ARCH AI: Market Rate Benchmarking
Implementing a robust bill rate management strategy can lead to a 1%-4% reduction in annual program spend. This is achieved through development of a market aligned rate card and optimization of your job taxonomy.
Overpaying contingent workers increases program spend and artificially inflates market rates. Overpaying by 2.5% ($41.00 vs $40.00) in a $20M program will increase annual costs by $500K. When suppliers, hiring managers, or workers have the ability to set and influence rates, the true market rate becomes blurred.
Underpaying contingent workers increases costs and introduces risk. Turnover carries unforeseen costs including recruiting, on-boarding, and revenue lost when positions remain unfilled. Underpaying carries other risks such as labor market reputation, loss of proprietary skills through attrition, and reduced engagement of full time employees
As equal pay laws are instituted, using candidate salary history to determine pay introduces risk. The best countermeasure is salaries derived from market intelligence and analysis while candidate salary histories are left unknown.
Vendor Mark Up Management
HCM Strategies’ services ensures vendor mark up percentages are competitive. Our recommended bill rates consider all variables including pay rates, taxes, and burdens specific to each market.