Recruiters for contract staffing firms, or those who work independently, find a lot of satisfaction. As problem-solvers, they help businesses and companies realize staffing needs and solutions for temporary workers. However, there is a lot of uncertainty about whether or not recruiters should share financial information, particularly their bill rate and pay rate.
Bill rates and pay rates essentially translate into the recruiter’s profit. Your bill rate minus the company’s pay rate equals your profit as a recruiter. In many ways, it’s essential to keep that information private and to discuss only the rate that applies to the individual party. However, some clients require specific markup percentages. So how do contract staffing firms and recruiters navigate this sensitive topic?
Keeping Your Bill Rate & Pay Rate Confidential
When it comes to business financials, depending on the situation, some information should stay confidential. As a recruiter or staffing firm, clients or workers knowing your profit could cause some issues. For others, it doesn’t matter. For you there’s no obligation to explain that you earn a profit for your work. Instead, keep your business producing high-quality experiences so that companies and contract staffing candidates seek you out.
Another reason to keep your bill rate and pay rate confidential is to give you more negotiating power. If you disclose rates immediately, temporary workers and clients will hold you to it, or try to settle down. You always want to arrange the best price for you and your business, and keeping finances private can help.
When to Be Transparent
With that said, there are times when transparency is vital. Transparency is a popular word in the business world, and for a good reason. Aside from making you and your company more trustworthy, it also fosters employee satisfaction, organic growth, and better relationships with clients. Just because offering information about your bill and pay rates can feel untimely doesn’t mean it can’t work to your advantage.
For example, some clients will mandate a specific markup percentage that you must follow to do business with them. In that case, you’ll have to divulge your bill rate and pay rate. As a result, many recruiters and contract staffing firms ponder whether they should simply match the required markup or disclose actual rates. In the name of transparency, it’s advantageous to be honest.
Know Your Worth
If you’re worried that your profit rate may be too high and that it turns off potential clients and temporary workers, think again. Raising prices and profits is a common marketing tactic. Many assume higher rates mean fewer clients, fewer customers, less profit. However, it has the opposite effect.
When you raise prices (or, in this case, disclose a higher profit rate), you’re presenting your true worth and confidence to potential customers and clients. Those who chase the lowest prices possible won’t necessarily treat you as a long-term resource. Instead, those that present higher rates exhibit better service and a high-quality product in which many choose to invest. This marketing strategy can still work without exposing rates, as long as you provide a quality experiences.
Find out how Foxhire can help
FoxHire is a technology enabled Employer of Record service. If you are negotiating bill rates and pay rates, that means you do contract staffing. Leveraging an employer of record for those contract placements can help you save time, money, and mitigate your risks. Check out how FoxHire can help you now!