Electrician staffing agency vs direct hire: the real cost

An agency electrician costs you his wage plus the agency's markup on every hour he works. A direct hire costs his wage plus your own payroll taxes and benefits, plus whatever it took to find him. On the worked example below, direct hire pays for itself somewhere between about 170 and 1,360 hours, depending on what the hire costs you and what benefits you add.

Agency websites don't lay this out side by side. Here it is, with the math shown so you can run it on your own numbers.

01Staffing agency, temp-to-hire or direct hire: the side by side

The three ways differ on whose payroll he's on, what you pay per hour, and who he belongs to when the job ends.

The rest of this page puts dollars on each row.

02What's inside an agency bill rate

The bill rate is his hourly wage plus a markup, and the markup has to pay his payroll taxes and comp before the agency makes a dime.

Insight Global, a staffing firm, defines the bill rate as "the total amount a client pays a staffing agency for a worker's services" and the pay rate as "the wage a worker earns." The gap covers the firm's profit and its costs beyond the wage, like payroll taxes, benefits and onboarding.

What that gap usually runs:

• What contractors tell us: one national electrical contractor told us agency markups run "30 to 40%" on average, and said he could be wrong on that.
• One published price sheet: a staffing firm's pricing on the Sourcewell cooperative purchasing contract lists a 33% markup on pay for "skilled trade and general labor," with electricians named in the category. A $50.00 pay rate bills at $66.50.
• Vendor guides: a recruiting software company, citing another vendor's construction benchmark, puts construction staffing markups at "roughly 25 to 75 percent," with skilled trades on data center builds at the high end.

No survey we could find breaks out markups for electricians alone, so treat every range as a range. For the full table on what a 30%, 40% and 50% markup costs per hour, week and job, see how much agencies mark up an electrician.

03The worked example: an $87.50 bill rate

At an $87.50 bill rate, the hand makes about $62.50 to $67.31 an hour and the agency keeps $20.19 to $25.00 of every hour.

One national electrical contractor told us an agency billed them about $87.50 an hour, plus per diem, for hands sent to one of their jobs. They called it "outrageous." Here's that bill rate run at a 30% and a 40% markup, the range they guessed. Straight time only, no per diem.

The math: $87.50 ÷ 1.30 = $67.31, and $87.50 ÷ 1.40 = $62.50. Thirteen weeks at 40 hours is 520 hours. At 50 hours it's 650.

That same contractor needed 6 to 10 journeymen for at least 3 months. Scale it up:

• 6 hands at 40-hour weeks: $62,994 to $78,000 kept by the agency.
• 10 hands at 50-hour weeks: $131,240 to $162,500 kept by the agency.

Watch the word "markup." Some agencies quote a margin, a share of the bill rate, which puts the hand's pay lower: $61.25 at 30% and $52.50 at 40% on the same $87.50. Backing the wage out of your bill rate shows both formulas and what to ask for in writing.

04How much of the markup is real cost

Roughly $8 of that $20 to $25 spread is payroll tax and comp-type cost you'd also pay if he were yours. The rest is the agency's recruiting, overhead and profit.

The Bureau of Labor Statistics measures what employers pay on top of wages. For private construction in June 2026, legally required benefits (Social Security, Medicare, unemployment insurance and workers' comp) ran $4.42 an hour on $36.13 an hour in wages. Our math: $4.42 ÷ $36.13 = 12.23% on top of wages.

Treat the 12.23% as a rough yardstick. Workers' comp for electricians varies by state and carrier, and Social Security and unemployment taxes stop at wage caps.

The same Sourcewell price sheet makes the point another way. It prices payroll-only service, where the firm just carries the worker and does no recruiting, at 23%. Skilled trades with recruiting run 33%. On that sheet, finding the man is worth about 10 points of markup.

05What temp-to-hire costs you

Temp-to-hire means you pay the bill rate for a stretch, then either pay a conversion fee or wait until the fee burns off.

Real terms from published staffing contracts:

• Robert Half's office staffing (OfficeTeam) terms on a public cooperative contract charge 25% of annual starting salary if you hire in the first 160 hours, stepping down 5 points every 160 hours to no fee after 640.
• Another staffing firm's published terms let you hire him after 520 consecutive hours. Hire earlier and you pay a prorated 20% of annual salary placement fee. Hire him without telling them and they add a 10% violation fee.
• The Sourcewell price sheet above lists temp-to-hire at 12% of annual pay.

Our math on the $62.50 hand: $62.50 × 2,080 hours = $130,000 a year. A 12% fee is $15,600. A 25% fee is $32,500. The full breakdown, including when it's cheaper to wait out the scale, is in temp-to-hire conversion fees, explained.

These clauses also reach well past the job. Robert Half's terms charge the fee if you hire the person "within twelve months after the last day of the assignment," even through a different agency. The other firm's clause runs 12 months from the start of the assignment. Read that line before the first man shows up, and put the rest on your staffing agreement checklist.

06Who owns the crew when the job ends

On an agency job, the hand is the agency's employee, so the agency decides where he goes next.

One national electrical contractor told us they went through four staffing agencies on one job and still use one. The hands from that one do good work, but "they keep getting called to other jobs for more money," and "it puts us in a bind. We have to replace these guys."

That's the model working as built. The agency's markup is bigger on a higher bill rate somewhere else. Nothing in a standard temp agreement says your hand stays to the end of your job unless you write it in. Why this happens and what to do about it is in why agency electricians leave mid-job.

A direct hire can leave too. But when he's on your payroll, you set the rate, you decide what the next job is, and he's not getting a call from his own employer about a better ticket.

07Who checks that he's really a journeyman

An agency screens before he shows up, but how hard it screens is up to the agency. On a direct hire, it's you.

The same contractor led the call with this: "so-called journeymen that can't bend conduit," some holding only "apprentice licenses." Paying a markup doesn't buy you a guarantee that the card matches the work. Why agencies send journeymen who can't bend pipe covers the checks to demand before you sign.

Hiring direct doesn't mean doing it all yourself. You can post and screen in-house, or pay someone to find him. A staffing agency, a recruiter and a headhunter all get paid differently and own different parts of the job. Staffing agency vs recruiter vs headhunter lays them side by side, and questions to ask a recruiting company before you pay helps you check one out.

08The break-even: when direct hire beats the agency

Direct hire wins once your hourly savings have paid back what it cost to find him. Break-even hours = one-time hiring cost ÷ hourly savings.

Run it on the $62.50 hand at a 40% markup. Say you hire the same hand direct at the same wage:

• Agency: $87.50 an hour.
• Direct, wage plus legally required costs: $62.50 + $7.65 = $70.15. You save $17.35 an hour.
• Direct, plus construction-average benefits: BLS shows insurance at $3.90 and retirement at $2.39 an hour in private construction (June 2026). $70.15 + $6.29 = $76.44. You save $11.06 an hour.

Now plug in what the hire costs you. Ads, your time on the phone, a recruiter's fee: pick your number.

Read it against the job. A 3-month job at 50-hour weeks is 650 hours. A $3,000 hire pays back inside that job either way. An $8,000 hire pays back only if you skip the benefits. A $15,000 hire doesn't, so it only wins if you keep him for the next job, which is the point of hiring direct.

Overtime tilts it further. If your agency bills overtime at 1.5 times the bill rate, as Robert Half's terms do, every hour past 40 widens the gap by half again.

When the agency still wins

• Short peaks. You need 4 extra hands for 3 weeks to make an energization date and won't need them after.
• Payroll in a new state. You don't want to register for payroll and comp in a state you'll work once.
• No time to screen. You'd rather pay the markup than run interviews this month. Just know what you're buying.

If you'd rather put licensed journeymen on your own payroll, apply here and we'll see if we can put 5 licensed electricians in front of you in 14 days. If we don't book you 5 in 14 days, you don't pay.

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