A nurse staffing agency places nurses with hospitals, nursing homes and other facilities for temporary work, from a single shift to a contract of several months. In most arrangements the agency, not the facility, is the employer: it pays the nurse, withholds taxes, carries the liability insurance, and bills the facility an hourly rate that covers all of that plus its own margin.
The agency's product is speed and coverage. A facility that cannot fill a shift from its own staff can fill it through an agency the same week, at a price. Every part of the argument about agency staffing follows from that trade.
How many agencies there are
The industry is often discussed as though it were a handful of large firms. It is not. Two companies do dominate the top of it and the vendor management layer beneath it, but the tail is long: 739 separate agencies and employers have advertised travel assignments on NurseRecruiter since 2009, 1,026 have advertised per diem shifts, and over 4,000 have advertised permanent posts.
The concentration is local rather than national. Across the full archive, a median of 146 different agencies have posted travel assignments in each state, and the largest single agency accounts for a median of 32 percent of a state's postings, ranging from 20 to 58 percent. A nurse who deals with one agency in a state is seeing a fraction of what is advertised there. See agencies and recruiters.
The money
The facility pays a bill rate per hour. Out of it come the nurse's wage, any stipends, the agency's insurance and payroll costs, the recruiter's commission and the agency's profit. What the nurse receives is a fraction of the bill rate, and the gap is not evidence of wrongdoing on its own.
Bill rates for travel contracts averaged $91.23 an hour on the 2026 staffing survey figures, down from a peak of $154 in 2022. On an annualised basis a hospital pays roughly $189,758 for an average travel nurse against $123,676 for an employed registered nurse including benefits. See travel nursing for how the rate is built and what it means for a nurse judging an offer.
Per diem placement works the same way at shift scale, and some facilities keep their own per diem roster instead, which removes the agency margin but requires the facility to do the recruiting. See per diem nursing.
The agency workforce has grown accordingly: registered nurses employed by staffing firms rather than facilities went from 57,270 in 2019 to 130,890 in 2023.
Contract terms that matter to the nurse
Three clauses do most of the damage when they are missed.
Cancellation terms. An assignment can end early when a facility's needs change. What the agency owes in that case, if anything, is a matter of the contract.
Guaranteed hours. A package quoted as weekly income assumes a number of hours. Whether those hours are guaranteed if the unit is quiet is a separate question, and often answered no.
Conversion or placement fees. Historically some contracts charged a facility a fee if it hired the agency's nurse permanently, and some restricted where the nurse could work afterwards. Both are now prohibited in some states, discussed below.
Contract length is close to standardised: of travel postings that state a length, 82 percent say exactly thirteen weeks. Anything much shorter usually signals a crisis requirement, and anything much longer is a permanent gap being covered temporarily. See travel nursing contracts.
Contract terms that matter to the facility
Rate escalation during a crisis, the definition of a cancelled shift, indemnity, and who is responsible for verifying the licence and competency of the nurse who arrives. On the last point, verification is cheap and independent: participating boards feed licensure and disciplinary data to the national verification service, which shows whether a licence is current and whether it is multistate. See Nurse Licensure Compact.
Firms can also hold Health Care Staffing Services certification from the Joint Commission, which reviews on site how a firm verifies credentials and assesses clinical competency, and requires certified firms to report standardised performance measures for their per diem and travel staff.
How states began regulating them
Agency staffing was politically invisible until the pandemic sent rates to their peak, at which point states began legislating. The pattern is oversight rather than prohibition: registration, reporting, and limits on contract terms.
Connecticut required temporary nursing services agencies to register and pay an annual fee, effective January 2023.
New York went further from August 2023. Any business supplying temporary health care personnel to health care entities, including nursing registries and online platforms, must register with the state health department and pay a $1,000 annual fee. Agencies must file their contracts with health care entities within five business days of signing, and report quarterly on hourly bill rates by category of personnel along with administrative charges. The law also bars an agency from restricting where its workers may otherwise work, and from imposing charges or damages on a worker or a facility if the worker is offered a permanent job.
Several other states have enacted registration or licensing schemes with reporting duties, and a few publish maximum rates that an agency may charge for particular categories of health care worker. Massachusetts caps what temporary nursing agencies may charge long-term care facilities, by region and shift. The rules are state by state and change frequently, so an agency or facility operating across state lines is dealing with several regimes at once.
The reporting requirements are the quietly significant part. Once bill rates are filed with a state agency by category, the market has a public price for the first time, which changes the negotiation for every facility in that state.
Where agency use is heaviest
Reliance varies by state far more than the national averages suggest. In nursing homes, where contract hours are reported to Medicare, contract staff were 25.1 percent of nurse hours in Vermont in mid-2025 against 1.0 percent in Alabama, on a national figure of about 7.5 percent.
Travel assignments advertised per employed nurse follow a similar geography, heaviest in Idaho, Alaska, New Mexico, Maine and Vermont and lightest in Mississippi, Utah and Minnesota. Thin local supply rather than state size is what drives it. See where the assignments are.
Why hospitals keep using them anyway
Around seven in ten hospitals say they intend to reduce agency use, and have said so for several years while agency staffing remained the most common answer to a short-staffed unit. The reason is that reducing agency spend is a hiring capability rather than a decision: an employer stops paying agency rates only when it can reliably recruit and keep permanent staff. See nurse turnover and retention.
Related
- Travel nursing
- Where the assignments are
- Per diem nursing
- Nurse turnover and retention
- Internationally educated nurses
- Nurse Licensure Compact
Sources
- Temporary health care staffing agencies now required to register in New York. Garfunkel Wild, on the registration, reporting and fee provisions effective August 2023. Accessed September 9, 2026.
- Recent federal and state legislative action targeting health care staffing agencies. Mintz, on the wave of state oversight laws including Connecticut's registration requirement. Accessed September 9, 2026.
- 101 CMR 345.00: Rates for temporary nursing services. Commonwealth of Massachusetts. Accessed September 9, 2026.
- National Health Care Retention and RN Staffing Report. NSI Nursing Solutions, 2025 and 2026 editions, for bill rates and annual cost comparisons. Accessed September 9, 2026.
- The use of contract staff in nursing homes. Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, January 2025, for agency employment of nurses. Accessed September 9, 2026.
- Nursing home staffing data. Long Term Care Community Coalition, for contract staffing by state. Accessed September 9, 2026.
- Health Care Staffing Services certification. The Joint Commission. Accessed September 9, 2026.
- Nursys licence verification. National Council of State Boards of Nursing. Accessed September 9, 2026.
- NurseRecruiter job listings, 2009 to September 2026, for the number of agencies advertising and the concentration of postings by state. Method and limits are set out in where the assignments are.