Are you curious about the initial investment required to launch an IT staffing agency? Understanding the foundational expenses, from recruitment software to operational overhead, is crucial for success, and exploring a comprehensive IT staffing financial model can illuminate these critical startup costs.
Startup Costs to Open a Business Idea
Understanding the initial investment required is a critical step in launching any new venture. This table outlines common startup expenses, providing a range from minimum to maximum anticipated costs to help in financial planning.
| # | Expense | Min | Max |
|---|---|---|---|
| 1 | Legal & Registration Fees: Costs for business permits, licenses, and legal setup. | $100 | $1,500 |
| 2 | Office/Retail Space: Rent deposit, first month's rent, and potential renovation costs. | $500 | $10,000 |
| 3 | Equipment & Technology: Purchase of necessary machinery, computers, and software. | $1,000 | $25,000 |
| 4 | Inventory/Supplies: Initial stock of goods or raw materials needed to begin operations. | $500 | $15,000 |
| 5 | Marketing & Advertising: Initial campaigns for brand awareness and customer acquisition. | $200 | $5,000 |
| 6 | Website Development: Creation of an online presence, including domain and hosting. | $50 | $3,000 |
| 7 | Working Capital: Funds to cover initial operating expenses before revenue is generated. | $2,000 | $20,000 |
| Total | $4,350 | $79,500 | |
How Much Does It Cost To Open IT Staffing?
Launching an IT staffing agency typically requires an initial investment that can range significantly, generally falling between $30,000 and $150,000. This broad spectrum is influenced by the scale of operations and the chosen business model. For instance, a lean, home-based IT staffing agency startup might need as little as $30,000 to $50,000, primarily covering essential legal setup, necessary software, and initial marketing efforts. Understanding these foundational costs is crucial for aspiring entrepreneurs, similar to the financial planning discussed in guides on how to open IT staffing solutions.
Lean Startup Investment Breakdown
For a streamlined IT staffing agency startup operating remotely or from a home office, the primary expenditures focus on critical infrastructure and compliance. These essential IT staffing business expenses include legal fees for business registration and contracts, which can range from $1,000 to $5,000. Software costs, such as an Applicant Tracking System (ATS) and Customer Relationship Management (CRM) tools, might run from $100 to $500 per month initially, with setup fees adding a few hundred dollars. Initial marketing and website development could account for another $2,000 to $10,000. These figures represent the core cost to start IT recruitment without the overhead of a physical office.
Essential Startup Costs for a Lean IT Staffing Agency
- Legal & Registration Fees: $1,000 - $5,000
- Software Subscriptions (ATS, CRM): $100 - $500/month (initial setup costs may apply)
- Website Development & Initial Marketing: $2,000 - $10,000
- Business Licenses & Permits: $100 - $1,000 (Varies by location)
Larger Operations and Working Capital Requirements
Expanding to a more robust operation, which might include leasing office space and hiring a small initial team, escalates the initial investment. For these larger IT staffing firm launches, total IT staffing business expenses can climb to $100,000 to $150,000. A significant portion of this higher outlay, often 30-50% of the total initial capital, is allocated to working capital. This working capital is vital for covering payroll, benefits, and other operational costs before consistent revenue streams are established, a critical factor in staffing business financing. Industry data from 2023 indicates that average startup capital for tech recruiting firms frequently falls within this bracket, highlighting the importance of sufficient liquid funds.
Startup Capital Allocation for Larger IT Staffing Firms
- Office Space Lease Deposit & Setup: $5,000 - $25,000
- Initial Staff Salaries (Recruiters, Admin): $10,000 - $30,000/month (for first 1-3 months)
- Technology Infrastructure (Computers, Networking): $5,000 - $15,000
- Working Capital (Payroll, Expenses): 30-50% of total investment
- Marketing & Business Development: $5,000 - $20,000
The Critical Role of Working Capital
Working capital is arguably the most significant and often underestimated component of the initial investment IT staffing. It serves as the financial buffer to manage the gap between paying contractors and receiving payments from clients. For an IT staffing agency startup, this means having enough funds to cover payroll for placed employees, taxes, and benefits for typically 30-60 days. For example, if you place ten IT professionals at an average weekly billing rate of $2,000 each, your weekly payroll outlay could be around $16,000 (assuming an average pay rate of $40/hour). Therefore, having several weeks of this covered upfront is essential. This aligns with insights on how to maximize profitability in IT staffing solutions, where efficient cash flow management is key.
How Much Capital Typically Needed Open It Staffing From Scratch?
Launching an IT staffing firm from the ground up generally requires an initial investment ranging from $50,000 to $200,000. This capital is essential to cover operational expenses for the first three to six months, bridging the gap until the business becomes profitable. Understanding these initial investment IT staffing needs is crucial for aspiring entrepreneurs in the tech talent acquisition space.
The cost to start an IT recruitment business involves several key components. Essential startup costs for an IT staffing agency include legal setup, which can range from $2,000 to $10,000. Software subscriptions, covering applicant tracking systems (ATS) and other operational tools, typically cost between $500 to $2,000 per month. Initial marketing efforts to build brand awareness and attract clients might require an upfront budget of $3,000 to $15,000.
Breakdown of Initial IT Staffing Agency Startup Costs
- Legal Setup: $2,000 - $10,000 for business registration, contracts, and compliance.
- Software Subscriptions: $500 - $2,000 per month for ATS, CRM, and payroll software.
- Marketing & Advertising: $3,000 - $15,000 initial budget for website development, online ads, and branding.
- Office Space (Optional): Variable costs for rent, utilities, and setup if a physical location is chosen. Many start virtually to minimize costs.
- Insurance: Costs for general liability, professional liability (E&O), and workers' compensation, varying by coverage and state.
- Technology Infrastructure: Costs for computers, reliable internet, and communication systems.
A significant portion of the initial capital, often 40-60%, is allocated to working capital. This is particularly vital for covering payroll for placed IT professionals. Since client payments typically take 30-60 days to be processed, having sufficient working capital ensures that payroll can be met consistently without interruption. Staffing business financing reports emphasize this need for robust cash flow management from day one.
Financial projections for a new IT staffing venture often highlight the necessity of covering 3-6 months of operational costs. This includes salaries for the initial staff in an IT staffing startup, such as recruiters and administrative personnel, alongside ongoing recruitment software subscription costs. Adequately funding these elements pushes the total estimated startup capital towards the higher end, ensuring sustained operation and the ability to handle payroll before client revenue stabilizes.
Can You Open IT Staffing With Minimal Startup Costs?
Yes, it is definitely possible to launch an IT staffing agency with surprisingly minimal startup costs. By operating remotely and strategically leveraging cloud-based solutions, entrepreneurs can significantly reduce the initial investment required. Many successful IT staffing ventures have been started with an estimated capital ranging from $15,000 to $30,000, focusing on essential functions rather than extensive infrastructure.
Minimizing Overhead by Forgoing Office Space
A primary strategy to keep IT staffing agency startup costs low involves eliminating the need for a physical office. Traditional office leases and associated overhead, which can easily range from $500 to $5,000 per month, are a major expense. By embracing a remote-first model, you bypass these costs entirely, allowing more capital to be directed towards talent acquisition and business development. This approach is a cornerstone for reducing the initial investment for a new IT staffing business.
Strategic Software Investment for IT Staffing
Controlling technology infrastructure costs is crucial when starting an IT staffing firm. Instead of opting for expensive, enterprise-level software suites from the outset, focus on essential, scalable tools. A basic Applicant Tracking System (ATS) specifically designed for IT staffing, which can cost as little as $50-$200 per month for small plans, coupled with a Customer Relationship Management (CRM) system, provides the necessary functionality. This targeted software spending helps manage the cost of software for an IT staffing agency effectively.
Streamlining Legal Setup for Lower Costs
The legal structure chosen for your IT staffing business can impact initial expenses. Opting for simpler legal structures such as a sole proprietorship or a Limited Liability Company (LLC) can keep legal fees for setting up an IT staffing company more manageable. Typically, these fees can range from $500 to $2,500. This is significantly less than the costs associated with more complex corporate structures, making it a cost-effective choice for many new IT recruitment businesses.
What Are The Essential Startup Costs For IT Staffing?
Launching an IT staffing firm involves several critical initial expenses to get operations running smoothly. These fundamental costs ensure the business is legally compliant, equipped with necessary tools, visible to potential clients and candidates, and can manage early financial demands. Understanding these key investment areas is crucial for building a solid foundation for a new IT recruitment business.
Legal Formation and Compliance Costs
The very first step in setting up an IT staffing agency involves legal and administrative setup. This includes registering your business entity, a process that can vary significantly by state but typically ranges from $100 to $500. Obtaining an Employer Identification Number (EIN) from the IRS is free. Furthermore, securing essential insurance, such as professional liability or errors & omissions (E&O) insurance, is vital to protect against potential claims. Premiums for this can start around $500 to $2,000 annually for a new, small firm, depending on coverage levels and risk assessment.
Technology Infrastructure Investment
A robust technology stack is indispensable for efficient IT talent acquisition and client management. Key software investments include an Applicant Tracking System (ATS) to manage candidate pipelines and a Customer Relationship Management (CRM) system to handle client interactions. The cost for these systems can range widely. Basic ATS/CRM subscriptions might start from $1,000 to $10,000 per year, escalating with advanced features, user licenses, and integration capabilities. Investing in reliable communication tools and secure data storage is also a necessary part of this initial technology infrastructure cost for IT staffing.
Initial Marketing and Sales Expenses
To attract both clients needing IT professionals and candidates seeking roles, an effective marketing and sales strategy is essential from day one. This involves developing a professional website, creating marketing collateral, and initiating outreach campaigns. Budgeting for initial digital marketing efforts, such as search engine optimization (SEO), pay-per-click (PPC) advertising, and social media marketing, is critical. A realistic initial marketing budget for a new IT recruitment business could fall between $2,000 and $7,500 for the first few months to build brand awareness and generate leads.
Working Capital for Payroll and Operations
One of the most significant initial financial requirements for an IT staffing startup is working capital. This is crucial because staffing firms typically pay their placed candidates weekly, while clients may have payment terms of 30 days or more. This gap necessitates sufficient funds to cover payroll, benefits, and other operational expenses before client invoices are collected. For a new IT staffing business, this often means needing between $10,000 and $50,000 or more to cover the first few months of operations and payroll cycles, ensuring smooth cash flow.
Breakdown of Initial IT Staffing Agency Costs
- Legal & Registration: $100 - $500 (Business formation, EIN)
- Insurance: $500 - $2,000 annually (Professional Liability/E&O)
- Software (ATS/CRM): $1,000 - $10,000 annually (Subscriptions)
- Marketing & Sales: $2,000 - $7,500 (Website, digital ads, outreach)
- Working Capital: $10,000 - $50,000+ (Covers initial payroll before client payments)
What Kind Of Software Costs Are Involved In Starting An It Staffing Agency?
When launching an IT staffing agency like TechBridge Solutions, software is a critical investment. The primary software categories include Applicant Tracking Systems (ATS), Customer Relationship Management (CRM) tools, and essential communication platforms. These systems are fundamental for managing candidates, clients, and daily operations efficiently. Choosing the right technology stack directly impacts your ability to scale and serve businesses needing specialized IT talent.
The cost of recruitment software, particularly an ATS, can be a significant factor in your initial IT staffing agency startup costs. Subscription fees vary widely. Basic ATS solutions might start around $50 per user per month. However, comprehensive, enterprise-level platforms designed for larger operations or specialized needs can easily exceed $500 per user per month. For a small to medium-sized agency, an ATS is a core tool, with annual expenses often falling between $600 and $6,000, depending on features and user count.
Essential Software Costs for IT Staffing
- Applicant Tracking System (ATS): Core for managing candidate pipelines. Annual costs typically range from $600 to $6,000 for small to medium agencies.
- Customer Relationship Management (CRM): For client management and sales tracking. Costs can vary, often starting around $20-$100 per user per month.
- Communication Platforms: Essential for internal and external communication. This includes tools like Slack or Microsoft Teams, often costing $5-$15 per user per month.
- Video Conferencing: For interviews and client meetings. Services like Zoom or Google Meet can cost between $15-$50 per user per month.
- Accounting Software: For managing finances, payroll, and invoicing. Expect costs of $20-$70 per month.
- Project Management Tools: To track tasks and projects, such as Asana or Trello. These often range from $10-$50 per month per user.
Beyond the core recruitment software, other essential applications contribute to the overall technology budget for an IT staffing firm. Accounting software is necessary for financial management, typically costing between $20 to $70 per month. Project management tools, vital for organizing recruitment workflows and client onboarding, can add another $10 to $50 per month per user. For seamless remote operations and effective team collaboration, video conferencing services are indispensable, with per-user costs often ranging from $15 to $50 per month.
When considering the cost to start an IT recruitment business, these software expenses are part of the broader initial investment. Properly budgeting for these tools ensures your IT staffing agency, like TechBridge Solutions, has the necessary infrastructure from day one to effectively source, vet, and place tech talent. Understanding these figures helps in creating a realistic financial projection for a new IT staffing business.
Legal And Licensing Fees For IT Staffing
Starting an IT staffing agency like TechBridge Solutions involves essential legal and licensing costs to ensure compliance. These fees typically range from $1,000 to $10,000, covering fundamental business setup requirements and professional advice.
Essential Permits and Licenses for IT Staffing
The specific permits and licenses needed for an IT staffing startup depend on your state and local jurisdiction. Generally, you will need a standard business license and an Employer Identification Number (EIN) from the IRS. Some states may also require specific licenses for staffing agencies. These essential permits and licenses can cost between $100 and $1,000.
Legal Fees for IT Staffing Company Setup
Setting up the legal framework for your IT staffing business is crucial. This includes drafting critical documents like client contracts, candidate agreements, and employment policies. Engaging legal counsel for these tasks can cost between $1,500 and $7,500, varying based on the complexity of your business structure and the legal expertise you seek.
Ensuring Legal Compliance in IT Staffing
Compliance with labor laws and industry-specific regulations is paramount for an IT staffing firm. This includes adhering to rules concerning background checks, data privacy (like GDPR or CCPA if applicable), and fair employment practices. Ongoing legal consultation is often necessary to navigate these complexities, adding to the initial investment required for launching your IT staffing business.
Key Legal and Licensing Expenses for IT Staffing Startups
- Business Registration Fees: $50 - $500
- Employer Identification Number (EIN): Free
- State/Local Business Licenses: $100 - $1,000
- Industry-Specific Staffing Licenses (if applicable): Varies by state
- Legal Consultation for Contracts & Policies: $1,500 - $7,500
- Compliance Advice (Labor Laws, Data Privacy): Variable, often hourly or retainer
Office Space Costs For IT Staffing
When starting an IT staffing agency, the decision to include physical office space in your initial investment IT staffing budget significantly impacts overall startup capital. For a business like TechBridge Solutions, which focuses on rapid tech talent acquisition, physical space is not always a mandatory expense. Many new IT staffing firms opt for fully remote operations to minimize recruitment agency overhead and reduce the cost to start IT recruitment. This approach allows founders to focus capital on essential services and technology rather than fixed real estate costs.
For IT staffing agency startup costs, if a physical office is deemed necessary, expect a range of expenses. The monthly cost for office space can vary widely, typically from $0 for fully remote setups to $5,000 or more per month, depending heavily on the chosen location and the size of the space required. This figure doesn't include the initial outlay.
Initial Office Space Investment For IT Staffing
- Security Deposits: Often require 1-3 months' rent upfront, which can be a substantial initial cash outflow for a new IT staffing firm.
- Build-Out Costs: If the space needs customization, expect costs ranging from $10 to $50 per square foot. This is a critical factor in the breakdown of initial costs for an IT staffing agency.
- Furniture and Equipment: Setting up a functional office requires furniture, computers, and other essential equipment, typically costing between $5,000 and $20,000. This is a significant part of the initial investment IT staffing.
For IT staffing businesses looking for flexibility, co-working spaces present a viable alternative to traditional leases. These spaces offer a professional environment without the long-term commitment and high upfront costs associated with securing a dedicated office. Monthly fees for co-working spaces generally range from $200 to $800 per person. This option can significantly reduce the overall IT staffing business expenses for startups aiming to keep their launch capital lean, making it a popular choice for many new tech recruiting firms.
Technology Infrastructure Costs For IT Staffing
Launching an IT staffing agency like TechBridge Solutions requires a solid technological foundation. The initial investment in technology infrastructure for an IT staffing business typically ranges from $2,000 to $15,000. This covers the essential hardware, software, and network setup needed to operate efficiently and connect with clients and candidates.
This critical startup capital is allocated towards acquiring the necessary digital tools and physical equipment. For a new IT staffing firm, these purchases are fundamental to establishing operations and ensuring smooth communication and data management.
Essential IT Infrastructure Components
- Computers and Monitors: Acquiring reliable workstations for recruiters and administrative staff is a primary expense. The initial hardware cost per workstation can fall between $800 to $1,500.
- Network Equipment: Setting up a secure and efficient network involves costs for routers, switches, and cabling. This segment can add $1,000 to $5,000 to the initial outlay.
- Internet Service: High-speed, reliable internet is non-negotiable for an IT staffing business, facilitating video interviews, cloud access, and constant communication. Monthly costs for robust connectivity can range from $70 to $200.
- Software Subscriptions: Beyond hardware, budget for essential software like Customer Relationship Management (CRM) systems, Applicant Tracking Systems (ATS), and communication tools. These are crucial for managing candidate pipelines and client interactions.
Beyond the initial hardware purchases, cybersecurity measures are paramount. Protecting sensitive client and candidate data is vital for maintaining trust and compliance. Investing in firewalls, antivirus software, and secure data storage solutions can represent a significant portion of the infrastructure budget, often included in the $1,000-$5,000 for network equipment and security. This ensures the integrity of operations for your IT staffing agency startup.
The ongoing operational costs for an IT staffing business include maintaining this infrastructure. Reliable internet connectivity, essential for remote work capabilities and conducting video interviews, contributes to monthly expenses, typically between $70-$200. These recurring costs are vital to keep the business connected and competitive in the tech talent acquisition space.
Marketing And Advertising Budget For It Staffing
Launching an IT staffing agency like TechBridge Solutions requires a focused marketing and advertising budget to attract both clients and tech professionals. For the initial launch phase, a new IT recruitment business should allocate between $3,000 and $15,000. This investment is crucial for establishing an initial presence and generating early leads in the competitive tech talent acquisition market.
This budget segment covers essential elements for building brand visibility. Key expenditures include professional website development, which can range from $1,000 to $5,000, ensuring a strong online foundation. It also encompasses costs for search engine optimization (SEO) to improve discoverability, targeted social media marketing campaigns, and potentially initial paid advertising on platforms frequented by IT professionals and hiring managers, such as LinkedIn or Indeed.com.
Key Marketing & Advertising Allocations for IT Staffing Startups
- Website Development: $1,000 - $5,000
- Digital Marketing (SEO, Social Media, Paid Ads): Covering initial campaigns and ongoing efforts.
- Networking & Events: Costs for attending industry conferences or local meetups.
Developing a robust brand identity and maintaining a professional online presence are paramount for successful tech talent acquisition. Beyond the initial launch, ongoing digital marketing efforts are estimated to cost between $500 and $2,000 per month. These consistent activities help sustain lead generation and brand recognition, which are vital for the long-term growth of an IT staffing firm.
Furthermore, participation in networking events and industry conferences is a valuable, albeit variable, component of the marketing strategy. Costs per event can range from $100 to $1,000, covering attendance fees, travel, and promotional materials. These opportunities are essential for building initial relationships with potential clients and candidates, thereby expanding the recruitment pipelines for businesses seeking IT talent.
Insurance Costs For IT Staffing
Securing the right insurance is a critical component of the IT staffing agency startup costs. For a typical IT staffing firm like TechBridge Solutions, these costs can range significantly, often falling between $1,500 and $5,000 annually. This budget covers essential protections designed to safeguard the business against various liabilities inherent in the recruitment industry, especially when dealing with specialized tech roles.
Understanding the specific types of insurance and their associated costs is vital for a realistic human resources startup budget. Essential policies for an IT staffing business include general liability, professional liability (also known as Errors & Omissions or E&O), and workers' compensation. General liability typically costs between $500 to $1,500 per year, protecting against claims of property damage or bodily injury. Workers' compensation costs are variable, directly depending on the company's payroll size and the state's regulations, as it covers employee injuries sustained on the job.
Key Insurance Policies and Their Costs for IT Staffing
- General Liability Insurance: Protects against third-party claims of bodily injury or property damage. Estimated cost: $500-$1,500 annually.
- Professional Liability (Errors & Omissions/E&O) Insurance: Covers claims related to negligence, errors, or omissions in the professional services provided, such as incorrect candidate placements. Estimated cost: $700-$2,500 annually. This is particularly important for IT staffing firms that place professionals in critical roles.
- Workers' Compensation Insurance: Covers medical expenses and lost wages for employees injured on the job. Cost is variable and based on payroll.
- Cyber Liability Insurance: Protects against data breaches and cyberattacks, crucial given the sensitive candidate and client data handled. Estimated cost: $500-$1,500 annually, adding to the overall recruitment agency overhead.
For an IT staffing firm, professional liability or Errors & Omissions (E&O) insurance is particularly crucial. This policy protects against claims of negligence, misrepresentation, or errors that might arise from the vetting and placement of IT professionals. For instance, if a placed candidate fails to perform due to a perceived oversight in the screening process, E&O insurance can cover the legal defense and potential damages, making it a cornerstone of startup capital for a tech recruiting firm.
In today's digital landscape, cyber liability insurance is also becoming a non-negotiable expense for IT staffing businesses. Firms like TechBridge Solutions handle sensitive client and candidate data, including personal information and proprietary company details. A data breach could lead to significant financial losses and reputational damage. This specialized coverage can add an estimated $500 to $1,500 annually to the IT staffing business expenses, ensuring the business is protected against modern cyber threats.
Working Capital For IT Staffing
A crucial element when launching an IT staffing firm like TechBridge Solutions is securing sufficient working capital. This is often one of the most significant startup requirements, typically ranging from $10,000 to $100,000. This capital is essential for covering immediate payroll obligations and other operational expenses during the initial phases of business.
The primary function of this working capital is to bridge the gap between paying your placed IT professionals and receiving payments from your clients. IT staffing firms commonly pay candidates on a weekly or bi-weekly basis. However, client payments can often take 30 to 60 days or even longer. This cash flow lag is a major hurdle for new recruitment agencies.
Having a robust working capital fund directly addresses the biggest financial challenges faced by new IT staffing businesses. It specifically helps mitigate the cash flow gaps that frequently emerge in the early months of operation. This financial cushion ensures the business remains solvent and can meet its obligations without interruption as it builds its client base and revenue streams.
Industry benchmarks and best practices suggest maintaining a reserve of 2 to 3 months of projected payroll and operational expenses as working capital. This proactive approach allows the business, such as TechBridge Solutions, to sustain its operations and support its growth through the initial, often lean, period, ensuring stability and the ability to fulfill candidate payroll reliably.
Key Working Capital Needs for IT Staffing Startups
- Payroll Coverage: Ensuring timely payment to IT professionals, often weekly or bi-weekly, before client invoices are settled.
- Operational Expenses: Covering costs such as rent, utilities, software subscriptions, and marketing.
- Cash Flow Management: Mitigating the typical 30-60+ day payment cycles from clients, which can create significant cash flow gaps.
- Growth Sustainment: Providing a buffer to cover expenses during the initial growth phase and client acquisition period.
Salaries For Initial Staff In IT Staffing
The cost of initial staff in an IT staffing startup can vary significantly. For founders operating solo, this cost might be $0. However, if you plan to hire recruiters and administrative support from the outset, monthly salaries can quickly climb to $20,000+. This decision impacts your immediate human resources startup budget considerably.
When launching an IT staffing agency, hiring staff immediately isn't always necessary. Many founders choose to begin as a solo operation to minimize upfront expenses and manage their human resources startup budget more conservatively. This approach allows for testing the market and building a client base before expanding the team.
If you do decide to bring on staff early, consider the salary ranges for key roles. A junior recruiter might earn between $40,000 and $60,000 annually, often plus commission. An experienced recruiter, however, could command a base salary from $70,000 to over $100,000 per year. These figures are crucial for estimating your initial investment IT staffing.
Understanding Total Compensation Costs for IT Recruiters
- Base Salary: The fixed amount paid to an employee.
- Commissions: Variable pay, often tied to successful placements, especially for recruiters.
- Employer Taxes: This includes FICA taxes (Social Security and Medicare), typically 7.65% of gross wages.
- Benefits: Costs for health insurance, retirement plan contributions (like a 401k match), and other employee perks.
- Bonuses: Additional payments for achieving specific recruitment targets or retention.
Factoring in the additional costs beyond base salary is vital for accurate IT staffing business expenses. Employer taxes, benefits such as health insurance and 401k matching, and recruitment bonuses can add 20-30% on top of an employee's base pay. Understanding these total compensation costs is essential for correctly estimating the financial requirements for a new IT staffing business and for effective business plan IT staffing.