Staffing Industry Glossary

Applicant Tracking System (ATS)

Software that manages candidates and job orders through the hiring pipeline, from sourcing and screening to placement.

Bill Rate

The hourly rate a staffing agency charges the client for a placed worker. It covers the worker's pay, employer payroll burden, and the agency's gross margin.

Pay Rate

The hourly wage the agency pays the worker, before employer taxes and burden.

Spread

The dollar difference between the bill rate and the pay rate; the gross profit per hour before overhead.

Markup

The spread expressed as a percentage of the pay rate: (bill − pay) ÷ pay. A $9 spread on an $18 pay rate is a 50% markup.

Gross Margin

The spread expressed as a percentage of the bill rate: (bill − pay) ÷ bill. Always lower than markup for the same spread.

Payroll Burden

Employer-side costs on top of wages, FICA, FUTA/SUTA, workers' compensation, and benefits, usually adding 12–25% to the base wage.

Fully-Burdened Cost

The true hourly cost of a worker: wage plus payroll burden. The number a bill rate must clear before there's any margin.

Active Placement

A worker actually on assignment in a given period, one with a pay stub, logged hours, or an active job order. FreshStaff prices on active placements rather than per user seat.

Job Order

A client's request to fill one or more positions, with the role, rate, location, and requirements the agency staffs against.

Direct Hire

A permanent placement where the client hires the candidate directly and pays the agency a one-time fee, typically 15–25% of first-year salary.

Temp-to-Hire

An arrangement where a worker starts as a temporary employee of the agency and the client can convert them to a permanent hire, often after a set period.

Conversion (Buyout) Fee

The fee a client pays to convert a temp to a permanent hire. It's often reduced as the temp logs hours and waived past a threshold.

Placement Fee

The one-time fee for a direct-hire placement, calculated as a percentage of the candidate's first-year salary.

Blended (Weighted-Average) Rate

When a worker performs two jobs at different pay rates in a week, the FLSA regular rate used for overtime: total straight-time pay ÷ total hours.

Fill Rate

The share of job orders an agency successfully fills, a core measure of recruiting effectiveness.

Time-to-Fill

The elapsed time from opening a job order to placing a worker in it.

Redeployment

Placing a worker on a new assignment when their current one ends, keeping good workers active and reducing sourcing cost.

Put these to work: the markup calculator, bill rate calculator, and blended-rate overtime calculator turn these terms into numbers.