How Much Does a Temp Agency Charge Per Hour?

• Temp agencies typically charge a markup of 25-50% on top of the employee's hourly wage. 

• The markup can vary depending on the type of job, location, and industry. 

• Some temp agencies may charge additional fees, such as a placement fee or a service fee. 

• Understanding the costs and fees associated with using a temp agency is crucial for businesses to make informed decisions. 

Temp agencies use various pricing models to calculate their fees, which can be confusing for employers. In this section, we'll explain the most common pricing models used by temp agencies and provide examples of how they work. 

Temp agencies typically use one of the following pricing models: 

• Bill Rate: This is the hourly rate that the temp agency charges the employer for the temporary employee's work. The bill rate includes the employee's hourly wage, payroll taxes, benefits, and the agency's markup. 

• Markup: This is the percentage of the employee's hourly wage that the temp agency adds to the bill rate. The markup can range from 25% to 50% or more, depending on the agency and the type of job. 

• Placement Fee: Some temp agencies charge a placement fee, which is a one-time fee paid by the employer when a temporary employee is hired permanently. 

For example, let's say a temp agency places a temporary administrative assistant with an hourly wage of $15. The agency's markup is 30%, so the bill rate would be: 

$15 (hourly wage) x 1.30 (markup) = $19.50 per hour 

In this example, the employer would pay the temp agency $19.50 per hour for the temporary employee's work, which includes the employee's hourly wage, payroll taxes, benefits, and the agency's markup. 

The cost of using a temp agency can vary depending on several factors, including: 

• Type of job: Different types of jobs require different levels of expertise and experience, which can affect the cost. For example, technical or specialized jobs may require a higher markup than administrative or general labor jobs. 

• Location: Temp agencies in urban areas may charge higher markups than those in rural areas due to the higher cost of living and doing business. 

• Industry: Certain industries, such as healthcare or finance, may require specialized skills and training, which can increase the cost of using a temp agency. 

• Employee qualifications and experience: Temp agencies may charge higher markups for employees with specialized skills or experience, such as IT professionals or engineers. 

Despite the costs, using a temp agency can have several benefits for employers, including: 

• Flexibility and scalability: Temp agencies can provide temporary staff on short notice, allowing employers to quickly respond to changes in demand or workload. 

• Access to a pool of qualified candidates: Temp agencies have a pool of pre-screened and qualified candidates, which can save employers time and effort in the hiring process. 

• Reduced administrative burden: Temp agencies handle payroll, benefits, and other administrative tasks, freeing up employers to focus on their core business. 

• Improved workforce management: Temp agencies can help employers manage their workforce more effectively, including providing temporary staff to fill gaps in the workforce or to support special projects. 

With so many temp agencies to choose from, it can be overwhelming to find one that fits your budget and needs. Here are a few tips to help you get started: 

• Research and compare: Research different temp agencies and compare their rates, services, and reputation. 

• Ask about fees: Ask about any additional fees, such as placement fees or service fees, and make sure you understand how they are calculated. 

• Check references: Check references from other clients to get a sense of the agency's quality of service and reliability. 

• Use a directory: Use a directory like Temp Service Finder to search for temp agencies in your area and compare their services and rates.