What Makes a Good Staffing Agency: 7 Questions to Ask Before Signing

There are roughly 1,200 staffing agencies operating in Canada. Some are national firms with thousands of employees. Some are one-person operations working out of a spare bedroom. The range in quality, reliability, and professionalism is enormous — and the consequences of choosing poorly fall on your operation, not on the agency.

A bad staffing partner sends unscreened workers who do not show up for their second shift. A good one sends vetted candidates who integrate into your team and contribute from day one. The difference is usually visible before you sign the contract, if you know what to look for.

Here are seven questions to ask before committing to a staffing agency. The answers will tell you what you need to know.

1. What Is Your Fill Rate, and How Do You Track It?

The fill rate is the percentage of job orders that the agency successfully fills by the requested start date. It is the single most important performance metric in temporary staffing.

A strong agency maintains a fill rate above 95% for general labor and above 90% for specialized roles. Anything below 85% means the agency is regularly failing to deliver workers when promised.

Ask for their fill rate for the last 12 months, broken out by role type and client industry. If they cannot provide this number, they are not tracking it — which means they are not managing it. Walk away.

Also ask what happens when they cannot fill an order. Do they notify you 24 hours in advance? Do they have a backup pool? Or do you find out when the worker simply does not arrive? The answer reveals how the agency handles failure, which matters more than how they handle success.

2. What Does Your Screening Process Include?

"We screen all our candidates" means different things to different agencies. Get specific:

• Identity verification — do they verify government ID and work authorization?
• Reference checks — do they call previous employers, and how many?
• Skills assessment — for roles requiring specific skills (forklift, RF scanner), do they test in-house or take the candidate's word for it?
• Criminal background check — is it standard or optional? Which database do they use?
• Drug testing — do they offer it? Is it pre-employment or random?

An agency that runs a phone interview and calls it screening is not protecting your operation. A rigorous screening process costs the agency time and money — which is why cheap agencies skip it and why their workers underperform.

Ask to see their intake form or candidate profile. If it is a single page with name, phone number, and availability, the screening is superficial.

3. Who Is the Employer of Record, and What Does That Mean for Liability?

In a temporary staffing arrangement, the agency is typically the employer of record for the temporary worker. This means the agency is responsible for:

• Payroll, including all statutory deductions and remittances
• CPP/QPP, EI, and QPIP contributions
• CNESST (workers' compensation) coverage and premiums
• T4/RL-1 issuance
• ROE (Record of Employment) when the assignment ends

Confirm this in writing. Some agencies operate as "placement agencies" rather than "temporary staffing agencies" — the legal distinction matters. A placement agency finds you a candidate, but you become the employer. A temporary staffing agency employs the worker and assigns them to your site.

Ask for a copy of their CNESST registration and their industry classification unit rate. If a workplace injury occurs and the agency's CNESST coverage is not in order, the liability may default to you as the client. This is not theoretical — it has happened.

4. What Is Your Replacement Guarantee?

Workers quit. Workers no-show. Workers are not the right fit. A good staffing agency has a clear policy for these situations:

• No-show replacement: If a worker does not show up for a scheduled shift, the agency should provide a replacement within 2 to 4 hours, or by the next business day at the latest. No charge for the missed shift.
• Performance replacement: If a worker is not meeting performance standards, how quickly can they be replaced? A reasonable standard is 24 to 48 hours.
• Guarantee period: Many agencies offer a guarantee period — typically 4 to 8 hours of work. If the worker is unsuitable within that window, no charge applies.

Get the replacement policy in writing as part of the service agreement. Verbal promises from a sales rep do not survive a dispute.

5. What Are Your Rates, and What Is Included?

Agency pricing should be transparent. Ask for a detailed breakdown:

• Bill rate — the hourly rate you pay for the worker
• Pay rate — the hourly rate the worker receives
• Markup percentage — the difference, expressed as a percentage of the pay rate
• What the markup covers — statutory contributions, workers' compensation, vacation pay accrual, recruitment costs, agency overhead, profit margin
• Overtime calculation — is the markup applied to the overtime rate, or is there a separate overtime bill rate?
• Holiday pay policy — who pays statutory holiday pay? At what threshold of service?
• Conversion fee — if you want to hire the temp worker permanently, what is the fee and when does it apply?

An agency that will not break down their bill rate is hiding something — either their margin is unusually high, or their statutory compliance is incomplete. Transparency is non-negotiable.

Compare rates across agencies, but compare bill rates, not pay rates. An agency offering a lower bill rate might be paying the worker less, which means they are drawing from a lower-quality candidate pool. Or they might be cutting corners on compliance — underpaying CNESST, skipping EI premiums, or misclassifying workers. Both outcomes cost you more than the savings.

6. What Industries and Roles Do You Specialize In?

A staffing agency that serves warehouse, manufacturing, hospitality, office administration, and IT from the same branch is a generalist. There is nothing wrong with generalists for straightforward roles, but if your needs are specialized — licensed forklift operators, food processing workers with HACCP training, bilingual customer service — a specialist will outperform a generalist.

Ask what percentage of their placements are in your industry. Ask for client references in your sector. Ask if their recruiters have worked in or visited the types of facilities they staff.

A recruiter who has never set foot in a warehouse will struggle to evaluate whether a candidate is actually suited for 10-hour shifts on a concrete floor in a cold storage environment. Industry knowledge matters at the recruitment level, not just the sales level.

7. How Do You Handle Safety and Training?

Temporary workers are overrepresented in workplace injury statistics. In Ontario, temporary workers experience workplace injuries at a rate 13 times higher than the general workforce according to some studies. The reasons are predictable: insufficient safety training, unfamiliarity with the site, reluctance to ask questions, and pressure to perform from day one.

Ask the agency:

• What safety training do you provide before dispatch? WHMIS? Workplace-specific hazard orientation? PPE use?
• Do you conduct site visits to understand the hazards your workers will face?
• What is your policy when a client does not provide adequate safety training for temporary workers on site?
• What is your lost-time injury rate for the last 24 months?

An agency that takes safety seriously will have answers to all of these. An agency that treats safety as the client's problem is transferring risk, not managing it.

Under CNESST and WSIB regulations, both the agency and the client employer share responsibility for worker safety. If a temporary worker is injured on your site due to inadequate training, both parties can face penalties. The staffing agency's safety culture directly affects your compliance risk.

The Underlying Question

These seven questions all point to the same underlying question: is this agency a professional operation that will protect my business, or a body shop that will create more problems than it solves?

The agencies that invest in screening, compliance, safety training, and transparent pricing cost a few dollars more per hour on the bill rate. The agencies that cut corners on all of those things cost a few dollars less per hour — and then cost significantly more when a worker is injured, a payroll remittance is missed, a shift goes unfilled, or a performance issue goes unaddressed.

The cheapest staffing agency is rarely the least expensive one. Ask the questions. Evaluate the answers. Then decide.