Staffing agencies in Minnesota: the statewide market, the rules for agencies and what sick time adds to a bill rate

This report is for Minnesota employers choosing a staffing agency, job seekers comparing agencies, and B2B sellers whose customers are staffing firms across the state.

Minnesota's staffing market in Census data

The figures cover the state of Minnesota 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.

Half the temps have no county

The Census Bureau's 2023 county file shows where the agencies are, and where they aren't:

The Census Bureau files employers "without a fixed location within a state (or of unknown county location)" as statewide. In Minnesota that's 59 temp help establishments with 28,915 employees, plus 4 placement agencies: 48% of all the state's staffing employees. These are likely agencies whose temps are spread over client sites statewide rather than tied to one branch, and they're invisible in any county count. Counties marked "not reported" were published with a high-noise flag, meaning the noise the Census Bureau adds for confidentiality moved the figure by 5% or more.

Average pay is our calculation. Temp help holds 94% of the employees, an average of 87 per location, because temp agencies employ the people they place: the Census definition says they "are employees of the temporary help services establishment." A production temp in Stearns County or a contract analyst in Minneapolis counts on the agency's payroll. Executive search is a small-office business: 124 offices with 818 people.

The Census Bureau doesn't publish the combined cells from 250 up because one placement or search office's class is withheld, so the 44 is the total less the published classes. The temp help row is complete: 19 temp locations have 250 to 499 employees, 15 have 500 to 999 and 9 have 1,000 or more. In broader bands, 581 establishments have 1 to 19 employees, 215 have 20 to 99 and 107 have 100 or more.

The Census Bureau counts places of business with a payroll, not firms, so self-employed recruiters are missing. It also excludes professional employer organizations (NAICS 56133): Minnesota's 57 PEO establishments reported 32,717 employees, because PEOs carry their clients' staff on their payrolls. The snapshot is the week of March 12, 2023, and SEC EDGAR lists no exchange-listed staffing company with its business address in Minnesota.

Minnesota's rules for agencies and temps

For a temp, the employer under all of these is the agency, so its bill rate has to carry the cost.

Worked example: sick and safe time in the bill rate

Illustrative example. The wage and assignments are invented; the accrual rule is Minnesota Statutes 181.9446.

A Twin Cities agency pays a temp $20.00 an hour. Here's the most earned sick and safe time can add if every accrued hour is used:

Shorter assignments carry the higher cost per hour, because the 48-hour annual cap only bites late in the year. When you compare quotes, ask each agency whether its markup includes sick and safe time and Paid Leave premiums or bills them separately; an agency that looks 2% cheaper may simply be leaving them out.

Choosing a Minnesota agency

1. Match the agency to the work: light industrial and manufacturing, office and professional, IT contract, healthcare, direct hire placement or executive search. A PEO handles HR and payroll for staff you already employ.
2. Check the entity with the Minnesota Secretary of State's business search, and ask for workers' compensation and general liability certificates.
3. Ask for an itemized rate: pay, markup, overtime, sick and safe time, Paid Leave premiums and conversion fees.
4. Confirm which minimum wage applies at each work address, especially in Minneapolis and St. Paul.
5. Read reviews and call references: ClearlyRated lists Minneapolis agencies with client and talent ratings.

If you're looking for work, you accrue sick and safe time from your first day on an agency's payroll if you're expected to work 80 hours or more that year. If you're placed by a search firm, the employer can't make you pay its fee.

Selling to Minnesota staffing agencies

Minnesota's two new leave programs make payroll and leave administration the timely pitch: agencies now track sick and safe time accruals for workers on short assignments and remit Paid Leave premiums on a large, shifting workforce. The statewide-coded agencies, with tens of thousands of workers spread across sites, are the largest buyers of scheduling, mobile onboarding and timekeeping. Start from the Minnesota Recruiting and Staffing Association and the ASA directory, then read job postings to separate Greater Minnesota manufacturing branches from Twin Cities office and IT recruiters. Research takes time at this scale; Bebop finds agencies that match a description and explains why each fits. For working a list this size, see how to build a prospect list.

Subject: Sick and safe time on short assignments

Hi [first name],

I saw [agency] is filling [number] [role] orders across [region] this month. With temps accruing sick and safe time from day one and Paid Leave premiums now due on every worker's wages, short assignments are where tracking breaks.

We [what you do] so accruals and premiums follow each worker from site to site.

Would it help to check last quarter's accruals against it?

[Your name]

Local sources

Next step: see the state's wider economy in the report on companies in Minnesota.