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How Much Does a Staffing Agency Charge? Part 2: Billing Structures

If you’re thinking about partnering with a staffing firm such as PEAK, you might be wondering how much it will cost. While it is true that you’ll be charged for services, your costs may be different from what you expect. In this two-part series, we’re breaking down the costs and billing structures you will see. In Part One, we considered mandatory fees, such as Social Security taxes and unemployment compensation. Now we’ll look at the three main types of billing structures that staffing agencies use.

Bill Rate Only

Thankfully, this rather confusing pricing structure is becoming less common throughout the industry. In a bill rate-only scenario, you as the customer will only see the total you’re being charged. It’s difficult to see exactly where your money is going. However, it does it make easy to price shop between different agencies, since what you see is what you’ll pay.

Markup Over Pay Rate

This fairly straightforward bill structure adds a flat percentage markup to your designated pay rate. So if you want to pay an employee $20 per hour, and the staffing firm charges a 40% markup, your bill will be $28 per hour. It’s simple math, but there are some challenges. In particular, as we explained in Part One of this series, mandatory fees eat up most of the markup. Staffing agencies that use a markup over pay rate model must squeeze their services into what’s leftover. If mandatory fees rise, agencies have even less money available with which to provide services.

Markup Over Direct Costs

This innovative model offers the most flexibility. Direct costs include not only the employee pay rate but also all mandatory fees. You will then be charged a markup based on service fees for the actual services you need and want. You can see your fully itemized bill and know exactly where your money is going. If you want to change your services, your bill will change accordingly.

At PEAK, we are committed to tailoring our services to meet each customer’s needs. We believe in transparency, and we want you to know exactly where your money is going.

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