Every growing business needs help filling jobs, so a staffing firm will always have demand. But that doesn’t mean that pricing for your services is easy.

If you’re starting a staffing firm, you should determine how much it costs for you to fill a job as well as how much you want to make in profits. You should also determine whether to charge hourly or a commission. Then, you can use those and other factors to price your services.

Keep reading to learn how to set your staffing rates and how to determine your profits.

Factors That Affect Your Rates

Many factors can determine how much you should charge for your staffing firm services. On the one hand, you want to make a profit. But you also don’t want to charge too much where companies can’t afford you.

To get the base rate you should charge, consider things like how long you’ll work and how much experience you have. Think about these factors when you set your pricing:

  • Desired income
  • How many hours you work
  • Your experience
  • Experience of your employees
  • The market you work in

Let’s break a few of these down in more detail:

Desired Income

Whether you’ll be doing the staffing or if you’re going to hire others, you have to account for the time. You should think about how long it takes to find qualified candidates to fill the jobs that companies need. But you should also consider how much time it takes from finding candidates to placing one in a job.

While staffing firms don’t have to charge per hour, you should consider the per-hour rate when determining any commissions or other charges. Then, you can pay any of your employees for their work.

Your location, job market and the type of job you’re filling can all affect the time spent working. For example, it might be easier to fill a role if more people are looking for work. Then, you may not have to charge as much.


If you’ve ever worked for a staffing firm before, you have the experience that you can use in your new firm. You may know how to find clients, how to seal the deal on a job and more. But if you’re new to the staffing world, you won’t have that experience.

You don’t need the experience to start a staffing firm, but you may not be able to charge as much as someone with experience. Over time, you will be able to raise the rates on your services, but now, you still need to charge enough to pay for your expenses.

Whether you have a few employees or a large office space, you’ll need to make sure your rates cover those costs. Then, you can think about making a profit.

Calculating Profit Margins

To get your business to make money, you need to think about profit margins. You don’t need to have fantastic profits at the start, but you want your services to earn you more than the cost of running your business.

When you have an idea of the rates you can charge, you can calculate potential profit margins. If you want a slightly higher margin, you can charge a bit more. But remember to be realistic, especially as a new staffing firm.

What to Target

Part of calculating profit margins involves determining what margin to target. As a service-based business, you should aim for about 15 to 20 percent. That means that you’ll make 15 to 20 percent more than the cost of providing each service.

If you charge $100 to staff a job, you should try to keep the cost at around $80 to $85 so that the last $15 to $20 is pure profit. As you start, you should consider your profit margins along with your base price and experience.

If you don’t have enough experience to demand that high of a profit margin, you might need to charge a little less. In the beginning, you may have a profit margin of around 10 percent, but that’s still relatively good.

What to Expect

You may need to take a lower profit margin because you may not have the experience to demand higher rates. At this point, you will probably have more expenses, like finding an office space or networking to find clients.

But as you get more experience and can lower your business costs, you can watch your profit margins increase. If you can do that, you won’t have to charge the client more to make more.

Calculating Your Markup

Along with your profit margin, you should calculate your markup. Your markup is the difference between the price of your services and how much it costs you to offer them. The markup is like the number version, while your profit margin is a percentage.

Calculating your markup can help when it comes time to increase the price of your services. If you operate with a 20 percent margin, you can use that to calculate a new rate. Then, when your business costs increase, you can increase your prices accordingly.

Determine Your Costs

To determine your markup amount and percentage, you need to know how much it costs for you to offer your services. You should have an idea of this number from when you priced your services.

If you ever want to raise your prices, you should consider your operating costs. Think about how much you pay to lease an office or how much you pay your employees. Then, you’ll know the cost of your staffing services.

Determine Your Ideal Profit Margin

If you want to increase your profit margins, take the cost of your services, and divide it by your desired margin. Then add that number to the initial cost to get your markup. Your ideal profit margin can and will change in the course of your business.

And it’s an essential factor to consider when changing your prices. Then, you can make sure that you can increase profits, even with higher business costs.

How Placement Types Affect Your Bill Rate

The types of jobs you fill can affect how you charge companies. Whether you fill primarily temporary jobs or prefer to find permanent positions, you should consider how to bill for each type. The way you charge may also affect the rate, either per hour or as a commission.


Billing for temporary jobs is relatively easy since you can use an hourly formula. Consider how much you want to pay your employee for doing the work. Then, think about the markup and profit that you want your business to make.

That will give you an hourly rate to charge a company for filling a temporary job. But this strategy doesn’t work as well with permanent positions.


If you fill a permanent job, you will only have that one chance to profit from it. Compared to a temp job where the worker may be back for help, they won’t need you again. So it makes sense to charge the company more.

For permanent jobs, you can use a commission structure. You can look at the annual salary of the job you’re filling and charge about 10 or 20 percent of that. Another option would be to take the salary, and for every $1,000, you charge 1 percent.

Doing that will allow you to make a higher commission on higher-level positions since you may need more time to fill them. On the other hand, you may not need as much time to fill an entry-level job.

Temporary to Permanent

If you fill a temporary job and the company decides to hire the worker permanently, you can charge a commission. Then, you can make a little more even though you won’t have to fill that position in the future. The commission doesn’t have to be as large as for a permanent job, but it can be a nice bonus.

A Note On Flat Rates

When deciding how to price your staffing services, you may think about flat rates. Charging a flat rate can work for some staffing firms, but you should be careful. If you typically staff lower-paying, easier to fill jobs, you can make decent money this way.

But if it takes you a long time to staff a position, you may lose money. Flat rates can be appealing to clients since they’ll know how much they’ll have to pay. However, you should consider the average cost of filling a certain job before setting a flat rate.

You may be able to offer flat rates eventually, but you should use hourly rates to start. Then, you can make sure that you’ll make money on each placement.

The Price Is Right

Pricing your staffing services involves a combination of your base operating costs, employee pay and desired profit. No two staffing services will charge precisely the same amount or in the same way. Before you settle on a price, consider if it’s worth it for you and your clients.

And if you get more experience or find your rates aren’t making you the profits you want, you can raise them. But make sure you consider the same factors to raise your prices as when you first set them. If the problem is getting your invoices on time so you can meet payroll, consider using a payroll funding service, which can help you get the right cash flow for your firm.

More resources for starting your own staffing firm: