Eli5: how do temp agencies, suppliers, msps, and corporations all work? How don’t companies directly hire? Why are there so many dimensions? How do they all work in unison?
In: Economics
>How don’t companies directly hire?
Because it’s cheaper to pay a business, who’s entire business is to deal with that type of stuff, to do it instead of having people on your payroll who don’t need to do it 24/7 because a business likely isn’t hiring constantly.
A business(corporation) talks to a temp agency and gives them their requirements for the job(s) they need to fill. The Temp agency then goes through all of the people in their system who match that criteria. They then send the required number of people needed to fill whatever positions the business is looking for.
Suppliers are just businesses who have products that a business needs and they sell them to the business. Generally a business will have a contract with a single supplier for specific products making them the sole business they’ll get those products from with a guarantee that they will get you the products you need, when you need it (hopefully).
Apparently MSPS is an outside IT company. The same as a temp service, it might be cheaper to pay them over having your own in-house IT department.
The reason a company would work with a supplier or a temp agency instead of hiring the staff itself is because that makes more economic sense for the specific job.
For example: Let’s say that your company office has a small garden with a grass field and some hedges. Now someone has to maintain this: mow the grass and trim the hedges.
But it’s just a small garden and it only needs mowing every two weeks at most. It doesn’t make any sense to hire a full time gardener on your payroll if you only have half a day worth of work every two weeks.
So instead you work with a specialized gardening company and they sent a guy every two weeks to do the work.
Think of a business like a convenience store. Their core business is 24 hour availability of drinks, snack foods, batteries, and prepaid cards. The majority of operations are scheduling staff and ordering product. The IT functions required for the internet connection, POS system, and lottery stuff is critical, but such a small percentage of their requirements that it doesn’t make sense to hire a full time, or even a part time person for it. So they hire a company that’s super good at internet and POS systems to swing by when they need help.
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