CSP Contract Staffing & Billing Practices

Question 1

Which document formally establishes the terms of a staffing engagement between a staffing firm and a client company?

Accepted Answer

Client service agreement

Answer

A client service agreement formally establishes the terms, rates, responsibilities, and conditions governing a staffing engagement.

Question 2

The 'bill rate' in staffing is best defined as:

Accepted Answer

The total cost charged to the client for each hour of temporary labor

Answer

The bill rate is the total hourly amount charged to the client and includes the worker's pay rate, employer taxes, benefits, overhead, and the staffing firm's markup.

Question 3

A staffing firm's 'markup' percentage is calculated as:

Accepted Answer

(Bill Rate / Pay Rate) - 1

Answer

Markup = (Bill Rate / Pay Rate) - 1, expressing how much above the pay rate the bill rate is as a percentage of the pay rate.

Question 4

Which of the following costs is typically included in the 'employer burden' component of a staffing firm's bill rate calculation?

Accepted Answer

FICA taxes and workers' compensation insurance

Answer

Employer burden includes payroll taxes (FICA, FUTA, SUTA) and insurance costs (workers' compensation, general liability) that the staffing firm pays on behalf of the temporary employee.

Question 5

A 'temp-to-perm' conversion fee clause in a staffing contract is designed to:

Accepted Answer

Compensate the staffing firm when a client hires a temporary worker directly

Answer

A conversion fee compensates the staffing firm for its recruiting investment when a client company directly hires a temporary worker the agency placed.

(CSP) Certified Staffing Professional Practice Test

(CSP) Certified Staffing Professional Practice Test

CSP Contract Staffing & Billing Practices