"Bill rate" is the rate a company pays to a staffing agency for the services of a temporary worker. In order to effectively manage Bill rates, it is important to understand the components that make it up.
Pay rate + Markup = Bill rate Pay rate or salary is the amount of the Bill rate being paid to the contingent worker or employee by the staffing agency. All too often, only the staffing agency knows this rate and is very reluctant to share it with the employer. Pay rate is often the largest component of the bill rate-- and can play a large role in employee retention.
Markup The second component of the Bill rate is the markup. This is generally the percentage of the Pay rate through which the staffing agency recovers its costs and profits. Depending on the types of workers utilized, level of competition, buyer's knowledge, volumes of business, etc., this markup percentage can vary significantly. Typical markups range from as low as 20% to 50% or more.
Staffing agencies use the same pricing for all clients: WRONG. Typically an agency will develop a Bill rate structure based on a client's anticipated volume and knowledge relative to the applicable Bill rates.
Staffing agencies pay the same amount to workers with similar skills: WRONG. Agencies are subject to supply and demand in the applicant market, which results in different pay rates for similar skill sets. It all depends on the current market rates.
RFP Pricing equates to what agencies are truly billing: WRONG. Final negotiated rates are often 3-7% lower than initial RFP pricing.
Statutory costs are constant across the United States: WRONG. Incumbent fees can vary as much as 10% based on location and skill set.