Tackle Fluctuating Costs with Global EOR Pricing for Staffing Agencies

Strong profit margins are key to growth in this tough economic climate. Staffing agencies with the highest gross margins expanded by over 50% in 2023, while others struggled to break even or even saw their revenues shrink.

Protecting these profit margins requires a delicate balancing act. You must expand your service offerings to keep clients satisfied while maintaining low operational expenses.

Many staffing agencies turn to Employer of Record (EOR) services to source and deploy talent for their clients and remain competitive. However, legacy providers often use local partners with opaque pricing models and variable fees, making it hard to predict costs. These unpredictable expenses cut into your profit margins, limiting opportunities for reinvestment or expansion.

To stop fluctuating costs from impacting your bottom line, it’s best to prioritize EORs with a predictable pricing model and global coverage. Let’s explore all the ways a solution like Deel can help you maintain healthy profit margins.

Budget more effectively

Predictable pricing models allow your staffing agency to budget more confidently. They eliminate the risk of unexpected expenses and provide financial stability across countries, making it easier to maintain healthy profit margins.

Legacy providers can’t offer predictable pricing due to their limited coverage. They rely on in-country partners to fill the gaps, meaning they often set prices based on local arrangements. This fragmented approach makes it impossible to maintain consistent costs across regions, forcing you to either adjust client rates or absorb the additional expenses yourself.

Additionally, their reliance on local partners makes it harder to get upfront quotes. When handling new client requests, you can’t be sure how well these proposals will fit into your budget.

Look for EOR providers with an extensive global network to avoid budgeting issues. For example, Deel has owned entities and infrastructure in over 100 countries, including the US, UK, and Germany. We can give you an upfront quote and guarantee there will be no costly surprises.

Lower costs

Global EOR providers usually offer the most competitive prices. As they have a direct presence in most countries, they can keep their rates low and minimize unnecessary charges. They don’t have to inflate prices to account for the fees charged by local partners and intermediaries.

Additionally, global providers can leverage economies of scale to reduce prices further. They’re able to spread costs across all their clients in one region, allowing them to charge less per employee. On the other hand, legacy providers using an aggregate model can’t go lower than what their local partners charge them.

This means global providers like Deel are more likely to offer the best deal, even in countries with high setup costs, such as the UAE and Germany.

Streamline global payroll

Managing payroll across different regions can be costly. Global EOR providers make expenses more manageable by consolidating payroll for all your employees and offering one fixed rate.

By contrast, legacy providers either don’t offer payroll services or outsource these processes to their in-country partners. Again, these partners are likely to have different pricing models with variable fees, making it hard to analyze costs and forecast expenses.

Global EOR providers also handle complex currency exchanges to keep payroll costs predictable. For example, Deel uses a method called Forward Rates, which are agreed-upon fees for a specific day. This shields your staffing agency from sudden fluctuations and potential disruptions to your cash flow.

Minimize compliance risks

Global providers offer superior compliance management compared to legacy systems, significantly reducing the risk of costly issues. As they maintain full control over every process process, there’s no chance of gaps that can result in errors or mismanagement.

Like all EOR services, legacy providers should assume liability for compliance issues as the defacto employer. The trouble is that they can’t shield you from all the repercussions. For example, suppose there’s a case of worker misclassification at your agency. The EOR may bear the legal costs but you still have to amend the contract or end the placement early, causing a lot of disruption to your client’s operations.

Frequent issues may frustrate clients and cause them to leave your services, instantly reducing your net revenue. That’s why it’s best if the EOR service not only assumes liability but also guarantees continuous compliance with all the relevant laws.

Direct oversight also holds global providers fully accountable for compliance. If you ever have doubts or uncertainties about using Deel, for example, you can contact your customer success manager.

As legacy systems rely on in-country partners, it may be unclear who bears ultimate responsibility for compliance management. You may find yourself chasing different people instead of getting a fast resolution to issues.

Save on labor costs

Relying on one consolidated provider means you spend less time on logistics. Instead of coordinating with multiple vendors, you can deal with a single point of contact for all processes.

For example, Flexhire cut the time spent on administration by 80% after switching from another EOR provider to Deel.

Global EORs also standardize processes and policies across regions, meaning your team doesn’t have to keep adapting to different workflows or resolving inconsistencies. For example, you only have to learn to use and manage one type of software. This consistency ensures smoother internal operations and allows you to allocate resources more effectively.

As a result, you can maintain lean teams and spend less of your agency’s budget on labor costs. Your existing employees can spend less time on back-office operations and focus more on client relationships and service offerings.

Source top talent quickly

Chances are that recruitment is one of your costliest operations. Research shows staffing agencies spend an average of $16,388 per month on job listings alone.

While global EORs can’t reduce your hiring costs, they can guarantee a return on your investment. They streamline the onboarding process across locations, ensuring you can source niche expertise and tap into foreign talent pools. This makes it easier to fulfill client needs and maximize your earning potential.

For instance, Deel can onboard workers in a new location in as little as one day. There’s virtually no risk of you losing them to competitors in such a short time frame.

Legacy providers can’t make these guarantees as they rely on in-country partners. There are likely to be different timelines and varying standards across locations, making it difficult to develop a cohesive hiring strategy. You may be unable to move quickly enough when you interview a promising candidate.

Redeploy contingent workers seamlessly

Growing staffing agencies are twice as likely to be redeploying workers than competitors. This strategy reduces your turnover rates and allows you to fulfill more client requests.

The challenge is relocating talent across borders, given the complexity of many visa and immigration processes. If there are any delays or complications, workers might not arrive at their placement as scheduled.

Top providers like Deel offer visa and immigration services, including:

• Eligibility checks
• Document management
• Assistance completing forms
• Fee payments
• Regular updates

Global providers are transferring workers between their own EOR entities, which means you don’t have to coordinate with other partners or intermediaries. You only need to communicate with the worker and your customer success manager. By keeping the relocation process simple, you can avoid complications that leave top workers out of action and delay placements getting filled.

Retain your best workers

Global EORs provide a smoother, more consistent experience for employees than legacy systems, helping you to foster loyalty among your team. This lowers your recruitment costs as you have fewer roles to replace.

The provider’s standardized processes mean everyone receives equal care and support. For example, Deel is always available to help, as we have local teams everywhere we operate. Employees can get their questions answered no matter their time zone, location, or issue. This consistency prevents feelings of unfairness or disparity from arising and strengthens your reputation as a dependable agency.

With a dedicated point of contact, you also don’t need to navigate multiple providers. You can access local expertise quickly and get fast resolutions to employee issues.

Most importantly, when there are none of the complications of a legacy agency, contingent workers have a better experience. They can focus on their jobs without worrying about payroll, tax, or compliance issues. When their placement is over, that means they’ll be more likely to return to your agency.

Maximize margins with one reliable partner: Deel

To remain competitive, staffing agencies must expand their services while preventing costs from spiraling and eating into their profit margins.

Top providers like Deel help you keep tight control of your finances and manage your budget effectively. Our transparent pricing model and detailed quote calculator provide you with clear, upfront costs, so you don’t have to worry about surprise expenses.

All Deel’s customers can benefit from:

• Broad, international coverage
• The option to add global payroll
• Visa and immigration support
• Scalable technology
• Detailed, upfront quotes
• Transparent pricing
• Flexible payments
• Predictable monthly costs
• Local compliance expertise
• 24/7 responsive customer support

Ready to begin your staffing agency’s digital transformation? Book a 30-minute call with Deel to learn more about our EOR services.