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How Much Does a Staffing Agency Charge? Part 1: Mandatory Fees

If you’re considering working with a staffing agency such as PEAK, your first thought might be, “How much will this cost?” It is true that employers pay for staffing services, but exactly how much you pay may be different from what you expect. In this two-part series, we’ll break down the costs and pricing models you can expect. In Part One, let’s look at mandatory fees.

Mandatory Fees Explained

At first glance, you might think that a staffing agency is making big bucks off its clients. But that’s because you might not realize that most of what you are paying are mandatory regulatory fees. These include things such as workers compensation, Social Security and Medicare taxes, and unemployment insurance. In other words, these are the same fees that you would have to pay on top of salary if you hired workers without the help of a staffing agency.

Mandatory fees make up the lion’s share of staffing agency charges. In fact, at most staffing firms, mandatory fees constitute a stunning 65% to 85% of the costs you pay over and above the employee’s hourly rate. That leaves just 15% to 35% of the charges to cover the staffing agency’s expenses and profits.

But where does that 15% to 35% go? Naturally, all businesses including staffing agencies need to make a profit. However, the majority of what’s left after covering mandatory fees goes to covering our overhead, from office rent to electricity, to paying our staff, and to providing top quality services, including recruiting and vetting qualified engineering candidates, for our customers.

Different staffing agencies use different billing models. All tend to result in similar pricing structures, but there are some differences, which we will discuss in Part Two of the this series. At PEAK, we are committed to providing each client with a transparent breakdown of our rates and included services, and to tailoring our packages to meet clients’ individual needs.

Build A Forward-Thinking Engineering Team With PEAK

If you are looking for talented engineering professionals who can help your organization achieve its goals, contact the experts at PEAK Technical Staffing today to learn how we can help you access cutting-edge talent.

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