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How Travel Nursing Companies Calculate Pay Rates

It’s becoming increasingly popular for Travel Nursing companies to advertise their pay rates on job postings. In fact, travel nursing job boards that publish pay quotes are everywhere these days. We have one on BluePipes!

It’s understandable for travel nurses to be ecstatic about this trend. However, what travel nurses don’t know about these pay quotes may come back to haunt them. So, in this article, we discuss how travel nursing companies calculate their pay rates. We also discuss everything you need to know about job advertisements with pay rates so you can navigate them with confidence.

The Basics of Travel Nursing Pay Packages

First, let’s review the basics of Travel Nursing Pay packages. All pay packages begin with a bill rate. The bill rate is the hourly rate the agency can charge the hospital for the traveler’s time. You can review our article on the different types of bill rates for more detail on this topic.

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Next, each contract has time variables. For example, the standard travel nursing contract is 3 12 hour shifts per week for 13 weeks. Therefore, we anticipate the travel nurse will work 468 hours for the entire contract.

If we multiply the bill rate by the number of hours in the contract, then we get the total dollar amount that the agency anticipates they will bill the hospital for the entire contract. You can review our article on how time impacts pay packages for more detail on this topic.

Next, the company takes a percentage to cover their operating expenses. We refer to this as the “gross profit margin”. Most agencies operate with gross profit margins between 20% and 27%. You can review our article on company profit margins for more detail on this topic.

After we subtract the gross profit, the rest of the bill rate goes to covering the costs directly associated with the traveler and their pay package. It’s important to note that many of these costs are hidden to the traveler.

For example, the travel nurse will not see the employer’s portion of payroll taxes, the cost of benefits, liability insurance and other variables.  Therefore, the traveler might get the impression that the agency’s gross profit margin is much higher than it actually is if the traveler ever sees the bill rate and compares it to their pay package.

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With that in mind, it’s important to understand that travel nursing companies must consider a litany of variables in order to calculate an accurate travel nursing pay package. Here is a list of some those variables:

  1. Bill rate
  2. Overtime bill rate
  3. Contracted regular hours
  4. Contracted overtime hours (common in states like California with overtime after 8 hours in a day).
  5. Taxable hourly pay rate.
  6. Taxable overtime rate
  7. Company housing or housing stipend.
  8. Meals and Incidental Expenditure stipend.
  9. GSA Rates
  10. Travel stipend.
  11. Medical benefits.
  12. Non-billable orientation hours.
  13. Credentialing costs (medical exams, clinical exams, certifications, etc).
  14. Employer portion of the Federal Insurance Contributions Act tax (FICA).
  15. State Disability, Workers Comp and Unemployment insurance.
  16. Liability insurance for the traveler (required by hospitals).
  17. VMS fees.
  18. Cost of capital for loans to cover payroll.

Moreover, many of these variables change from contract to contract. As a result, calculating a travel nursing pay package is quite complex.

Obviously, recruiters aren’t sitting around all day churning out pay quotes with pencils and calculators. So, how are they doing it?

The Two Common Methods for Calculating Travel Nursing Pay Packages

Of course, people developed software to help agencies manage their pay calculations. The “Rate Sheet” or “Rate Calculator” is one of the original and most common software solutions.

The Rate-sheet Method

Typically, Rate Sheets are one component of a larger software system that helps agencies manage their jobs, clients, clinicians, credentialing and more. Rate Sheets allow the user to create a pay package for an individual job.

The Rate Sheet pulls data in from other components of the software.  So, when the user opens a new Rate Sheet for a job, the Rate Sheet already includes the bill rates, GSA values, state payroll taxes and much more.

The user then tinkers with the pay rate, reimbursements and other compensation variables. Meanwhile, the software calculates the gross profit margin as the user makes changes. This is how the user knows exactly how much they are able to pay.

Rate Sheets are great. However, they require a lot of manual human input. Therefore, Rate Sheets are not capable of doing the work necessary for the agency to calculate pay rates for all of their jobs and display the jobs with pay quotes on a job board.

Automated Pay Quotes Travel Nursing Jobs

If you read our article on how travel nursing job boards work, then you know that agencies and job boards almost always use software to automate their job postings. This is especially true when agencies are posting hundreds or thousands of jobs to a job board.

If the agency wants to display their pay rates on all those jobs which are constantly updating, then they need software to make that happen. In general, two common methods exist to accomplish this.

Travel Nursing Agency Calculates Pay on Their End

First, some agencies use software that automatically calculates the pay quote for each job. Then, the software inserts the pay quote for each job into the job data it sends to job boards. When the job board receives the job data, the job board is able to identify the pay for each job and display it in the job posting.

Travel nursing Job Board Calculates Pay on Their End

Second, the job board can have software that calculates pay for each job in the agency’s job-feed. In order for this to work, the agency’s job-feed must include some data points for each job which allow the job board’s software to run a calculation to get the pay quote.

What Travel Nurses Must Know About Advertised Pay Quotes

So, now that we know how agencies create pay quotes, we can discuss everything travel nurses must know about the pay quotes they see advertised in all the various locations that agencies advertise them.

What’s Included in Travel Nursing Pay Quotes on Job Advertisements?

First, you will not know for sure what benefits the agency is including in the pay quotes on their job advertisements. This is extremely important for several reasons.

You see, many agencies try to advertise the maximum amount they can pay for a contract. In this case, the agency does not factor in the cost of things like medical benefits when they calculate the pay quotes they advertise.

Therefore, if you need medical benefits, or any other benefit for that matter, then the agency will reduce the pay to cover the costs. Meanwhile, some agencies try to include the cost of common benefits, like medical benefits and travel reimbursements, in the pay quotes they advertise.

This means that you can’t really compare the pay quotes you see on these job advertisements without actually speaking with the agencies. Despite this, some travel nursing job boards will show you a single job posting along with pay quotes from multiple companies for the same job. This is largely useless. In fact, it’s counterproductive and disingenuous.

Automated Pay Quotes are Estimated Pay Quotes

As we discussed above, there are many different variables that go into calculating a perfectly accurate pay quote. Therefore, the more variables that the software can account for, the more accurate the pay calculation will be.

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However, the automated pay quotes will almost always rely on at least some blanket rules in order to perform the pay calculations en masse. As a result, the pay quotes you see aren’t perfectly accurate in all cases. That’s why we display all the pay quotes on BluePipes as “estimated gross pay”.

Potential for Agency to Adjust

Therefore, travel nurses must know that agencies might need to adjust these pay quotes. However, the agency will only know this after they manually run a more detailed calculation. Unfortunately, that will only come after you apply to the job.

Of course, the agency will definitely adjust the pay down if they need to. However, will they adjust it up if they can? After all, you’ve already let the agency know that you’re interested in the job and the pay by virtue of applying for the job.

Can travel nurses negotiate for a better pay package?

This all means that travel nurses should still negotiate when they apply for jobs that display pay quotes. Please do not assume that the pay quote you see on any job advertisement is the best pay that the company can offer for that job. You must negotiate.

First, note that you’re already in a weaker negotiating position. That’s because you’ve essentially revealed that you are interested in the pay because you applied to the job.

Second, you should tell recruiters that you know that many of these pay quotes are estimates. You can request that they check to see if they can offer more money for the particular job you’re looking at.

Now, some travel nursing companies will stand by their pay quotes in all cases. Therefore, they may not adjust the pay as you request. Or, the pay may actually be accurate already.

In any case, there is no harm in asking. It’s important to treat the process as a negotiation.

You can download our free eBook on how to negotiate travel nursing pay to discover everything you need to know about negotiating. Even better, you can use our powerful travel nursing pay calculator to evaluate pay like a pro.

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Pay Quotes on the Different Types of Travel Nursing Job Boards

There are many different kinds of job boards. We defined most of them in another article where we discuss their differences and how they work. We highly recommend that you read that article as it will help you better understand this article.

In general, it doesn’t matter what type of job board you see pay quotes on; you should always negotiate. However, there are nuances that travel nurses should be aware of.

Travel Nursing Pay Quotes on Facebook

Many people consider Facebooks Groups for travel nursing jobs as a form of travel nursing job board. We disagree. Facebook provides no mechanism for you to apply to these jobs in a meaningful way. Moreover, Facebook’s search functionality is absolutely horrible. Also, Facebook doesn’t take any measures to keep the jobs updated.

Free eBook: How To Negotiate Travel Nursing Pay

However, you will certainly find jobs with pay quotes in these Facebook groups. We’ve written an entire article on how you can evaluate travel nursing pay quotes on Facebook. These pay quotes are great for two reasons.

First, they’re typically highly detailed. For example, the quote may include the travel stipend, taxable and non-taxable breakdown, benefits package and much more.

Second, these pay quotes should be reliable. That’s because the recruiter most likely calculated the pay for that specific job using some type of manual process.

Travel Nursing Company Job Boards with Pay

If a company publishes pay quotes on their own job board, then they are clearly using their own software to calculate those quotes. However, the same rules still apply. You must negotiate.

General Job Boards with Travel Nursing Pay

When you see travel nursing pay quotes on general job boards like Indeed, ZipRecruiter and others, you need to be alert. That’s because these job boards sometimes add their own pay estimates to these jobs. These estimates are wildly inaccurate.

You can identify them, but you have to look closely. They typically say something like, “Pay: $X – $X Estimate based on similar jobs.” Of course, they print that disclaimer in very tiny, muted text.

Niche Job Boards with Travel Nursing Pay

Niche travel nursing job boards like BluePipes have pay quotes of all types. That’s why we clearly state that the pay quotes are estimates on our job board.

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Unfortunately, you will find some niche job boards that do not clearly state that their pay quotes are estimates. Perhaps even worse, some of these job boards display their pay data as being accurate in other ways.

For example, they might have a separate page for the travel nursing jobs in each state. Then, they provide some pay related information and graphs which describe the pay in that state. The problem is that the information is based on the inaccurate pay data they’ve collected from the jobs that agencies post in their site.

How Travel Nurses Can Get Accurate Pay Information

As a result, much of the most prominent information available to travel nurses regarding travel nursing pay is inflated. Therefore, travel nurses must do two things in order to obtain truly accurate pay information.

First, they must obtain all compensation details from the agencies they work with in order to conduct apples-to-apples comparisons. Second, they must factor in their own costs in order to make those comparisons truly accurate.

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This is a complex process. But we’ve got you covered. We created the industry’s most powerful travel nursing pay calculator to provide travel nurses with free access to the same powerful software that agencies use to calculate their own pay.

Our calculator helps you recognize and record every detail you’ll need to accurately evaluate and compare travel nursing pay packages. It even has a cost calculator. There’s no better way to evaluate travel nursing pay!

Do travel nursing recruiters always know the bill rate?

Despite all that we’ve covered here, we still have a few unanswered questions. First, many travel nurses wonder if their recruiters know the bill rates.

No, recruiters do not always know the bill rate for any given assignment. If a company uses the automated-rate method, then it’s highly likely their recruiters never see the bill rates. There is certainly no need for them to see the rates. Everything is already calculated. All the recruiter ever sees is the end result.

Why Don’t Travel Nursing Agencies Divulge the Bill Rate?

Many travel nurses also wonder why agencies don’t just divulge the bill rates. We covered the many reasons that travel nursing companies do not typically divulge bill rates in another article. Please check it out for the full details.

Why does it take so long for travel nursing recruiters to provide a pay package?

Many travel nurses have encountered the following scenario: The travel nurse calls their recruiter to discuss potential jobs. The recruiter provides the basic details such as the location, shift, specialty and start date. When the travel nurse asks for the pay packages, the recruiter places the traveler on a long hold or says they will call the traveler back as soon as they have the rates figured out.

From the outside, it might seem as though something shady is going on. Why can’t they just tell you what the jobs pay?

In most cases, the recruiter is working with the rate-sheet method which can take some time to complete. For example, if the agency has not entered some possible housing options for the area in question, then the recruiter may need to do some research. Or, if the agency hasn’t entered the payroll related costs for the state in question, then the recruiter may have to look those up and enter them manually.

By contrast, recruiters working with companies that employ the automated-rate method will typically be able to rattle off pay rates with ease.

Why don’t all travel nursing companies post pay rates for their jobs?

We get this question all the time. Visitors to our job board see that some companies have pay on their jobs and others do not. So, they inquire as to why.

There are many legitimate reasons that travel nursing companies do not publish their pay quotes on job advertisements. None of them involve the companies ripping people off.

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For example, many companies lack the software necessary to make it happen. Again, these are staffing companies, not software companies.

Many companies feel that their honesty and integrity will make them look bad relative to their competitors. As we mentioned above, some companies publish the highest pay rates possible. Then, they walk back the rates when a candidate requests things like medical benefits or travel reimbursements.

Some companies feel this practice is disingenuous. Therefore, they want to publish rates that reflect the value of all the most common benefits. However, if they do this, then their pay rates will appear lower than those of their competitors who don’t do this.

Other companies simply do not want to deal with “estimated pay quotes”. They know they will need to adjust the pay for many of these jobs simply because the software that generated the pay quote got it wrong. They feel this will make them look bad.

Other companies are concerned that these pay quotes might get them in legal trouble. They worry that the way the pay quotes are displayed may run afoul of wage recharacterization rules. Similarly, they worry that the way the pay quotes are displayed may run afoul of state and federal overtime regulations.

Both of these concerns are legitimate. You can learn more about these issues by reading the articles we linked to above.

What Does This All Mean For Travel Nurses?

So, what does all this mean for travel nurses? First, you should view the pay quotes on travel nursing job advertisements as approximations as opposed to definitive offers.

Therefore, if a pay quote is a little less than you’d like, then it might still be worth your while to inquire about the job. Perhaps the company can offer a little more.

Discover why travel nurses are calling us their “secret weapon”.

Second, you must always negotiate your pay as a travel nurse. As we mentioned above, you can review this article with negotiating tips for travel nurses and you can download our free eBook on the topic by joining BluePipes here.

Third, it’s important to remember that companies aren’t bad just because they don’t publish pay quotes on their job advertisements. In fact, some of the most highly rated companies in the industry rarely publish pay quotes on their job advertisements. These companies include Axis Medical Staffing, Medical Solutions and FlexCare among many others. We highly recommend working these companies!

Finally, travel nurses should still thoroughly evaluate all compensation packages. Pay quotes are great. However, you can still get caught off guard by unforeseen costs or penalties hidden in the fine print. To help with this, we encourage you to utilize our free travel nursing pay calculator!

The post How Travel Nursing Companies Calculate Pay Rates appeared first on BluePipes Blog.

This post first appeared on Home » BluePipes, please read the originial post: here

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How Travel Nursing Companies Calculate Pay Rates


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