agency markups - from a hirer's perspective

Subject: agency markups - from a hirer's perspective
From: stevens -at- amdocs -dot- com
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Thu, 8 Aug 2002 11:01:10 -0600

Hello, everyone.

I've found a contractor, who wants $x/hour. What's a fair markup
percentage for an agency who will employ the contractor on W-2 status?

I was sure this would be in the archives, but my searches didn't turn it
up in the last two years. Sites resulting from a Google search had a very
wide range of answers. There are agencies that advertise flat $10 or even
$4/hour markups for 1099, and one says 22% for W-2 - though I don't know
if their benefits equal those that the agency here will offer my
contractor. Some other sites say 25-30% is too high - though that's about
the markup I was expecting. Others said some agencies mark up even 250%,
though I suspect that may have been a year or two ago.

To compare apples with apples, note that I'm starting with what the
contractor wants, and viewing the agency markup as a percentage of that
figure, not starting with the total bill rate and viewing the markup as a
percentage of that.

Note also that in this case I did the finding, not the agency. But there
could be future cases where they will have to do the screening. What's a
fair addition for that service?

Steve Schwarzman

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