As a provider of accounting and finance professionals for interim and project opportunities I have seen many companies get squeezed and overpay for services when it is just not necessary. The following process will help you the next time you need a cost effective resource.
*#1. The next time you need to bring in support first evaluate what experience level that professional would fit into with respect to your own staff or organization. I have often seen over and under qualified professionals assigned to a task. This leads to a waste of money or in the latter, a waste of time.
*#2. You need to then assign a salary to the position that is in need of support. A reasonable estimate will suffice.
*#3. Break this salary estimate down to an hourly rate based on a 40 hour work week. A quick way to do this is to take the yearly salary in thousands and cut it in half. Therefore, an $80k employee would work out to approximately $40/hour.
*#4. Next is the markup that providers must include to cover their expenses. The providers cost of carrying an interim employee is around 10% or 11% of the hourly rate. This covers payroll taxes, workers' compensation, etc... National firms use a figure of 15%.
*#5. Anything over and above these two items is gross profit for the provider. Traditionally 1/3 of this will go the the account rep of the provider.
*#6. Never pay more than a 50% markup for any 1 temporary employee. When you need more than 1 resource, demand a discount on each additional temporary.
A good guide line to follow is paying a 35% to 40% markup for professionals with an estimated salary of $50 to $100k. For temporaries with estimated salaries of $100k+, never pay more than a 30% to 35% markup.
*#7. If you follow these steps you will never overpay for interim tax, accounting, or finance support.
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