Free calculator for staffing agency owners
How many billed hours does a staffing agency need to break even?
Temp pay, taxes and comp rise with every hour billed. What is left per hour pays recruiters, the office and insurance. Break-even is the number of billed hours a month that covers them.
Break-even point
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billed hours a month to cover every cost
Profit at today's level
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per month, before owner pay
Cushion above break-even
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how many you could lose and still cover costs
The starting numbers are an example for a staffing agency. Replace them with yours.
The worked example
Each billed hour brings in $32 and costs $25.50 to serve. That leaves $6.50 toward fixed costs of $55,000 a month. Divide one by the other and you need 8,462 billed hours a month to break even. Every billed hour past that adds $6.50 to profit.
Ways to lower break-even in a staffing agency
- Raise bill rates when pay rates rise, with markup terms in the contract.
- Win clients with shorter payment terms or deposits.
- Cut workers' comp cost with safety programs at client sites.
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