Long gone are the days where staffing agencies specialized in a niche angle within the staffing ecosystem. In today’s evolving market, staffing agencies strive to provide more robust, integrated staffing solutions to be seen as the one-stop, cost-effective shop. With this change, has also come a change in how these services are priced out. Thus, leaving service costs inflated from overestimating what services can truly be provided.
Tweet This: Ask these 7 questions when negotiating your staffing agency's bill rate:
Typically, the staffing agency’s bill rate consists of:
Pay Rate (what the worker gets. Also called “wage rate”)
Markup (the element consisting of taxes and supplier fees)
While direct costs most likely can’t be negotiated, we do know that markup costs can. The markup generally consists of the overhead service costs, taxes, benefits, and works as a catch-all to account for the random tasks or work that might fall into the agreements. When employers dive into what they’re really paying for with these service costs, they may find it’s a lot of smoke and mirrors they don’t actually need. Take a look at our top tips for negotiating your next bill rate:
Question #1 - How available is my candidate in the local market?
Depending on the position’s job family, skill, experience level and location, you may be in a position to negotiate the sourcing costs if there’s a higher supply of your ideal candidate.
Negotiation Tip: Do your research to understand your local job market. Skills Village provides members with insight into labor related costs and current market conditions from local experts.
Question #2 - Are my reqs aligned with the wages I’m offering?
Every employer wants to get the most bang for their buck with talent, but if you’re requiring candidates to have more skills and not actually paying the wages, you’re exhausting recruiting costs. The resources staffing agencies use to find higher-skilled candidates might be wasted if you’re just being too selective.
Negotiation Tip: Outline the requirements for the position along with the wage range and reallocate budget for each. If your standards are too high and not aligned with the actual salary you’ll be offering, you’ll lose money on the placement.