Society For Human Resource Management (SHRM) Certified Professional Practice Exam

People referred to a temp agency to work somewhere may be subjected to what?

1. In-house hiring

2. On-call hiring

3. Temp-to-perm hiring

4. Payrolling

The correct answer is: Payrolling

When individuals are referred to a temp agency for work, they often experience a process known as payrolling. This practice involves the temp agency managing the payroll for workers who are placed at client companies. In this arrangement, the temp agency employs the workers while they work at another company, thus handling all aspects related to wages, benefits, and legal requirements. Payrolling is particularly beneficial for organizations that prefer to maintain flexible staffing levels without permanently adding to their workforce. This allows businesses to adjust their workforce according to demand without the long-term commitment associated with traditional hires. In contrast, in-house hiring would imply a direct employment relationship between the worker and the company where they are placed, which does not align with the purpose of temp agencies. On-call hiring suggests a more casual or as-needed employment situation, often geared towards emergencies. Lastly, temp-to-perm hiring refers to a pathway where temporary workers can transition into permanent roles; while related to temp agencies, it does not capture the essential element of managing payroll, as is the case with payrolling.