Staffing agencies price temporary workers with a bill rate: the worker's pay rate plus a markup that covers payroll taxes, workers' compensation, insurance, benefits where required, recruiting costs and the agency's margin. Direct hire is usually priced as a one-time placement fee. The biggest cost drivers are the pay rate, the role's difficulty to fill, location and volume.
Key takeaways
- Bill rate = pay rate + markup for employer costs and agency services.
- Much of the markup covers mandatory employer costs, not profit.
- Direct hire is usually a one-time fee instead of an hourly markup.
- Ask for a written rate breakdown and conversion terms before you start.
What's inside a bill rate
When a staffing firm employs a temporary worker, it pays the wages and the employer costs that come with them.
- Employer payroll taxes (Social Security, Medicare, unemployment)
- Workers' compensation insurance
- General liability and other insurance
- Benefits required by law or the agency's policies
- Recruiting, screening, onboarding and payroll administration
- The agency's operating margin
Why the same role can cost more in one market
Pay rates differ by region, and workers' compensation rates differ by state and job type. A forklift operator in one metro area can command a very different pay rate than in another, which changes the bill rate.
Direct hire and executive search fees
For permanent placements, agencies typically charge a one-time fee tied to the hire's first-year compensation. Executive search may be structured as a retained engagement paid in stages.
Questions to ask any staffing partner
Get clear answers before you sign.
- What is included in the markup?
- How are overtime and holiday hours billed?
- What are the conversion terms for temp-to-hire?
- What happens if a worker or placement doesn't work out?
Need help with this right now?
Tell us what you're hiring for. Joe Coiro will reply personally with a plan, a rate range and a realistic timeline.
Frequently asked questions
Why is the bill rate higher than what the worker is paid?
The difference covers employer costs such as payroll taxes, workers' compensation and insurance, plus recruiting and payroll administration and the agency's margin.
Is it cheaper to hire directly?
Not always. Hiring yourself still carries employer costs, plus your team's time recruiting and the cost of turnover and unfilled shifts.
How can I get pricing from Helix?
Call Joe Coiro at (973) 885-2635 or request a quote online. Pricing depends on the role, location and volume.