Should You Use a Locums Company Recruiter or Contract Directly with Facilities for Opportunities?
- Nisha Mehta, MD
- 2 days ago
- 8 min read
Physicians interested in locums work either as a side gig or for their primary clinical work have two main options for finding opportunities – contracting directly with a hospital system or working with a locums company or recruiter. There are advantages and disadvantages to both options. Which route is ultimately the best fit can depend on a physician’s goals, priorities, and how much support they desire. Below, we cover the pros and cons of working with a locums company and what to consider when deciding if you should work with a locums company or recruiter. We also include free resources to help find opportunities.
Disclosure/Disclaimer: Our content is for generalized educational purposes. While we try to ensure it is accurate and updated, we cannot guarantee it. We are not formal financial, legal, or tax professionals and do not provide individualized advice specific to your situation. You should consult these as appropriate and/or do your own due diligence before making decisions based on this page. To learn more, visit our disclaimers and disclosures.
Article Navigation
The role of a locums company or recruiter
A locums company acts as a middleman between the physician and the hospital system or other institution. Their primary role is to handle the business, administrative, and logistical aspects related to filling locum tenens placements.
They will have their own contract in place with the facility that outlines how they work to help fill the facility’s staffing needs. The locums company or recruiter is paid by the institution according to the terms agreed upon between the company and the facility. Physicians are then paid through the locums company out of the pool of money made by the locums company from the hospital or facility.Â
The money that the locums company makes is the difference between what they make from the hospital and what is paid to the physician, minus their own costs associated with arranging the match and whatever costs are covered for the physician, which may include travel related expenses and malpractice.
Benefits of using a locums company or recruiter
Access to opportunities may be unavailable directly. Some hospital systems have exclusive contracts with a locums company and funnel all their opportunities through that arrangement. While they may have several opportunities available, their in-house recruiting team may not be able or willing to consider physicians who are interested outside of a placement through the locums company. The only way to get these opportunities then is to go through the locums agency they contract with.
More streamlined and efficient matching for opportunities. While it’s possible to find locums opportunities directly, there are several outreach outlets physicians may need to try in order to find relevant opportunities when searching themselves. A recruiter can quickly connect you with open assignments they are looking to fill that fit your schedule and expertise.
Credentialing and licensing support for onboarding. Many locums companies help physicians manage paperwork for the onboarding process, providing assistance for state licensure (if necessary) and hospital privileges.
Assistance with logistics coordination. Locums companies often help with travel logistics for your locums contract, such as flights and hotels. This can include making all the arrangements and paying for accommodations.
Malpractice insurance coverage may be provided. Many locums companies provide malpractice coverage for physicians working under their contracts. Most locums malpractice insurance policies provide $1 million per claim and $3 million aggregate total coverage limits for a one-year policy term. (Make sure this is clearly outlined in your contract.)
Disadvantages of working with a locums company
Can offer lower pay because of the middleman cut. A locums company or recruiter works for and is paid by the hospital system. The more they pay you, the less money they make after their expenses. This can skew a recruiter’s incentive in helping you negotiate the best possible rate. Thus working through an agency will likely mean you receive a lower rate than what you could get directly, especially if you don’t negotiate with the locums company. Explore how much money a locums company makes from a physician working through their agency and how to negotiate your locum tenens contract.
Less control over assignments. When working with a locums company, their end objective is to have as much coverage as possible for their client, the hospital system. They can be incentivized to fill open shifts as quickly as possible to meet the hospital’s demand, which may cause them to overlook your preferences and goals in favor of a quick placement. This can also provide less flexibility with scheduling. An institution who works with you directly and sees the day-to-day value of having you on their team may be more willing to work with you for coverage for desired time off versus working strictly under the negotiated terms and schedule on your locums contract.
Experience can vary from recruiter to recruiter. We’ve seen in our locums compensation and negotiation database that the individual recruiter within the agency can play a large role in the overall experience. A great recruiter can be an invaluable resource to ensuring a smooth process from start to finish. A recruiter who isn’t a great fit can cause frustrations and add additional work and stress physicians are often looking to avoid when opting to work with a locums company. Explore our article on establishing a successful relationship with a locums recruiter.
Potential restrictive covenants and non-competes. Some locums companies may include in their standard agreement exclusivity or limitations that can prevent you from working with other companies or other institutions. This limits the amount of outside work you can do. You may be able to negotiate these terms when finalizing your locums contract, but it’s something to pay attention to and discuss, as it may be a deal breaker depending on your goals.
Other terms often heavily favor the locums companies. Contracts with locums agencies can come with a lot of fine print boilerplate provisions physicians may be tempted to skim over that can have huge potential ramifications depending on the situation. One example we’ve covered specifically is the indemnification clause, which can require you to hold the company harmless, forcing you to assume all the liability in the arrangement. Termination clauses can also heavily favor the locums company or hospital system you’re working for. These terms may be negotiable, but the company is not required to offer any concessions versus their standard contract terms if they don’t wish to, which can leave you exposed.
Should I use a locums company recruiter or contract directly for locums gigs?
As we’ve highlighted above, working with a locums company has both benefits and drawbacks. Whether you should work with a locums company or opt to contract directly comes down to your preferences and goals.
Working with a locums company can offer more support and can be a great option if:
You’re new to locums work and want the additional support an agency can provide
You want to focus on the clinical work and don’t want to worry as much about the planning and logistics for each contract
You want to expand your options geographically past your current connections in your local community or network
You want access to a steady stream of available opportunities to grow your side gig or career reliably
Taking a more DIY approach and contracting directly with hospital systems can be a better option if:
You don’t mind doing more upfront and administrative work for a higher pay potential
You want to build more long-term relationships with specific hospital systems or institutions
You want to be more selective about the types of locums opportunities you take on to make sure they fit your specific preferences
Regardless of which option you choose, we highly recommend negotiating your contract before starting a locums opportunity. We’ve covered common terms physicians negotiate in a locums contract and red flags to look out for separately. A contract attorney can help review your contract to point out any potential red flags you overlooked in the fine print, or any terms that have been discussed but aren’t included in your contract (get everything in writing!).
Use our free resources to find locums opportunities
If you’re looking for locums opportunities, we have a free locums opportunities matching database you may also want to consider using. It’s a free resource we offer to all members of our online physician community. We reach out to physicians who match opportunities based on their expressed interests, and you would negotiate the rates for these opportunities and manage logistics yourself.
You can also explore available locums opportunities listed on our job board for physicians.
We publish current and upcoming opportunities weekly in our PSG newsletter.
Considerations when contracting directly with a hospital or other institution for locums opportunities
We’ve covered this in depth in our separate article on how to directly contract with a hospital to bypass the locums company or recruiter. Highlighting a few key considerations to keep in mind:
Make sure you have licensing covered if you plan to work in a different state.
Have all your information and documents ready and organized, as you’ll handle all the paperwork for credentialing and privileging yourself.
Some hospitals may cover lodging or transportation, but most do not. You’ll need to make these arrangements and budget for these expenses accordingly.
You will likely be a 1099 independent contractor and may wish to establish an LLC for your locums work. If you’re hired as a contactor, be prepared to file quarterly estimated taxes.
Know your asks and non-negotiables and be prepared to negotiate for them.
Have a plan for malpractice insurance coverage ready, as many institutions will expect you to carry your own coverage when contracting directly.
Can I both work with a recruiter and contract directly with facilities?
Depending on the exclusivity terms you’re able to negotiate with a locums company, you may be able to take a hybrid approach and work with a locums company in certain areas while contracting directly with hospitals through connections you have already established through your network.
Implementing a dual approach can help maximize your opportunities. Just make sure you treat gigs received through each approach separately. Malpractice insurance coverage through a locums company, for example, likely won’t cover arrangements you make independently, so you would still need to have a malpractice policy in place to cover your locums work outside of their arrangement.
Learn more about medical malpractice insurance and tail coverage for physicians (includes a resource for shopping policies for those who need it).
Conclusion
A locums company or other staffing agency can offer additional support for finding and coordinating locums contracts, but these services come at a cost. Physicians interested in growing their locums side gig or career should balance the benefits of each option depending on their comfort level handling the logistics and other various administrative tasks required to arrange contracts with how much control they want over assignments and rates.
Additional locum tenens resources for physicians
Explore related PSG resources:
Don’t forget to sign up for our locum tenens opportunities matching database (physician only) and our PSG weekly newsletter for alerts on current and upcoming opportunities.