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Question: Diane being a contract staffing pro, can you share your thoughts? I just talked to {name of EoR service}. Their prices seem much higher than other invoice factoring choices out there. They are charging 19 % for factoring. Don't you think that is too high? My Answer: You are misunderstanding. They don't charge 19% for factoring. They charge about 17% for staffing employer of record services, which includes state-by-state compliance, payroll processing, tax deductions and reporting, workers comp, umbrella insurance, liability, unemployment claims management, invoicing, and accounts receivables. Then, if you use them for funding, that's about 2% on top of the 17%. EoRs only provide funding if you use them as an Employer of Record. So, if you only need factoring, yes, my recommendation is to find a factoring company, or better yet a bank line of credit, rather than an employer of record.
Kaamwork
5mo
Clarifying the cost structure of EOR services is essential. Understanding the breakdown of fees helps in making informed decisions. For pure funding needs, looking at factoring companies or bank lines of credit can be more economical.
Greg Moore
5mo
Great clear breakdown here. I talk to many new staffing business owners that are confused on this.
Yes! We can't get around all the costs that go into the burden! Working for a staffing company doing Contract placements I'd say the 17% is about spot on acurate.
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