Why All This Talk About Sharing Bill Rates Is Pointless

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By: Adam Gomez

April 10, 2018

By: Adam Gomez

You’ve read it. I’ve read it. We’ve all read it. “If a recruiter or agency isn’t willing to share the bill rate with me I’m running for the hills!” Logically, I completely understand why a healthcare professional wants to know the bill rate. It’s quite simple. They want to be sure they’re not getting raked over the coals! Right? That is absolutely understandable.

But let’s examine this further. Let’s say AG Staffing decides to share bill rates with their travelers. They believe in doing this because they want to provide an extreme level of transparency. And we all know that’s a catchy word these days.

The leaders at AG staffing meet to discuss the rollout of ‘Operation Bill Rate’. As they begin to explore this topic further a few questions pop up. “Will we reduce the actual bill rate to account for the vendor fee?” “Should we adjust the bill rate to account for operating costs…after all the reason travelers want to know is they want to understand how much we’re taking off the top, right?”

Fortunately for AG Staffing their CEO, Adam Gomez, isn’t phased by the questions his team asks. Adam firmly announces to members of his executive team, “The bill rate is what we bill the facility, period! We will share the dollar amount we bill for each position with our travelers. But we will also share with them our actual profit on each deal, so they understand how much we are actually taking off the top.”

And so AG Staffing launches Operation Bill Rate. Drum roll please…

Within twenty-four hours of launching the campaign, the agency is under fire. Their social media pages are lit up like they’re giving away free puppies for each post! Travelers are up in arms and letting the world know it! Even travelers who’ve never worked for, or even considered working for, the company!

How dare AG Staffing take X% of the bill rate!? I’m doing the work…I’m the one leaving my family and living thousands”…and then… sensing blood in the water, it’s the competitors turn, and they jump in and add some fuel to the fire proclaiming,…we only take Y% of the bill rate. And the flood gates open with agencies throwing out number after number, each positioning and posturing for their righteous seat at the top. And before you know it we’ve ended up precisely where we started which is a state of utter confusion and mistrust about bill rates and agency profits.

Why?…

Because the fact remains, who’s going to verify the information being shared by any agency out there? Who is policing whether a bill rate posted on a public forum or social media page is in fact the true bill rate? How would they even do that? And furthermore, how can anyone outside of the company verify whether an agency is taking 20% gross profit or 15%. Complicating this even more some firms calculate 20% after they’ve deducted some expenses, while others deduct all of their expenses after. Apparently gross profit carries different meanings to different agencies.

So you see not every 20% GP is created equally.

And so in the end we still end up knowing very little more than we did when we started. Because what was truly needed from the start is trust. And trust cannot be gained by knowing the bill rate. Or by knowing what an agency’s gross profit margins are. But it absolutely can be lost…

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