ASA Central Network

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  • 1.  Burden Rate

    Posted 07-06-2022 20:09
    Good afternoon, 
    We are new to ASA and was just reading the various discussions. We are currently evaluating our "Burden Rate" for our contractors and how we calculate the Gross Margin. I am curious if anybody has recently done this and has any templates or ideas. We haven't addressed the calculation since 2018 and are now in more than 14 states and have changed significantly since the first time we calculated. Thank you!
    I am the CEO, but most likely will sync anybody with insight up with my controller.

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    Samuel Brenner
    CRB Workforce
    CEO
    720-883-5417
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  • 2.  RE: Burden Rate

    Posted 07-07-2022 09:04
    Hi Samuel,
    Since 1991 we've been performing valuations of, and selling staffing companies. Our standard approach for calculating gross margin for Temps and Contractors:
    • Revenue (what you bill the Employer Client) minus:
    • Temp/Contractor (T/C) wages,
    • T/C FICA,
    • T/C FUTA,
    • T/C SUTA,
    • T/C ACA/Medicare,
    • T/C Workers Comp and any additional health and Employee benefits your Temps/Contractors receive.
    Typically, we do NOT include drug, background and criminal checks, testing or commissions. Referral fees if applicable, could go into Cost of Sales or as a debit in revenue.
    Hope that helps.
    Thanks
    b

    ------------------------------
    Brian Kennedy
    Associate
    R.A. Cohen Consulting
    416.229.6462
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    Original Message
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  • 3.  RE: Burden Rate

    Posted 07-08-2022 08:07

    Hello,

     

    Interesting perspectives on burden rate.

     

    My question is, should the back office operations cost also be a part of the burden rate?

     

    Normally I would say no – however..

    Our business model is to manage the back office operations for staffing firms.

    We do this defining our client's back office process according to our standardized tasks.

    The result is that we charge only for tasks we complete and each task can be allocated to each individual billable worker.

    Resulting in a clear back office/admin cost per billable worker

     

    Kind regards

    Joris

     

     

    Joris Verbeek

    Director

     

    SBPM Partners LLC

    1334 Brittmoore Rd, Suite 1000B

    Houston TX 77043

     

    T: +1 (346) 204 9366

    E: jverbeek@sbpmpartners.com

    www.sbpmpartners.com

     

     

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  • 4.  RE: Burden Rate

    Posted 07-07-2022 09:28
    Burden Rates can vary by States depending on SUTA/WC/Sick Leave/Local City and State Tax.

    Most staffing Companies can see the Burden Rate as low as 12% and as High as 20% depending on Various Factors.

    if you need Calculator please send me Message.

    ------------------------------
    Suketu Trivedi
    Rangam Consultants Inc.
    Somerset NJ
    (908) 704-8843
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    Original Message
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  • 5.  RE: Burden Rate

    Posted 07-07-2022 09:37

    Excellent replies! Thank you. 

    we currently have one standard burden rate across all states. Are you averaging it across states or do you use a specific rate per state? 


    historically, we add an additional per hour cost in the event the contractor elects benefits - is it common to just average out the cost and apply to the burden rate for all contractors?



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    Samuel Brenner
    CEO
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    Original Message
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  • 6.  RE: Burden Rate

    Posted 07-07-2022 09:43
    Hi Samuel... different rates for different States! Also, be specific with additional benefit expenses; don't apply them (even as an average) if they're not actually being paid. Just my $0.02 :)
    Have a great day!
    b

    ------------------------------
    Brian Kennedy
    Associate
    R.A. Cohen Consulting
    416.229.6462
    ------------------------------

    Original Message
    Avionte Ad 1.26.23


  • 7.  RE: Burden Rate

    Posted 07-07-2022 09:48
    Thx Brian!

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    Samuel Brenner
    CEO
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    Original Message
    Avionte Ad 1.26.23


  • 8.  RE: Burden Rate

    Posted 07-07-2022 09:47
    Hi Samuel, 

    In my experience with staffing, we used to do it by gathering the burden rates from the company providing our insurance. We would use a calculator and factor in the costs to make sure our bill rate was healthy enough to achieve our desired GPM. That burden would be applied to all the contractors within that job. It was not applied to contractors across the board as it varied so much from one skill set to another just as it did for states (It was shocking at times to see the differences from one state to another) 

    Hope that helps some!

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    Brooke Faucher
    VP of Sales
    TimeSaved
    226-788-0403
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    Original Message
    Avionte Ad 1.26.23


  • 9.  RE: Burden Rate

    Posted 07-07-2022 10:13
    Hi Samuel, I agree with Brooke. The most impactful (and most controllable) part of the equatiion is Work Comp. As a staffing-focused agent, most of my clients like to have me calculate the burden rate for any placements involving a new state or class code before they finalize an hourly rate. I'd be happy to connect with a phone call if you have any questions about what I take into account when calculating this.


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    Jordan Goff
    jgoff@com-ins.com
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    Original Message
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