If you’re thinking of starting your own staffing agency, there are many things to consider. One of the biggest factors of the overall process is how to set prices for your services. A successful agency starts with competitive rates. But, it’s also important to set prices that will allow you to make money and grow your business.
Below, you will find several tips that can help you set pricing for your staffing services. We hope they help you with your new business venture. Save money by using our free staffing agency software! Recruiteze makes placing qualified talent easy. Click here for a free trial.
Pricing Your Services
Competition is important in any type of business. Take time in the beginning to research other companies within your area. The more competition, the lower your prices will need to be. If there isn’t very much competition in the area, you might be able to get away with a good markup.
Relationships with your clients are also important. It’s a good idea to establish relationships with companies looking for candidates early on. Repeat clients will be a great way to ensure lower pricing. You can even work out billing rates that reflect how often they use your agency. For example, high-volume clients should only get a 10% markup rather than the 15% you would normally charge.
Temp-to-perm placement is something else to consider. According to entreprenuer.com, “Some staffing services don’t charge at all for this kind of placement, especially if they’ve had several months in which to make a profit from a temporary employee’s labor before the client hires that employee permanently. But some staffing services do charge a fee for temp-to-perm placements. This is reasonable because when a client hires one of your employees, you then cease to make any profit from that worker, in whom you may have invested a considerable amount of time and money to recruit and train.”
Also, familiarize yourself with taxes. All W-2 employees will need to have federal and state taxes, worker’s compensation as well as benefits added into the bill and pay rates. These things vary by state and job sector.
The location of your business will also be a factor in your markup. This will vary from state to state and city to city. For example, Raleigh North Carolina will have higher markups than a smaller town within the state.
Entreprenuer.com also talks about permanent placement, stating that, “If you place employees permanently without employing them as temporary workers first, then the fee you charge the client company will be much higher than it is for temp-to-perm placement. This, too, is logical, because you’ll have no other opportunity to make a profit on the labor of a person you’ve recruited, tested and possibly trained.”
We hope this information helps you set your pay rate in a way that not only works with the competition, but also makes your agency profitable and successful. Growing your business will take time. However, with these tips, you should be able to find repeat clientele and be a part of the competition.
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When your staffing agency or HR department needs help with online recruitment, make the right choice by using our free recruiting and online resume formatting system! Recruiteze is a powerful applicant tracking system for small business recruiting and hiring. It allows your job candidates to apply to open positions and be added to your talent database immediately. As an end-user, you’ll be able to go online anytime and access your candidates’ resumes as well as make any necessary changes. We make recruiting easy because Recruiteze also comes with a custom job board. It allows candidates and customers easy access to information and creates a level of professionalism expected in today’s marketplace.
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We’ve taken the redundant administrative work out of recruiting. Don’t hesitate to use our free staffing agency software to help reduce the time consuming process of hiring new employees and filtering through resumes and applications. If you have any questions or are interested in our enterprise package that offers unlimited access to all our services contact us today!