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Risk Management for Temporary Staffing Agencies

Tuesday, October 15, 2013

Temporary staffing and employment agencies face unique risks and exposures due to the fluidity of their workforce and their lack of supervisory control at the client facilities where temporary employees are placed. The fact that in most cases the agency assumes liability for the actions of its off-site employees only compounds the challenge.

It can sometimes seem as though high workers’ compensation premiums and costly lawsuits are industry inevitabilities, but that doesn’t have to be the case. Although there is little your agency can do to prevent occupational accidents and injuries once an employee is placed at an off-site location, by taking a proactive approach to managing risk—from screening employees to selecting clients to maintaining proper insurance coverage—you can reduce your exposures to a manageable level.

Employee Screening

If an employee misrepresents his or her credentials or makes errors that cost the client money, your agency could be held liable. That is why it is imperative that you thoroughly screen all potential employees during the hiring process. Although background checks do present some costs, they are an invaluable risk management tool and, overall, the benefit they confer generally outweighs the upfront costs. The screening process should include the following elements:

·         Identity verification

·         Social security number verification

·         Sex offender registry check

·         Past employment verification

·         Education verification

·         Professional license verification

·         Testing to verify skill set

·         Motor vehicle reports

·         Drug testing

To simplify the task, you may find it helpful to outsource some aspects of the process to a background screening service provider. If you use an online application, the completed fields can be linked directly to the screening provider’s website, which will extract the necessary information for the background check.

Client Risk Assessment

In the same way that you wouldn’t hire a new employee without first checking his or her credentials, you shouldn’t bring on a new client without first exercising due diligence to ensure the client is a proper fit for your agency. Before agreeing to work with a potential client, ask them for the following information:

·         Overview of client’s business operations

·         Specific job descriptions, including

o    Examples of tasks

o    Personal protective equipment (PPE) requirements

o    Safety requirement

o    Potential hazards

·         Existing safety manual(s)

·         OSHA reports

·         Loss runs from at least the last three years

As tempting as it may be to grow your business as rapidly as possible, it may prove more profitable in the long term to refuse potential clients who engage in hazardous work or have a checkered safety record. Often, the short-term influx of revenue does not make up for increased insurance premiums or the elevated threat of a lawsuit.

If, after evaluating the frequency and severity of claims and performing a site assessment of any location with significant hazard exposures, you decide to bring on a new client, put the agreement in writing with a contract that delineates the division of authority and responsibility between the client and your agency. That way, when a problem arises, there will be less confusion over who is responsible.

Communication is Key

Even if day-to-day employee supervision is your client’s responsibility, you should maintain periodic communication with your employees to ensure that small issues are addressed before they escalate and that clients are following the safety guidelines outlined in their safety manuals, including providing workers with the proper PPE.

Helping Sick or Injured Employees Return to Work

Actively follow up with any employee who misses work, regardless of the reason. If an employee is injured on the job and is unable to continue in their current role, try to place the worker with another client who can accommodate the employee’s work restrictions.

Return to work programs have been shown to reduce employee turnover and lower workers’ compensation costs. If your agency doesn’t have a formal return to work program in place, The Horton Group, Inc.  can provide you with the tools and resources to help you design and implement a proactive and successful program.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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