultant carried and accompanies him in the development of his activity. The latter is completely free to choose his missions and the conditions of their realization, namely the management of his time and his place of work. The payroll agency , meanwhile, takes care of all the administrative, accounting and legal tasks related to the activity of the freelance consultant.

Payroll agencies offer the following services:

  • Tracking employee time and attendance.
  • Creating and adjusting direct deposit accounts.
  • Processing payroll taxes and ensuring accurate deductions.
  • Preparing and sending electronic payroll records to employers and employees.
  • Complying with all state and federal payroll laws.
  • Overseeing workers compensation payments relating to payroll.

Reasons To Work With A Payroll Agency


Paying the payroll team, payroll processing, subscribing to payroll software, managing employee queries, and so on all add up to make in-house payroll processing expensive.

Having an in-house payroll team may appear to be beneficial at first. However, all is not that promising.

For starters, a payroll team may lack transferable skills to collaborate with or on cross-functional tasks. Second, as your staff grows, the cost of hiring, establishing, and maintaining a payroll team skyrockets. Many business owners and leaders make the mistake of underestimating the time and resources required to manage payroll. Third, you must keep up with tax rules, personnel, and accounting deadlines.

Saving costs have traditionally been an advantage of payroll outsourcing. Companies that outsource payroll management save 18% more than companies that process payrolls in-house.

Enhanced process

One of the benefits of outsourcing payroll services is having access to specialized skills and cutting-edge technology. By utilizing these advantages, you improve your entire payroll process.

Great Savings

One of the consistent benefits of outsourcing payroll services is the ability to save time and money. Companies that partially outsourced payroll services increased by 300 percent between 2015 and 2019.

To entrust us with your recruitment, contact us now!

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