EXECUTIVE SUMMARY
Temporary staffing vendor agreements often hide excessive markup percentages and unearned administrative fees above direct worker wages. Contract re-benchmarking trims temporary labor expenses by 10% to 20%.
Staffing agencies rarely bill a single transparent markup. Instead, the gap between a worker's pay rate and the client's bill rate is layered across markup percentages, administrative fees, payroll taxes, insurance, and service charges — each of which can be inflated independently.
In multi-layer vendor contracts, an agency-of-record may subcontract through a second or third provider, adding a markup at every tier. Without a rate card that disaggregates worker compensation from all fees, the client cannot see where each percentage lives or whether it reflects genuine cost versus pure margin.
Administrative fees are a particularly common hiding spot. Some agreements bundle "unearned" fees — charges that recur regardless of whether any corresponding service was actually delivered — on top of already-inflated bill rates.
Restructuring temporary labor costs begins with a rate card that separates every component of the bill rate so each layer can be measured against the market. From that baseline, the contract is renegotiated to competitive norms rather than inherited pricing.
Separate worker pay, payroll taxes, insurance, admin fees, and markup so no single blended number conceals an inflated line item.
Compare markups, fees, and blended rates against prevailing norms for the same roles and regions to identify above-market layers.
Replace open-ended markup percentages with fixed, negotiated markups and remove recurring fees that deliver no service.
Schedule recurring rate-card audits so pricing returns to market norms instead of drifting upward between contract cycles.