Pay Rate

Your pay rate must be competitive enough to attract and retain qualified workers. Setting it too low can create:

• Longer time-to-fill
• Higher candidate drop-off
• Increased turnover
• Attendance issues
• More recruiter time per placement
• Missed service expectations

A lower pay rate may look better in an initial pricing model, but it may increase the actual cost of filling and maintaining the assignment.

Burden Rate or Statutory Expenses

Taxes, insurance, and other charges required by law. For staffing firms, it includes:

• FICA
• FUTA
• SUTA/SUI
• Workers’ compensation
• Benefits

Markup

A percentage charged by the staffing firm on top of the pay rate. Markups can include various factors; statutory expenses, overhead and operating costs, and profit. Operating expenses can cover rent, equipment, recruiting fees, commissions, and more.

Gross Margin

Gross margin supports the operations and continued growth of your firm. There is no single correct margin for every staffing company or account. Your target should reflect:

• Staffing vertical
• Assignment risk
• Recruiting difficulty
• Client volume
• Service requirements
• Payment terms
• Geography
• Competitive conditions
• Your firm’s operating model
• Your growth goals