In this episode, we’re going to discuss 7 pitfalls to avoid when discussing and evaluating travel nursing pay packages. These are issues that can either cause confusion, open you up for sales gimmicks, cause frustration, or weaken your negotiating power. So let’s get right to it because we have a lot to cover.
Pitfall # 1: Asking “What’s the rate?” When Discussing Travel Nursing Pay
- Remember, there are many variables in a travel nursing pay package, so this is an ambiguous question. Ambiguous question equals ambiguous answer.
- It will cause frustration for both you and the recruiter.
- Instead, ask highly detailed questions.
Pitfall #2: Focusing on the Base Rate
- It’s common to hear travelers say things like “I don’t work for $20 per hour!!”
- That’s right, you don’t and there is no travel contract that pays that low. There are tons of other variables.
- If you do receive a rate that’s $20 per hour with everything included except for housing, then yes, it’s way too low.
- The bigger problem is that wise recruiters can use a fixation on the base rate to negotiate a favorable deal for themselves.
Pitfall #3: Not Considering The Number of Contracted Hours
- More contracted hours means more total revenue.
- Remember, the best way to evaluate pay packages is break everything down to an hourly value.
- And more hours makes things worth less per hour all else being equal.
- For example, a $250 weekly stipend is worth $6.94 on a 36 hour contract but only $5.20 on a 48 hour contract.
- If the bill rate is the same for both contracts, the agency is making more money if everything else is equal. So you’d want to make sure that some other pay variable was increased.
- And because all the fixed costs are spread over more billable hours, you should actually expect a slightly higher pay rate when working contracts with more hours.
Pitfall #4: Neglecting To Factor In Your Startup Costs For The Contract!
- Each assignment has potentially different startup costs involved with it. These can include: License and Certification costs, Housing costs if you secure your own housing, medical record costs, travel costs, and potential storage costs.
Pitfall #5: Arbitrary Tax Percentages When Calculating Travel Nursing Net Pay
- Net pay figures are estimates when recruiters put them out there.
- Tax liabilities vary from person to person and state to state.
- These differences can throw estimates off by as much as $100 per week.
- Rather than rely on some arbitrary figure, use a paycheck calculator like the one at paycheck city. We’ll link in the show notes. It lets you enter the state and your w4 details so you can get a more accurate estimate.
The next two pitfalls are typically made after you have a contract…you’re already on the job.
Pitfall #6: Making Inaccurate Comparisons With Other Travel Nurses, PRN and Seasonal
- Comparing travel pay to the pay of people who work directly with the facility…like seasonal workers or PRN. Seasonal workers typically make more; the middle man is cut out. This is common in states like Florida and Arizona where seasonal census spike are routine. PRN nurses certainly make more in California. The hiring process is different. It’s very difficult to get on. Shifts are not guaranteed and they don’t get any benefits. Pay rates for PRN in California can be higher than the bill rates for travel nursing, so the pay gap is humongous.
- Not comparing apples to apples with other travelers. The common pitfall involves benefits and travel stipends. There may be VMS fees as well. Or one agency may have higher bill rates than the other.
Pitfall #7: Making Incorrect Estimates Because You Found Out The Bill Rate
- This one is a bit difficult to explain, so let’s look at an example. A travel nurse has a pay package that worth a total of $45 per hour, then they find out that the bill rate is $65 per hour. They automatically assume that the agency is making $20 per hour which is 31%. This isn’t true though.
- First: a profit margin is: A financial metric used to assess a firm’s financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. Gross profit margin serves as the source for paying additional expenses and future savings.
- I hate to say this, but the “goods being sold” here are travelers. So all costs that are attributed to them must be accounted for in a profit margin.
- Let’s use a standard 20% margin. On a $65 bill rate that $13. The remaining $7 in this case is going to pay for a host of costs attributable to the traveler: liability coverage, the employer’s portion of FICA (Federal Insurance Contribution Act Tax, medicare and social security) on the taxable income, non-billable orientation, compliance and credentialing costs, etc…