Employee and Agency Cost calculator comparison Version 2.0
I hope your 2020 is off to a great start! I have included version 2 of our calculator comparing how much an employee actually cost an employer vs how much it would cost an agency. Obviously, employers numbers might be different due to how much their workers comp rates are as well as there admin costs. It should give you a general idea about how much money an agency could save you from helping staff your entry level/general labor positions.
For this example we will use a company that employs 10 workers at a rate of $10/hr.
We multiply total amount of payroll 7.65% for FICA Taxes on total cost of those 10 workers ($4000). Then we add FUTA*(6%), SUTA*(3.125%), Workers Comp*(5.7%), Admin Costs*(10%) Benefits*(6.5%) (see below), for this example. The (*) denotes that the amount listed can be very different according to different state, comp code rates, and admin costs for any given employer. However, for this example lets keep these number the same.
In this example we come to total costs of what employer pays to employ 10 employees at $10/hr. If an agency were to employ the same workers the costs per employee decrease due to lower admin fees and markup. In this example, if an agency charges a 30 percent markup on 10 workers at $10hr and total cost is $153 dollars less per pay period. Over the course of 1 year equates to $153 * 52 weeks/yr= $7956 savings!
What would you do with an extra $7956 in savings for your company just in payroll. This is not even including recruiting costs and liability savings! Potential savings can be much more but for pay rolling purposes those are incredible savings.