When it comes to staffing solutions, businesses can often find themselves bogged down in complex pricing structures. This article aims to raise awareness about the advantages of working with a small and agile staffing vendor like Summa, where we can offer a 25% mark-up due to our low overhead and zero non-production cost model.

Understanding Key Terms:
To better understand pricing for staffing services, let’s revisit some key terms:

Bill Rate: The hourly charge that businesses pay for temporary employees’ services.
Pay Rate: The hourly amount that temporary employees are paid.
Costs of Employment: The total hourly cost, including fixed costs associated with employing someone – both mandatory (regulatory) and optional expenses.

The Burden Rate Dilemma:
Staffing firms calculate the burden rate, which includes both regulatory and discretionary costs. The burden rate varies depending on location, company size, and the specific job.

Regulatory Costs: These include FICA taxes, unemployment insurance taxes (FUTA and SUTA), workers’ compensation insurance, healthcare costs, and other taxes.

Discretionary Costs: These extra fees include background checks, 401k contributions, and other perks.

The True Cost Picture:
By considering both regulatory and discretionary costs, the total burden rate provides a comprehensive view of the employee’s actual cost. At Summa, we are committed to being transparent with our clients about the real cost.

Revelations on Bill Rates:
Understanding the impact of the bill rate requires a closer look at pricing structures. Summa’s transparent approach aims for a 25% mark-up, in stark contrast to large staffing firms that may charge a 50% mark-up. Our low overhead and zero non-production costs make our service fair and cost-effective.

Understanding the Standard Billing Rate to Salary Ratio:
The burden rate and service fee contribute to the total markup above the employee’s direct pay rate. Summa’s model is well below the recommended 1.65:1 ratio, ensuring a better balance between a reasonable service fee and client cost expectations.

If your business is caught up in the web of large staffing firms with hefty mark-ups, there is a solution – shift towards cost-effective and transparent partnerships. Summa’s 25% mark-up, achievable through our low overhead and zero non-production cost model, stands as a beacon of fair pricing in the staffing industry. It’s time to break free from hidden costs and embrace a staffing solution that prioritizes your business’s financial health.

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