Margin Calculations and Why They Matter for Recruiters

What’s your revenue for hiring out temporary and permanent candidates?

As a staffing company and recruiter, you must know precisely how much profit you’re making on your temporary or permanent job openings before you place someone on an assignment. You likely see the markup for your placement, but do you know how this placement affects your overall bottom line?

If the answer is “no” or “sometimes,” you’ll likely want to keep reading.

The goal is to be cost-minded and detail oriented.

For a staffing business to be profitable – in the short term and over time – a comprehensive understanding of pricing and everything that goes into it is required. This basic notion will help determine your true cost of sales BEFORE you quote your pay and bill rates. In short, a successful staffing firm should know how much to accrue for every dollar or hour of labor that is placed. 

Enter stage left, the Pay Package and Margin Calculator. 

In the old days figuring out pay and bill rates meant sharpening the pencil, firing up the calculator, and hoping you didn’t forget anything. Those days are gone (or should be) and an excellent best practice to ensure that proper cost assessments are made without a lot of guesswork is through the use of staffing software that includes a margin calculator.

When exploring margin calculator platforms, recruiters and staffing organizations should make sure that the software technology provides real-time insights into total expenses and margins for every candidate. This will help the recruiting team to prepare pay packages with confidence and close deals based on real-world analytics, quickly, while driving cost effectiveness.

In our software, a recruiter can quickly and easily set the margins targeted to hit with every placement. Recruiters can plug in everything that they need to give a potential candidate a pay package within seconds. This allows for timely communication with the applicant, faster speed to market and higher placement rates.

What about staying flexible for your candidates?

One of the reasons RapidHire Tool is the solution for so many staffing agencies is the ability to immediately see the differences between Pay Rate X, and Pay Rate Y with an increased stipend. By locking in a minimum margin, accounting for burden (like employment insurance) and even customizing state-by-state minimums, you ensure your recruiting team cannot go below the absolute break-even point. You also empower them to see what a negotiation can really reward them, since the recruiter commission is visible right in the pay package builder.

Each negotiation in the Pay Package calculator visualized the finances, giving complete transparency for the user.
Each negotiation in the Pay Package calculator visualized the finances, giving complete transparency for the user.

Staffing software features that are built to scale, large or small. 

As your hiring organization grows, considering scalable enablement tools will ensure longevity and success.

Tracking the true cost of doing business is a cornerstone of all successful staffing companies. Every staffing firm should have its own benchmarks for margin objectives. Letting margins slide only a little can have disastrous effects on cash flow and future viability, so the benefits of using a margin calculator should be an essential aspect of your success. 


RapidHire Tool is a mobile-friendly web-based application for recruiters and staffing agencies.  This pay package calculator allows customizable and accurate pay package calculations that managers can control, recruiters can access anywhere, and RapidHire expedites the entire offer process to increase SPEED to market – and we all want to feed our hungry recruiters with good PBJs.

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