Temp-to-hire conversion fees for electricians, explained

A temp-to-hire conversion fee is what a staffing agency charges when you put its worker on your own payroll. It's usually a percent of his first-year pay that drops as billed hours pile up. In the published staffing terms we read, it starts at 20 to 25% of annual salary. On Robert Half's scales it hits zero after 640 or 960 billed hours, depending on the division.

On a $50-an-hour journeyman, 25% is $26,000. Wait out the scale and it's $0. Here's how the fee works and when waiting is the cheaper move.

01How a conversion fee is figured

The fee is a percent of his annual starting salary, and the percent usually steps down with the hours the agency has billed you.

Annual salary on an hourly hand is normally his rate times 2,080 hours. Robert Half's pricing on a public cooperative contract uses exactly that multiplier for its direct-hire fees. So a $50 journeyman is a $104,000 salary for fee purposes, before any overtime.

Here's what real published terms say:

None of these are electrical staffing firms. They're the published terms we could open and read. Electrical agencies use the same building blocks. Ask yours for its schedule in writing.

For context, Robert Walters' permanent placement terms set a default fee of 30% of the salary package when no other rate is agreed. Every temp-to-hire fee above starts under that, and it shrinks while the agency collects markup on every hour.

02A worked example on a $50 journeyman

On a $104,000 salary, the fee runs from $26,000 down to nothing, depending on when you hire him.

Example only, using the Robert Half office scale above:

Check the scale against your schedule. At 40-hour weeks, 640 hours is 16 weeks. At 6-10s (60 hours a week), it's under 11 weeks, if overtime hours count toward "hours billed." Get that answered in writing. Some terms count consecutive hours only, so a week off can matter.

03Buy him out now, or wait it out?

On a sliding scale, waiting is usually cheaper than buying out early, as long as the agency doesn't move him first.

Example only: the hand makes $50, the agency marks him up 40%, so you pay $70 an hour. Of the $20 markup, about $6.12 is payroll tax and comp-type cost you'd pay anyway if he were yours. That's 12.23% of wages, our math from BLS employer cost data for private construction (June 2026): $4.42 ÷ $36.13. So waiting costs you about $13.88 an hour more than having him on your payroll.

Say you're at hour 200 and want him:

• Buy out now: 20% of $104,000 = $20,800.
• Wait to hour 641: 441 more hours × $13.88 = about $6,121.
• Difference: waiting saves about $14,679.

Small steps add up too. At hour 300, waiting 21 more hours to cross into the 15% band costs about $291 and saves $5,200.

The catch is that while you wait, he's still the agency's employee. One national electrical contractor told us their best agency hands "keep getting called to other jobs for more money." If losing him would cost you more than the fee, buy him out. For the full side-by-side of renting vs hiring, see staffing agency vs direct hire: the real cost.

04The 12-month clause: non-solicit and buy-back terms

Most conversion clauses reach well past the job, and 12 months was the window in every set of terms we read.

What those clauses cover:

• Robert Half: the fee applies if you hire the person "within twelve months after the last day of the assignment," whether full-time, temporary "(including temporary assignments through another agency)" or consulting. It also applies if one of your customers or a related company hires him because of you.
• Reliable Staffing: the fee applies if you use the worker "as its direct employee, as an independent contractor, or through any person or firm other than" the agency within 12 months after the assignment starts. Hire without telling them and there's a 10% violation fee on top.
• Robert Walters (permanent placement terms): if you hire a candidate within 12 months of its last communication with you about him, the fee is due.

Read those lines closely. You can't get around them by bringing him on as a 1099 or running him through a cheaper agency. Both are named.

And the clock may run from the start of the assignment or from the end. On a 6-month job, "12 months after the last day" means 18 months from the day he showed up.

This is not legal advice. Talk to your lawyer before you sign, and before you hire anyone around a clause like this.

05What to negotiate before the first man shows up

Every one of these is easier to get before you sign than after you want the hand.

1. A written fee schedule by hours. Percent, the hour bands, and the hour it hits zero.
2. Overtime hours count. On 6-10s, that alone can cut weeks off the scale.
3. A fee based on straight-time pay only. His rate times 2,080, not his projected overtime.
4. A dollar cap. For example, no fee above a set amount per hand, however you define salary.
5. A shorter tail. Six months instead of 12, counted from the end of his last assignment with you, not some later date.
6. No fee if they pull him. If the agency moves him to another client or ends the assignment early, the conversion fee is waived.
7. Credit for markup paid. The fee drops by some share of the markup you've already paid on him.
8. No fee on hands you already knew. Anyone who worked for you or applied to you directly before the agency sent him is excluded. List names if you have to.
9. A simple notice step. One email to convert, so you never trip a violation fee by accident.

Put all of it in the agreement, next to the other terms on your electrical staffing agreement checklist. And if you want to know what the markup itself is costing you while the fee burns off, see what agencies mark up an electrician.

There's also a version of hiring with no conversion fee at all, where someone finds the hand and you hire him straight onto your payroll. Staffing agency vs recruiter vs headhunter explains how each one gets paid.

If you'd rather hire licensed journeymen direct from day one, with no buyout, apply here and we'll see if we can put 5 licensed electricians in front of you in 14 days.

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