The Dirty Truth About Mark-Ups: How Much Money Do Staffing Firms Really Make?
Introduction
Ask any consultant how much they’re getting paid — and then ask the client what they’re paying for that same role. You’ll notice a huge gap. That’s the markup, and it’s the lifeblood of every staffing company.
But here’s the dirty truth: most people in the industry — including many recruiters — don’t fully understand how deep the rabbit hole goes. Let’s break down how staffing markups work, how much firms actually make, and who really profits from every placement.
What Is a Markup in Staffing?
A markup is the difference between:
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What the client pays the staffing firm, and
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What the consultant gets paid.
Example:
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Client rate: $95/hour
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Consultant pay: $60/hour
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Markup: $35/hour
That $35 is what covers the staffing firm’s costs — and their profit.
The Average Markup in the US IT Staffing Market
| Staffing Type | Typical Markup Range |
|---|---|
| W2 Consultant | 25% – 45% |
| C2C (Corp-to-Corp) | 15% – 30% |
| H-1B Consultants | 30% – 55% |
| Direct Client Roles | 50% – 100%+ (rare but real) |
💡 The more layers between consultant and client, the higher the markup.
Where Does the Markup Go?
Staffing companies don’t just pocket the whole spread. Here's a rough breakdown:
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Recruiter Commission – 10–15%
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Bench Cost/Overhead – 5–10%
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Employer Taxes/Insurance (W2) – 7–9%
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Admin/BD Team Costs – 3–5%
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Profit Margin – Whatever remains
👉 So, on a $35/hr markup, maybe $10–12/hr is pure profit — if the consultant is billing consistently.
The Shady Side: When Markups Become Exploitation
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Consultants being paid $40/hr while clients are billed $120/hr.
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Multiple middle vendors taking 10–15% each.
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H-1B consultants unaware of their actual bill rate.
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"Fake end clients" to justify low pay.
Some staffing firms take advantage of inexperienced consultants or those on restrictive visas. It’s legal — but ethically murky.
Why Staffing Firms Defend Their Margins
To be fair, staffing isn't free money. Good firms provide:
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Resume polishing
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Interview coaching
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Immigration support
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Payrolling and tax compliance
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Marketing + lead generation
They earn their cut — but only when they’re transparent and ethical about it.
How Much Do Staffing Firms Really Make Annually?
Let’s break down a simple math model:
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20 consultants placed
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Average markup: $30/hr
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Avg billing: 160 hours/month
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Total profit: $30 × 160 hrs × 20 consultants = $96,000/month
→ That’s $1.15 million/year, assuming full utilization.
📌 Now imagine a firm with 50–100 active consultants.
Consultants: How to Know If You're Being Lowballed
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Ask for your bill rate (you have a right to know).
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Compare it with Glassdoor/Indeed average bill rates.
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Negotiate on renewals or project extensions.
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Build relationships with Tier-1 vendors and go direct.
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If you’re in demand — use multiple vendors to compare offers.
The Future of Markups: AI and Transparency
With AI tools scanning rates, and platforms like Wand, Fieldglass, and GSA Schedules exposing more client rates, the days of extreme markups are fading.
Consultants are smarter. Recruiters are being held accountable. And clients want to pay for value — not layers.
Final Word
Markups aren’t evil. They’re the foundation of how the staffing business works. But excessive markups without value are exploitative — and eventually, unsustainable.
If you’re a staffing firm: Be transparent and build trust.
If you’re a consultant: Know your worth and ask questions.
Call to Action
Have you experienced an unfair markutp? Know someone who got lowballed?
Drop a comment, share your story, or ag someone who needs to see this. Let’s push for a more honest staffing ecosystem.
IT staffing markups, recruiter commissions, consultant bill rate, H-1B consultant pay, staffing profit margins, vendor layers in staffing, real markup examples