Rate Markups

Tuesday, February 27, 2007

When hiring from an agency, there is a pay rate that the worker is getting and a bill rate which the agency charges and the difference is the markup. The People Ticker can give you an idea of what kind of markups to expect. The markups displayed as part of The People Ticker's search results represent an average of the markup data points that we have collected in The People Ticker database. Since we are collecting markup information from a number of sources including hundreds of agencies and thousands of individuals, the range of markups captured vary widely. Some of the most common factors that contribute to the variation in the reported markups are:

• Expertise of buying organization
• Corporate contracts
• Competitive solicitations
• Type of skill set, i.e. programmer vs. receptionist vs. warehouse worker
• Volume of business
• Relationship of contingent worker with agency, i.e. W2 employee, independent contractor,
etc.
• Benefits paid by agency for contingent worker (Paid holidays & vacation, medical coverage,
life insurance, 401K, training, etc.)
• Length of assignment
• Other overhead and general & administrative expenses
• Profit

For a company working with contingent workers, understanding the markup can offer insight needed for making hiring decisions. Is it worth the extra expense for more expertise? Is it worth hiring more workers in order to get a lower rate per worker? If you are unhappy with a current agency, is it worth finding a new one that you may not have a relationship with? When you understand all the elements of the markup, it can make it easier to evaluate and negotiate.