As you begin to explore the option of traveling healthcare, you may have found yourself enticed by ads with verbiage such as “Free Housing”, “Free Licensing”, “Travel Reimbursement”, “Free Rental Car”, etc. What you probably haven’t heard is that there is NO FREE MONEY in travel.
Staffing agencies (i.e the companies we work for as travelers), only make money for hours worked. If you haven’t heard of a bill rate, here’s the scoop. Every travel position has a unique bill rate. This is the price the facility is willing to pay for hours worked. For example, a physical therapist bill rate can vary from $60-$85 an hour with an average bill rate being around $65/hour. The more hours worked by travelers, the more revenue the agency can generate. If a traveler doesn’t reach their full hours or calls out sick, the agency cannot bill the facility for those hours. Thus the agency does not get paid. The agency can only bill for hours actually worked.
You’ve probably heard the cliché, “Money doesn’t grow on trees”. This also rings true in the staffing industry. From that overall bill rate, an agency can calculate the total budget for a 13 week contract. Let’s use that average $65 bill rate as an example. For the sake of this example, let’s also assume that the staffing agency must pay a 5% fee to a vendor management service. After the VMS takes their fee, that leaves $61.75/hour. Let’s assume this a standard 13 week contract with a 40 hour guarantee. The total revenue of this contract would be $32,110. From this total value, the company needs to take their fair share to maintain their business and make a profit. The rest of the package goes to the therapist.
What all comes out of each portion of the pay package???
Some food for thought….
On average companies need to generate a 3-5% profit to maintain and ensure the longevity of the company. Each company will have to utilize different margins when creating the pay packages based on what expenses include. For example, a company with an astronomical marketing budget will have to utilize higher margins when creating pay packages than a company that tends not to have a large marketing budget. A larger company with a $40,000/month rent is going to utilize a different margin than a company with a $2,000 monthly rent. Therefore, the convenient services such as housing departments, licensing departments, etc, really are not free. It’s an added bonus that will indirectly effect each traveler that works for that company.
You have to decide what is most important to you! At the end of the day, the bill rate is the bill rate and the total value of the pay package DOES NOT change. Would you rather have a larger weekly NET pay each week without those reimbursements in the beginning? Would you rather max out your travel allowance, licensure reimbursement, and CEU reimbursement?
Something to think about…With the new tax code, we can no longer deduct professional expenses on our taxes. Therefore, it may be advantageous to utilize reimbursements from the agencies when they are creating our pay packages. Packages are subject to customization! APTA, AOTA, and ASHA membership fees are no longer tax deductible. Live CEU courses and professional conferences are also not eligible for tax deduction with the new tax code. These are areas you may want to focus on customizing your pay package if these are important to you.
Added perks such as sign-on bonuses, completion bonuses, tuition reimbursement, and free trips all come from somewhere!
What I want everyone to think about is BIG PICTURE! At the end of the day, where do you want to see your money going to?