Tag Archives | agency

Recruiting vs Staffing

Difference Between Recruiting vs Staffing

The difference between recruiting vs staffing is that recruiting is acquiring talent to be a full-time employee. Whereas staffing is the hiring of an agency to provide temporary workers.

Recruitment / Placement

There are many recruitment agencies or placement agencies. It may also be referred to as a retained search. They typically charge a percentage of the hire’s salary as a placement free. Those agencies then collect resumes, interview, vet, and eventually get the client’s approval for hire. After the client approves and hires the recruit, the agency has finished their job. The client company not only hires the recruit, but is also responsible for the Social Security, Medicare, and employment taxes. In addition, those employees usually expect benefits such as health insurance and 401K.

Staffing Agency

Conversely, a staffing agency fills the gap when a client company needs a number of employees immediately but does not have the resources (capital) to afford all that is involved with hiring an employee. Staffing provides temporary workers that can be specialized to the client and bills them on an agreed to hourly rate

Hiring Process Through a Staffing Agency

A staffing agency has numerous job ads published to recruit the best talent. The agency then reviews the resumes, interviews potential candidates, and eventually, finds the perfect employee to fill a position at a client company. Depending on the demand, agencies can have a significant amount of employees that they can deploy.

Hiring a Staffing Agency

When hiring a staffing agency, it is important to assess your needs. Are you seeking specialized workers? Do you need 80 employees tomorrow or just 2? Different staffing agencies are going to be able to help you with what you need.

Advantages of Hiring Through a Staffing Agency

Some advantages of hiring through a staffing agency include seeing a potential employee in action before making the commitment to hiring them. Companies also are able to offset the costs of hiring to the staffing agency – essentially stretching their dollar. Additionally, companies are able to get a number of employees quickly, bypassing the weeks hiring usually takes.


Looking to hire a staffing agency to fill your accounting department needs? The Strategic CFO has recruited the best talent to serve your staffing needs. Click here to learn more about how we can serve you best.


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What is a Staffing Agency?

See also:
Recruiting vs Staffing
What the Current Hiring Process Costs
When You Know It’s the Right Hire

What is a Staffing Agency?

A staffing agency is an entity that has employees that can be hired out for temporary or long term work. A staffing agency is also referred to as an employment agency. It provides temporary workers. Some agencies are industry focused or specialized. For example, The Strategic CFO’s staffing line focuses on accounting and financial positions.

Staffing agencies are different from placement agencies or retained search services. Placement agencies collect a fee to recruit a full-time employee. Those employees belong to the client company – not the agency.

How Do Staffing Agencies Work?

Staffing agencies conduct both the hiring and firing of employees. They also pay for the employment taxes, Medicare, Social Security, etc. The client company specifies the amount of temporary workers needed and the hourly rate. Frequently, the agency specifies the hourly rate for each worker, but it is negotiable.

Why Hire a Staffing Agency

One would hire a staffing agency if they need employees now and they want to offset employment costs (benefits, employment taxes, etc.). There is either a time constraint or a resource contract. Some of the benefits include getting a number of employees quickly and knowing that they are qualified for the position.

Oftentimes, agencies have run credit reports, criminal background checks, and drug tests on those employees so the client never has to worry.

Difference Between Hiring and Working For a Staffing Agency

Whether you are seeking to work for an agency or hiring an agency, there are several things that you need to know.

Working for a Staffing Agency

When you work for an agency, you can expect to work with companies for anywhere from a couple of months to a couple of years. You are technically an employee of the agent and working with the client. However during your time at a client’s office, you act as a regular employee of the company. In some cases, companies will hire the employee from the staffing agency. This is a great opportunity for those employees as they get exposed to different industries and company cultures. Temporary work also allows you for you choose your own schedule. Only want to work a couple days a week? Or have the summer off? Some agencies will work around their staff.

The Strategic CFO’s staffing line brings each staffer in every quarter to review their work and to further their financial leadership skills. If an bookkeeper wants to become a staff accountant, then there is opportunity to get the training needed to make that leap.

Hiring a Staffing Agency

When you hire an employment agency, you need to choose the right agency. Are you looking for positions that anyone can do or are you seeking for a more specialized trade? There are staffing agencies that supply manufacturing workers, domestic workers, and/or professional employees.

It is important the client company is communicating often with the agency to get the most out of the relationship. If a particular employee doesn’t fit, then the agency needs to know in order to replace that employee. Agencies have access to a variety of staff and make it their goal to pair the right employee with the client company.


Looking to hire a staffing agency to fill your accounting department needs? The Strategic CFO has recruited the best talent to serve your staffing needs. Interested? Click here to learn more about how we can serve you best.


Staffing Agency

Staffing Agency

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Non-Investment Grade Bonds (Unsecured Debentures)

See Also:
Common Stock
Company Valuation
Convertible Debt Instrument
Coupon Rate Bond
Covenant Definition of a Bond Contract

Non-Investment Grade Bonds (Unsecured Debentures)

A non-investment grade bond, also called a speculative bond, a high yield bond, an unsecured debenture, or a junk bond, is a bond that is considered a low quality investment because the issuer may default. Rating agencies have systems for rating bonds as investment grade or non-investment grade. Non-investment grade bonds offer higher yields than investment grade bonds to compensate for the greater risk.

High Yield Debt (Junk Bonds)

High Yield Bond Ratings 

Credit rating agencies rate bonds based on the creditworthiness of the issuer. A bond is given a grade. Rank the grades like this: AAA, AA, A, BBB, BB, B, CCC, CC, C, and at the bottom is D.

The highest quality corporate bonds will have a rating of AAA.  The lowest quality bonds are rated D, or already in default. Anything rated BBB or above is investment grade. Anything rated BB or below is non-investment grade. Different rating agencies may use different variations of the above rating system. For example, an agency may include plus (AA+) and minus (BBB-) signs to add levels to the rating system.

Junk Bond Yields 

Junk bonds return higher yields than high-quality bonds. The higher yield compensates the investor for the greater risk associated with the lower quality investment.

Junk Bond Index

A junk bond index tracks the performance of non-investment grade bonds.

Junk Bond Trader

A junk bond trader is an individual who trades non-investment grade bonds in the marketplace.

Junk Bond Fund

A junk bond fund is a mutual fund or an exchange-traded-fund (ETF) comprised of non-investment grade bonds. Junk bond funds are convenient financial instruments for investing in high yield bonds.

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Credit Rating Agencies

See Also:
5 Cs of Credit
What are the 7 Cs of banking
Line of Credit
How Important is Personal Credit in Negotiating a Commercial Loan?
Improve Your Credit Score

Credit Rating Agencies

Credit rating agencies rate bonds based on the creditworthiness of the bond issuer. Agencies publish letter grades for bonds to indicate the quality of the security and the ability of the issuer to repay the debt. In other words, a credit rating agency determines the degree to which a bond issuer will be able to repay their debt. Well-known credit rating agencies include Fitch, Moody’s, and Standard and Poor’s.

Credit Ratings Definitions

Credit rating agencies rate bonds as investment grade corporate bond (high quality) or non-investment grade (low quality; junk bond) based on the creditworthiness of the issuer. A bond is given a grade, and the grades are typically ranked like this: AAA, AA, A, BBB, BB, B, CCC, CC, C, and at the bottom is D.

The highest quality corporate bonds will have a rating of AAA. (US government bonds are considered risk-free and are ranked above AAA.) The lowest quality corporate bonds are rated D, or already in default. Anything rated BBB or above is investment grade. Anything rated BB or below is non-investment grade corporate bond. Different bond rating firms may use different variations of the above rating system. For example, a rating agency may include plus (AA+) and minus (BBB-) signs to add levels to the bond rating system.

Lower quality bonds return higher yields than high-quality bonds. The higher yield compensates the investor for the greater risk of default associated with the lower quality investment.

Bond Rating Systems

Here are some examples of bond rating systems:

Fitch’s Rating System:

Investment grade corporate bond:

AAA, AA+, AA, AA-, A+, A, A-, BBB+, BBB, BBB-

Noninvestment grade corporate bond:

BB+, BB, BB-, B+, B, B-, CCC+, CCC, CC-, CC, C, D, NR

Moody’s Rating System:

Investment grade corporate bond:

Aaa, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2, Baa3

Noninvestment grade corporate bond:

Ba1, Ba2, Ba3, B1, B2, B3, Caa1, Caa2, Caa3, Ca, C

For details regarding Standard and Poor’s credit rating system:

standardandpoors.com

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Commercial Agents

See Also:
How to Select Your Commercial Insurance Broker
Proforma Invoice Example
PEO or Outsource Payroll

Commercial Agents

Commercial agents are individuals, who may be part of a commercial agency, hired by a company to represent one or more principals within an organization. Typically, they will seek out and acquire business on behalf of his principals. Furthermore, they are generally compensated based on a percentage of the sales revenue. A commercial agency contract predetermines their commission amount in a commercial agency contract executed by both parties.

Commercial Agency Contract

A commercial agency contract is a written agreement that defines the relationship between an agent and his principals. The commercial agency agreement will outline the obligations, interests and authority levels authorized to the agent. Furthermore, commercial agents may require a certain level of management by the principals. This is to ensure an agent represents the principal’s best interests in each transaction.

Commercial Agents Law

This law protects the agents and the principals in the contractual relationship when there is a breach in the commercial agency agreement. For example, a commercial agents’ breach can release the principal from obligations outlined in the commercial agency contract. You can enforce the commercial agency agreement in recognized law if contractual issues arise between the entities.

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Agency Costs

See Also:
Are You Collecting the Data You Need to Run Your Business?
Average Cost
Sunk Costs
Restructuring Expense
Joint Costs
Commercial Agents

Agency Costs Definition

The agency costs definition is the internal costs incurred from asymmetric information or conflicts of interest between principals and agents in an organization.

In a corporation, the principals would be the shareholders and the agents would be the managers. The shareholders want the managers to run the company in a way that maximizes shareholder value. Conversely, the managers may want to run the company in a way that maximizes the managers’ own personal power or wealth, even if it lowers the market value of the company. These divergent interests can result in agency costs. There are three common types of agency costs: monitoring, bonding, and residual loss.

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Types of Agency Costs

When the principals attempt to monitor or restrict the actions of agents, they incur. Learn about the types of agency costs below:

Monitoring Costs

For example, the board of directors at a company acts on behalf of shareholders to monitor and restrict the activities of management. This is to ensure that behavior maximizes shareholder value. The cost of having a board of directors is therefore, at least to some extent, considered an agency monitoring cost. Costs associated with issuing financial statements and employee stock options are also monitoring costs.

Bonding Costs

Furthermore, an agent may commit to contractual obligations that limit or restrict the agent’s activity. For example, a manager may agree to stay with a company even if the company is acquired. The manager must forego other potential employment opportunities. Consider that implicit cost an agency bonding cost.

Residual Losses

Residual losses are the costs incurred from divergent principal and agent interests despite the use of monitoring and bonding.

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Agency Costs Definition, Types of Agency Costs, Agency Costs

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Agency Costs Definition, Types of Agency Costs, Agency Costs

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