Determining a Mark-Up for a Contract Placement

A common question we often hear from recruiters is “How do I determine a markup for my contract placement?”  Mark-ups are also referred to as multipliers.

For those of you who are not familiar with this term, a multiplier is the result of dividing the bill rate by the sum of the pay rate and per diem.  Per Diem is the daily rate that is given to help contractors working away from home cover their living expenses.

Contract placement multipliers

Once you know what the contractor pay rate will be, you can multiply that pay rate by a multiplier to calculate the bill rate.  For example, if you had a $49.50 bill rate and a $30 pay rate, the multiplier would be 1.65.

Top Echelon Contracting tracks the multipliers for each placement made through our contract staffing back-office to determine the average multiplier.  Our records show that the average multiplier is currently 1.63.

We always recommend that recruiters use the average multiplier as a starting point when trying to determine the client bill rate.  However, keep in mind that there is no standard multiplier for every contract placement.

Above: Mark-up for a Contract Placement

Multipliers generally fluctuate between 1.50 and 1.80 for technical and professional placements.  Healthcare placements tend to run higher.

Depending on the type of candidate needed and the location of the job, you may need to adjust your rate.  For instance, if the job order requires a hard-to-find skill, the multiplier is normally higher.

Your recruiter income is directly affected by the multiplier and the bill rate that you negotiate as a result.

Are YOU in need of contract staffing solutions or contract placement services?

Then download our Quick-Start Guide to Contract Staffing. Or request a demo with one of our contract staffing specialists.

You can can also call us at 888.627.3678. Start making contract placements and start making more money!