Anyone know how much money a temp employment agency gets for the hours their

[raccoon]

employees work?

Inquiring minds want to know...

[CherokeeDem]

1. Temp agencies...

generally charge 35 to 40% markup above the pay rate their client is willing to pay the temp employee. However, those rates are subject to negotiation and in this economy, some agencies are charging much less for their services. Also, the rate will change depending on the geographic location.

[hockeynut57]

2. at least

double what they pay. west central ohio anyways

[MANative]

3. My business does consulting work with Temp firms...

The employee is generally paid about 60% of what the company is charged. The rest goes to taxes, worker's comp, etc. Their profit margin is about 20-24%, but I've seen it as high as 30 and as low as 12%, depending on volume contracts, the level of need for a particular skill (finance, medical, and tech workers are more in demand, thus "cost" more), and local employment markets.

[TheDebbieDee]

4. Thanks for that insight.............

I've worked temp assignments many times between permanent jobs and I always that whatever agency I worked for was paid at least twice what I was paid.

I was never able to hold out for what I thought the job was really worth because I really needed the money and I knew the agency would move onto the next candidate who might be willing to do the job for the same amount or less.

ETA: Although I'm really surprised to hear that temp agencies have to pay workers' comp.

[onethatcares]

5. they pay workmans comp but

they use the volume method and get a reduced premium. I'm not sure how much that is.

It's like in construction, if a LLC employees 5 guys straight hourly the rate might be 40% (roofers in floriduh are 60%, if a staffing agency handles the employees for 5 companies they get a reduction based upon the spread.

Does that make sense?

[Aerows]

7. A lot of them won't take roofers, either

because it is more dangerous and therefore WC is higher. If they do, they charge the employer a lot more, and screening potential temp workers is regarded as a valuable skill to check for those that have ever accepted any type of worker's compensation (i.e., if you've ever filed a claim, even if it was clearly legitimate, forget working at a temp agency).

[MANative]

11. And some firms will only do what's classified as...

"light industrial" specifically for that reason. Assembly line, basic maintenance, etc. Fisheries (the boats, not processing) are another area with really high WC rates. A firm that I worked with in FL did a lot of work with the mid-level stuff - welders, ship builders, electricians, etc - and their WC rates were pretty steep. They'd charge out at over $50/hour for entry-level spot welders.

[MANative]

9. For jobs that are in high demand by clients...

such as accounting, finance, computer technology, and nursing, the temp agency will often start with the pay rate required by the worker and add a "markup" to that in order to cover their costs (again, overhead, taxes, WC) and profit margins. It's not unusual for a typical payrate of $20/hour for the worker to be charged out at around $32-35/hour. The client typically understands and expects this, and is willing to pay because of the short-term nature of the arrangement. It would cost a lot more to bring on that person full-time. Often, though, particularly in the disciplines I listed above, it turns into a temp-to-perm assignment.

They have to pay WC because the workers are technically THEIR employees, "on loan" to another firm for their use. All payroll taxes, insurance, etc. have to be paid by the temp firm.

[Aerows]

6. I worked at a temporary agency

The employee gets paid easily 60% or less of what the temp agency gets paid. Discerning temporary agencies won't take on dangerous jobs like roofing, either, because the workman's comp is too high. Generally, the shittier, lower paying job they can contract employees for as long as it isn't dangerous, the more money the temp agency makes. They love office workers because they can gouge the hell out of the employer, but the job isn't risky so they don't have very high WC rates.

[Curmudgeoness]

8. I admit that the last time I worked temp was 20 years ago,

but I did work in accounting, and processed the bills to the employer from the temp agency. At that time, I was making $8 an hour and the temp agency was charging them about $24 an hour. It may be less now with the economy being down and fewer companies hiring temps, but I know that I was shocked by the markup.

[MANative]

10. It does tend to be less of a spread now because...

while client firms are willing to pay more for the "temp" need, they have pushed back heavily in the last few years, cutting into profit margins pretty significantly.

[Hamlette]

12. it is now a highly competitve business

in the old days, there were only a couple of temp companies in my area. Now there are lots. Employer pick and choose the ones with the lowest rates.

A temp company has very high unemployment rates too since they are laying off workers when the assignment ends and the get unemployment when off assignments.

[SmileyRose]

13. We are using a temp now for general office

We pay $20 an hour with 8 hr per day minimum. She makes $12.50 an hour an has better benefits than I do. To be honest, I've thought about moving to temp full time. With better benefits I'd come out ahead.

[trackfan]

14. It's about a 60/40 split

That is about 60 percent of the total billing going to the employee, and 40 percent to the agency. Quite a hefty cut for the agency, isn't it.

[MANative]

15. Yes and no...

With that 40%, they pay taxes, UI, WC, overhead, benefits, etc. They typically profit at about 20%, or half of the markup. In highly competitive markets, it's as low as 12%. You'd be surprised, too, how many temp firms actually do pay benefits for their workers, especially those who focus on high-demand skill groups, like finance, computer tech, and nursing.

[Lydia Leftcoast]

16. When I worked for temp agencies in the early 1980s

I was typically paid $5 an hour. I overheard one of the supervisors tell a supervisor from another department that they were paying the agency $9 for each temp.