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Resource Guide
Permanent Placement vs Contract Staffing Costs
Financial analysis comparing total cost, break-even timelines, and strategic considerations for healthcare workforce planning.
For CFOs & HR Leaders: The choice between permanent hire and contract staffing is strategic—involving total cost, time horizon, and flexibility. This analysis breaks down the full financial picture.
Hospital executives face recurring decisions: hire permanently or use contract staff? While permanent employees have lower hourly costs, they require benefits, onboarding, and long-term commitments. Contract staff have higher rates but provide flexibility and eliminate overhead costs.
Cost Component Breakdown
Permanent Hire
- • Base salary & wages
- • Benefits & taxes (30-40%)
- • Recruitment & onboarding ($3-5K)
- • Training & ramp-up time
- • Turnover risk (1.5-2x salary to replace)
Contract Staffing
- • All-in bill rate (includes markup)
- • No benefits overhead
- • Minimal recruitment costs
- • Faster deployment (1-3 weeks)
- • No long-term liability
Total Cost Comparison (RN Example)
Full-time RN, $35/hr base, 35% benefits, $60/hr contract rate
Permanent - Year 1
Base Salary$72,800
Benefits (35%)$25,480
Recruitment$4,000
Training$3,500
Total$105,780
Contract - Year 1
Bill Rate (2,080 × $60)$124,800
Total$124,800
+18% vs permanent
Decision Framework
Choose Permanent When:
- • Established position with 12+ month need
- • Role requires deep facility knowledge
- • Local talent available
- • Budget allows recruitment investment
Choose Contract When:
- • Short-term need (under 12 months)
- • Immediate coverage required
- • Hard-to-recruit specialty
- • Census fluctuation makes headcount risky
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