How Much Does It Cost to Hire a Temp Worker in the GTA?

Hiring temporary workers is becoming increasingly common across the Greater Toronto Area (GTA), especially in industries like manufacturing, logistics, food production, warehousing, and general labour. Many employers assume hiring temps from an agency is more expensive than dealing with temps using the internal resource, i.e.,  company's own recruiter or recruiting team., but is it true in all situations?  In this article we will try to show the true cost of hiring temps directly vs using a temp agency. Our argument is that when using it correctly-  a reputable licensed staffing agency can be more economical to the company than an internal recruiter.  We will also show at which point it actually makes more sense to hire internal team and when its more efficient to use an agency., This guide breaks down the real cost of hiring temp workers in the GTA, what agencies typically charge, and why Alliance Employment Services consistently helps employers reduce hiring risk, overhead, and operational costs.

Full-Time Recruiter vs Staffing Agency: Cost Comparison for Temp Workers in the GTA

When businesses need temporary staff, they often face a choice: hire through a full-time internal recruiter or work with a staffing agency. Understanding the cost differences is crucial for making a cost-effective decision.

Hiring through a full-time recruiter involves several direct and hidden costs:

• Recruiter salary and benefits: A full-time recruiter in the GTA may earn $60,000–$95,000 annually, plus benefits such as health coverage and pension contributions.
• Recruitment tools: Job board subscriptions, applicant tracking systems (ATS), and software for background checks or skills assessments.
• Administrative overhead: Internal HR staff must manage payroll, WSIB, compliance, onboarding, and replacement for any bad hires.
• Hidden costs of turnover: If a temp worker does not work out, the company bears the full cost of rehiring, including time spent interviewing, onboarding, and training replacements.

Even for small or seasonal staffing needs, these costs remain fixed, making the internal recruiter model less efficient when hiring temporary workers intermittently.

Sources- Indeed, Payscale

In contrast, staffing agencies like Alliance Employment Services offer a variable, predictable cost model. Companies pay only for the hours the temp worker works, and the agency covers:

• Recruiting, advertising, and pre-screening
• Interviewing and background checks
• Payroll and HR administration
• WSIB, insurance, and compliance
• Worker replacement guarantees

Agencies typically charge a markup on top of a temporary staff member’s salary, which can vary depending on the role, placement terms, etc. It could be higher for specialized or high-risk positions (e.g., skilled trades) and lower for less skilled roles. This markup covers recruitment, payroll, insurance, compliance, and guarantees for worker replacements, allowing companies to avoid fixed overhead and administrative burdens. By leveraging agency staffing, businesses can scale their workforce quickly, reduce the risk of bad hires, and often achieve a more cost-effective solution for temporary or seasonal staffing needs.

Key Advantages of Using Internal HR for Temp Hiring

1. Culture and Fit Alignment

• Deeper Understanding of Company Culture: Your internal HR team intimately knows the company values, mission, and working environment. They are better positioned to vet candidates for cultural fit, which is crucial for engagement, morale, and successful integration, even for short-term roles.
• Knowledge of Internal Needs: They have direct access to hiring managers and understand the specific technical skills, team dynamics, and soft skills required for the role far better than an external agency might.

2. Cost Control and Efficiency

• Keeping Costs In-House: By managing the hiring process internally, you avoid the significant fees, markups, and commissions charged by staffing agencies, which can often be 20% to 50% of the temporary worker's pay rate.
• Leveraging Existing Infrastructure: You use established internal tools (ATS, onboarding systems, background check providers) and staff resources that are already paid for, optimizing their utilization.

3. Process Control and Quality

• Better Control Over the Process: Your team dictates the speed, communication style, and screening steps, allowing for quicker adjustments and direct feedback loops.
• Maintaining Data Security: All candidate and payroll data remains within the company's secure systems, ensuring compliance with internal data privacy policies from the start.
• Standardized Quality: Internal HR applies the company's established, rigorous hiring standards to temp workers, ensuring a consistent baseline for quality that might be waived or relaxed by an external agency focusing on speed.

4. Long-Term Talent Strategy

• Building Internal Knowledge: The HR team gains valuable insights into the market availability, compensation expectations, and necessary skill sets for temporary roles, enriching the company's overall talent strategy and reducing reliance on third parties.

While internal hiring has its strengths, the variable-cost model of an agency offers distinct operational and financial benefits for temporary staffing. Let's discuss this model now.

Advantages of Using a Staffing a Agency

Predictable, Variable Costs: Pay only for hours worked, instead of a fixed internal recruiter salary.

1. Reduced Administrative Burden: The agency handles payroll, onboarding, WSIB, insurance, and compliance.
2. Risk Mitigation: Replacement guarantees reduce the financial impact of a temp worker leaving or underperforming.
3. Scalability: Quickly scale your workforce during seasonal peaks or special projects.
4. Faster Time-to-Hire: Access pre-screened, qualified candidates in days rather than weeks.

By leveraging a staffing agency, businesses gain flexibility, cost-efficiency, and risk reduction, making it the smarter option for temporary staffing in the GTA.
 

Below you will find the graph and a report that will demonstrate at which point, at least mathematically, it starts to make sense to hire a full time internal recruiter.

This report is based on the industry average numbers: When does it make sense for a company to stop using an agency and hire an internal recruiter?

Report: The "Make vs. Buy" Analysis (Industry Standard)

Executive Summary

This analysis defines the "Tipping Point" for hiring an internal recruiter in the Ontario market. It compares the fixed cost of an internal recruitment function against the variable cost of using a standard staffing agency.

The Assumptions (2025 Market Data):

• Avg. Wage:

$19.50/hr (General Labour)

• Avg. Tenure:

10 Weeks (400 Hours)

• Internal Cost:

$100,000/yr (Salary, Burden, Tech Stack)

• Agency Premium (Net Variable Cost):

~$3.51/hr (This represents the agency's net fee, calculated as their standard 40% markup minus the estimated 22% payroll burden. We isolate this amount because the 22% payroll burden is a fixed government-mandated cost incurred equally in both the internal and agency models, allowing for a pure comparison against the $100,000 fixed internal cost.)

The Findings

1. The Break-Even Point: ~71 Hires The intersection of the fixed internal cost (dashed line) and the variable agency cost (grey line) occurs at 71 hires per year.

• Below 71 Hires

(The Agency Zone): For any company hiring fewer than 71 temp workers annually (approx. 6 per month), outsourcing to an agency is mathematically cheaper. The "premium" paid to the agency is lower than the fixed $100k overhead of an internal team.

• Above 71 Hires

(The Internal Zone): Once a company exceeds 71 hires, the cumulative agency fees surpass $100,000. At this volume, the company loses money by staying with a standard agency and should theoretically bring recruitment in-house. 

Strategic Conclusion for the Employer

Unless your organization consistently onboards more than 6 new temporary workers every month (70+ per year), you are financially better off outsourcing to an agency. The fixed costs of salary, software, and administration for an internal recruiter simply do not pay for themselves below this volume. Add to it the hidden costs of the increased employer liabilities dealing with more employees this math can be changed, but this is a topic for a different conversation. 

There could also be an argument for the teams that already have an HR personnel. “Since we already have an internal resource, it will take care of the temps for us.  That is correct, it is possible, but one should also remember that you most likely hired that internal HR to deal with other internal growth and development tasks. In such cases the employer needs to think how much time and resources will be moved away from that and allocated to dealing with temps.

Conclusion: Why staffing agencies like Alliance Employment Services is the Smart Choice

Hiring temporary workers through an agency like Alliance Employment Services is often cheaper, faster, and less risky than managing recruitment internally. As the "Make vs. Buy" analysis definitively proves, the financial tipping point for hiring a full-time, in-house recruiter is 71 temporary hires per year.

Unless your organization consistently onboards more than six new temporary workers every month, you are financially and operationally better off outsourcing to an agency. The fixed costs of salary, software, and administrative overhead for an internal recruiter simply do not pay for themselves below this volume.

By choosing Alliance Employment Services, businesses gain a transparent, variable-cost model that includes:

• Pre-screened and Qualified Candidates: Faster time-to-hire with proven quality.
• Reduced Risk: Guaranteed replacements and coverage for WSIB, insurance, and compliance.
• Predictable Costs: You pay only for hours worked, avoiding internal fixed overhead.
• Administrative Relief: The agency manages all payroll and HR administration.
• Scalability: The ability to quickly and flexibly scale your workforce during seasonal peaks or special projects.

For businesses in the GTA, understanding the true cost of temporary staffing ensures smarter hiring, reduced risk, and optimized operational efficiency.