A nursing agency is a third-party staffing firm that places temporary nurses in hospitals, clinics, and other healthcare facilities to fill gaps in their workforce. These agencies recruit, credential, and deploy nurses on short-term assignments, acting as an intermediary between nurses looking for flexible work and facilities that need staff. The U.S. healthcare staffing industry reached $39.4 billion in 2025, up 63% from 2019, reflecting how central these agencies have become to the way hospitals operate.
How Nursing Agencies Work
A nursing agency maintains a pool of licensed nurses ready to be placed on assignments. When a hospital or clinic has open shifts it can’t fill with its own employees, it contacts the agency and requests nurses with specific qualifications. The agency matches available nurses to those openings, handles payroll and employment logistics, and bills the facility a rate that covers the nurse’s pay plus a markup for overhead and profit. That markup can reach 50% or more above what the nurse actually earns per hour.
Nurses who work through agencies are employees of the agency, not of the facility where they work. This means the agency is responsible for verifying licenses, running background checks, confirming clinical competencies, and managing tax withholding. The facility directs the nurse’s day-to-day patient care, but the employment relationship stays with the agency.
Types of Agency Assignments
Agency nursing generally falls into two categories: per diem and travel. Per diem nurses pick up individual shifts at local facilities, sometimes with as little as a few hours’ notice. This works well for nurses who want control over their schedule and prefer to stay close to home. Travel nurses, on the other hand, take contracts lasting 8 to 13 weeks at facilities that may be across the state or across the country. Travel assignments typically include housing stipends or company-arranged housing on top of the hourly wage.
Some agencies specialize in particular clinical areas. You’ll find agencies focused exclusively on intensive care nurses, operating room staff, or long-term care. Others are generalists that place everyone from certified nursing assistants to nurse practitioners.
Why Hospitals Use Agency Nurses
Hospitals turn to agencies when their permanent staff can’t cover patient needs. Several factors drive this: high turnover rates, a limited labor pool, non-competitive pay relative to neighboring facilities, and inadequate workplace support that pushes nurses to leave. Agency staff also serve as a buffer against sudden shortages caused by absenteeism or an unexpected surge in patient volume, like flu season or a mass casualty event.
For hospital administrators, agency labor functions as a flexible resource. Rather than hiring permanent employees who draw salary and benefits year-round, a facility can scale its workforce up during busy periods and back down when census drops. The tradeoff is cost. Agency nurses are significantly more expensive than permanent staff, typically adding 50% or more to the hourly rate a hospital would pay its own employees.
Pay Differences for Agency Nurses
Agency nurses consistently earn more per week than their permanently employed counterparts, though the gap fluctuates with market demand. In 2019, before the pandemic reshaped the labor market, travel nurses averaged about $1,704 per week compared to $1,213 for staff nurses. By 2022, travel nurse pay had climbed to roughly $2,827 per week while staff nurse pay reached $1,391. At the peak in January 2022, travel nurses earned 148% more than staff nurses nationally.
That premium has cooled somewhat. In early 2023, travel nurses averaged about $2,657 per week versus $1,341 for staff nurses. The gap remains substantial, but it’s narrower than the pandemic highs. Higher pay comes with tradeoffs: agency nurses may not receive employer-sponsored health insurance, retirement contributions, or paid time off through the facility. Some agencies offer their own benefits packages, but coverage varies widely from one firm to the next.
Quality and Certification Standards
Not all nursing agencies operate at the same level of rigor. The Joint Commission, the organization that accredits most U.S. hospitals, offers a voluntary certification program specifically for healthcare staffing firms. To qualify, an agency must place temporary clinical staff in patient care settings, have at least 10 active placements, and collect four months of standardized performance data before an on-site review. Certified firms submit quarterly performance data and undergo periodic evaluations to maintain their status.
This certification covers agencies that place not just nurses but also physicians, pharmacy personnel, radiology technicians, respiratory therapists, and other clinical staff. For nurses choosing an agency, Joint Commission certification is one signal that the firm meets recognized industry standards. For hospitals, it provides some assurance that the agency’s credentialing and quality processes have been independently reviewed.
Drawbacks of Agency Staffing
Agency nurses arrive at a facility without knowing its specific protocols, electronic health record system, or unit culture. That unfamiliarity with institutional procedures creates operational friction and can affect care quality. Research published in Risk Management and Healthcare Policy found that the temporary nature of agency work results in a lack of crucial institutional knowledge, and that agency staff may be less participatory in teamwork, contributing to burnout and decreased morale among permanent employees who have to pick up the slack.
Continuity of care is another concern. When different agency nurses rotate through a unit, the thread of knowledge about individual patients can fray. Frequent turnover among agency staff complicates performance monitoring and accountability, making it harder for managers to track whether care standards are being met consistently. In some cases, agency nurses may not have full context on a patient’s history, leading to gaps in understanding their specific needs.
These challenges don’t mean agency nurses provide poor care as individuals. Most are experienced clinicians who chose agency work for its flexibility and pay. The issues are structural: placing any skilled professional in an unfamiliar environment on short notice creates inherent friction, regardless of their competence.
What to Know if You’re Considering Agency Work
If you’re a nurse evaluating whether to work through an agency, the main advantages are higher pay, schedule flexibility, and the ability to experience different clinical settings. Travel nursing adds geographic variety and housing support. Per diem work lets you accept or decline shifts based on your availability, which appeals to nurses balancing school, family, or other commitments.
The downsides mirror the institutional challenges. You’ll repeatedly be the new person on a unit, learning systems and workflows from scratch. You won’t have the same collegial relationships as permanent staff, and some facilities treat agency nurses as outsiders. Benefits vary by agency, so compare health insurance options, retirement plans, and any cancellation policies before signing a contract. Some contracts allow the facility to cancel your assignment with little notice if patient volume drops, which can leave you scrambling for income.
Look for agencies with transparent pay breakdowns that show your hourly rate separately from housing stipends or other reimbursements. Ask whether the agency holds Joint Commission certification and how they handle malpractice insurance. Reputable agencies carry their own liability coverage for the nurses they place, but confirming this upfront protects you.