Staffing agencies in Madison, WI: a small market, how to use more than one agency, and the Wisconsin rules

This page is for Madison-area employers choosing an agency, people looking for work through one, and B2B sellers whose customers are staffing firms.

Madison staffing agencies by the numbers

The figures cover the Madison, WI Metro Area (CBSA 31540) and two industry codes: NAICS 56131 (Employment Placement Agencies and Executive Search Services) and NAICS 56132 (Temporary Help Services). Source: US Census Bureau, County Business Patterns 2023.

These rows are from the Census metro file; its executive search payroll is flagged high-noise (changed by 5% or more for confidentiality), so it isn't shown.

What the employee count includes

A temp agency is the employer of every temp it places, so the 3,957 employees in temp help are mostly people working at client sites, counted on the agency's payroll. Placement agencies and search firms don't employ the people they place. Madison's 12 placement agencies still average 52 employees each, which suggests a few large recruiting operations rather than the one- and two-person offices common elsewhere.

Size and location

With few establishments, the Census Bureau withholds most size cells for the two codes combined. For temp help, it publishes every class below 250, and the three locations with 250 or more employees are the total less those classes. That puts 15 temp help branches at 100 employees or more.

Green and Columbia County employee totals are high-noise figures (altered by 5% or more for confidentiality), so they're left blank.

The limits: these are establishments with paid employees, not companies, so a national brand counts once per Madison branch; self-employed recruiters are left out; employment is the week of March 12, 2023; and professional employer organizations (NAICS 561330: 12 locations and 404 employees) are counted separately. No publicly traded staffing firm on SEC EDGAR is based in the Madison area.

The choice in front of you

Wisconsin rules to know

Employee leasing and worker's compensation. Wisconsin's Department of Workforce Development sets out how worker's compensation works when an employee leasing company co-employs a client's staff (Wisconsin Statutes 102.315, in effect since 1 April 2008). Smaller clients can be covered under the leasing company's master policy; clients large enough for experience rating need a multiple coordinated policy naming both the leasing company and the client. The leasing company must notify the department of a new master-policy client within 30 days. If you're signing with a PEO rather than a temp agency, ask which form of coverage applies to you.

Minimum wage. Wisconsin's adult minimum wage is $7.25 an hour, the same as the federal rate, with lower rates for some opportunity and tipped employees. Madison temp rates are set by the market, so compare quotes with what your own staff earn.

Check the entity and coverage. Ask for the agency's worker's compensation and general liability certificates naming your company, and confirm its business entity is active with the state.

Worked example: one agency or two?

Illustrative example. The company, order and fill rates are invented to show the arithmetic.

Yahara Valley Foods (yaharavalley.example) in Sun Prairie needs 20 temps for a six-week production run. Its usual agency fills about 70% of orders by the start date.

Splitting the order evenly doesn't help: each agency still misses 30% of its share. Sending the unfilled gap to a second agency does. Agree a cutoff (for example, 72 hours before start) when unfilled positions go to the secondary, put the same bill rate in both contracts, and track each agency's fill rate per order so the primary earns its place.

How to vet a Madison agency

1. Start small: a trial order of two or three people shows fill speed and quality.
2. Ask for its fill rate on orders like yours over the last quarter.
3. Ask for proof of coverage: worker's compensation and general liability certificates.
4. Get the full rate sheet: pay rate, markup, overtime, holiday and conversion terms.
5. Read client and worker reviews on ClearlyRated, and call one reference.

Looking for work? Agencies are paid by employers, so don't pay one to place you. The Workforce Development Board of South Central Wisconsin, which serves Dane and five neighboring counties, runs free job search and training programs.

Selling to Madison staffing agencies

The market is small enough to cover completely: 93 temp help locations, 12 placement agencies and 8 search offices. The 15 temp branches with 100 or more employees buy onboarding, scheduling, timekeeping and screening tools. The 59 offices with fewer than five employees are owner-run and buy sourcing and advertising. A useful angle for the larger branches is the fill-rate problem in the example above: anything that lets a branch fill more of an order by start day wins it the primary slot.

Sort agencies by reading their job postings, then research each one's clients. Bebop can find agencies that match a description and explain why each fits. For the method, read how to sell to small businesses, since most of the list is owner-run.

Subject: Filling more of [client]'s order by day one

Hi [first name],

I noticed [agency] is recruiting [number] production associates for sites around Dane County this month.

When a client splits work between agencies, the one that fills more seats by day one usually keeps the account. Our pre-boarding tool gets new hires through paperwork, safety videos and shift confirmations before their first day, so fewer drop out.

Would it be worth trying on your next start group?

[Your name]

Local sources

Next step: compare a much larger Midwest market in the report on staffing agencies in Chicago.