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The Argument Against Pay Rate Visibility in Contingent Pricing

From the highest of levels, both have elementary advantages. While bill rates show a final price much like goods in a store, mark-ups allow companies to control how much they think staffing institutions are making for each transaction. This is useful and more common in manufacturing or call centre environments where the pay rates need to be more consistent and volume effects pricing negotiations (like the retail practice of bulk buying).

Digging down a level, another perceived advantage to the mark-up model is apparent pay-rate visibility. Sometimes companies feel they need to know the pay rates of their contractors to decide whether they will be able to afford to hire the contractor permanently, even though it is common for contingent workers to have significantly different pay due to the inherently higher risk in taking on such an assignment. This white paper evaluate the apparent advantage of knowing a pay rate and considers whether or not it should be a factor in deciding on a pricing model.

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