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Emergency HR Coverage - What Does It Cost?

Honest Pricing Guide

 

When your HR director quits unexpectedly, the first question after “what do we do?” is usually “what’s this going to cost?”

 

Here’s the honest answer: Emergency HR coverage costs more than planned transitions, but often less than the alternatives of rushing a bad hire or operating without coverage.

 

Let me break down the real numbers so you can make informed decisions under pressure.

The Cost Reality: What You're Actually Paying For

Emergency Provider Premium: 25-40% Higher Initially

Quality HR providers charge premium rates for emergency response because they’re:

  • Dropping other priorities to focus on your crisis
  • Deploying resources immediately vs. standard timelines
  • Taking on a higher risk with less preparation time

Typical emergency rates:

  • Emergency consultation: $200-350/hour (same-day response)
  • Fractional HR Director: $150-250/hour for emergency placement
  • Full interim coverage: $8,000-15,000/month, depending on company size and complexity

Our broker approach: We work with providers who offer fair emergency pricing, not gouging during a crisis.

MBS Fee Structure: Transparent and Simple

As brokers, our fees are straightforward:

  • Emergency consultation: No charge for initial assessment
  • Provider placement: One-time fee of 10-15% of first year contract value
  • Ongoing relationship management: Included in placement fee

Example: If we place you with a fractional HR provider at $10,000/month ($120,000 annually), our fee is $12,000- $ 18,000 one-time. That provider delivers your ongoing HR coverage, and we manage the relationship to ensure quality.

Cost Comparison: Your Real Options

Option 1: Rush-Hire Permanent Replacement

Direct costs:

  • Recruiter fees: 20-30% of salary ($35,000-60,000 for $175,000 position)
  • Salary: $120,000-175,000 annually (based on Bureau of Labor Statistics occupational data for HR Managers)
  • Benefits: $30,000-44,000 annually
  • Total Year 1: $185,000-279,000

Hidden costs:

  • SHRM talent acquisition research shows the average cost per hire ranges from $4,000-$7,000, with rushed hiring decisions made under pressure resulting in significantly higher failure rates
  • 6-12 weeks with limited coverage while searching
  • Training time reduces effectiveness for 3-6 months

Success rate: Industry research consistently shows quality of hire decreases substantially when hiring decisions are made under time pressure

Option 2: Quality Fractional HR Coverage

Direct costs:

  • Emergency placement: 25-40% premium initially
  • Standard fractional: $8,000-15,000/month after emergency period
  • MBS placement fee: $12,000-24,000 (one-time)
  • Total Year 1: $108,000-204,000

Additional value:

  • Multiple specialists vs. one generalist
  • Immediate deployment (3-5 days typical)
  • Flexibility to scale up/down as needed
  • No severance costs if it doesn’t work

Success rate: 90%+ satisfaction in our provider network

Option 3: Internal Team Takeover

Apparent costs:

  • No new hiring expenses (seems free!)

Real costs:

  • Executive time: 10-30 hours/week at $100-200/hour
  • Compliance violations: Department of Labor Wage and Hour Division data shows employers paid over $274 million in back wages in 2023 alone for wage and hour violations
  • Employee turnover increase: SHRM employee retention research indicates turnover costs can range from 50-200% of annual salary depending on the position
  • Strategic initiative delays: Impossible to quantify

Hidden disaster potential: Research on employment litigation costs shows that employment-related lawsuits cost small to mid-sized businesses an average of $160,000, with many cases exceeding $200,000-500,000 in legal fees and settlements

Geographic and Complexity Factors

Company Size Impact:

According to SHRM HR department benchmarking data, the median HR-to-employee ratio typically ranges from 1.0 to 2.5 HR staff per 100 employees, varying by industry, company complexity, and organizational structure.

 

Fractional HR costs by company size:

  • 50-100 employees: $6,000-10,000/month fractional
  • 100-250 employees: $10,000-15,000/month fractional
  • 250-500 employees: $15,000-25,000/month fractional
  • 500+ employees: Often requires full-time placement

Multi-State Operations:

An additional 20-35% premium for multi-state compliance complexity

Example: Florida-based company with 150 employees in 5 states: $13,000-17,000/month vs. $10,000-13,000 for single-state operations.

 

 

Industry-Specific Requirements:

  • Healthcare: Add 15-25% for specialized compliance
  • Manufacturing: Add 10-20% for OSHA expertise
  • Financial services: Add 20-30% for regulatory compliance
Get Emergency Cost Estimate

The Break-Even Analysis

When Emergency Coverage Makes Financial Sense:

Scenario: 150-employee company, HR director quit unexpectedly

Option 1: Rush permanent hire

  • Year 1 cost: $220,000
  • Risk adjustment (accounting for potential hiring failure): Effective cost $352,000 over 2 years

Option 2: Fractional coverage through MBS

  • Year 1 cost: $156,000 (including emergency premium and placement fee)
  • Year 2 cost: $132,000 (no placement fee, no emergency premium)
  • Total 2-year cost: $288,000 with 90% success rate

Savings over 2 years: $64,000+ with significantly less risk

What’s NOT Included (Hidden Costs to Watch)

Provider Fees May Not Include:

  • Specialized project work (handbook rewrite, compensation studies)
  • Technology implementation costs
  • Training program development
  • Recruiting for your open positions

Our approach: We ensure cost transparency upfront. No surprise fees buried in contracts.

Your Internal Costs:

  • Time for onboarding/knowledge transfer
  • HR technology subscriptions
  • Payroll processing fees
  • Background check services

The Time Value of Emergency Response

Cost vs. Speed Trade-Off:

Same-day response: 40% premium, 3-5 day response: 25-30% premium, 1-2 week response: 15-20% premium, Standard placement (3-4 weeks): No premium

When to pay the premium:

  • Payroll crisis (processing deadline within 72 hours)
  • Active legal investigation or complaint
  • EEOC charge response deadline approaching
  • Critical employee relations crisis

When you can wait:

  • No immediate compliance deadlines
  • The internal team can maintain basic functions
  • Time to evaluate options thoroughly

Payment Structures That Work

Our Preferred Approach:

  1. Emergency consultation: No charge (we assess if we can help)
  2. Placement fee: Due when the provider starts
  3. Provider fees: Monthly, directly to provider
  4. Performance guarantees: Built into provider contracts

What We Avoid:

  • Large upfront retainers before knowing if we can help
  • Monthly fees for “access” to our network
  • Percentage of your payroll or employee count
  • Long-term contracts that lock you in regardless of performance

Questions to Ask Any Broker or Provider

About Total Cost:

  • “What’s included in your quoted fee?”
  • “What triggers additional charges?”
  • “How do costs change after the emergency period?”
  • “What’s the minimum commitment?”

About Our Pricing:

  • “How does your fee compare to going direct to providers?”
  • “What value do you add beyond just connecting us?”
  • “How do you handle performance issues?”
  • “What if the first placement doesn’t work out?”

Our honest answers are available at: 407-863-0222

The Real ROI: What You're Buying

Beyond Just “HR Coverage”:

  • Risk mitigation: Equal Employment Opportunity Commission data shows thousands of discrimination charges filed annually, with avoiding one employment lawsuit easily paying for years of quality HR coverage
  • Executive time savings: Getting 15-30 hours/week back for strategic work
  • Employee retention: SHRM research consistently demonstrates that professional HR practices can reduce turnover by 20-40%
  • Operational efficiency: Proper HR systems save 5-10% on administrative costs

The Hidden Value:

Better sleep at night knowing employment law compliance isn’t a ticking time bomb.

What Happens Next

If This Is An Emergency Right Now:

Call immediately: 407-863-0222

  • Assessment within business hours
  • Provider options within 24-48 hours
  • Coverage deployment within 3-5 days

If You’re Planning Ahead:

Email: [email protected]

  • Understand your options before crisis hits
  • Get cost estimates for your specific situation
  • Build relationships for faster response when needed

Our Commitment:

Transparent pricing, honest assessments, quality provider matching. We only succeed when you get better HR service at fair prices.

Compare Your Options

Research Sources & Industry Data

This pricing guide draws on current data and research from leading HR and employment organizations:

Salary & Compensation Data:

HR Industry Benchmarks:

  • Society for Human Resource Management (SHRM) – Research & Surveys
    • Industry benchmarking and talent acquisition research
  • SHRM – HR Tools & Resources
    • HR-to-employee ratios, cost-per-hire data, and retention studies

Compliance & Legal Data:

  • U.S. Department of Labor – Wage and Hour Division
    • Wage violation statistics and compliance penalty data
  • Equal Employment Opportunity Commission – EEOC Statistics
    • Discrimination charge data and enforcement information

Employment Litigation Costs:

Industry Publications:

  • Harvard Business Review, Forbes, and other business publications provide ongoing research on fractional executive trends and ROI analysis.

Data references in this guide are based on the most recent available research as of publication. For current statistics and detailed reports, please visit the source websites directly. We update this content regularly to reflect the latest industry data.

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About MBS: We’re HR solutions brokers connecting businesses with optimal providers. Our transparent approach means no surprises—just honest guidance and fair pricing backed by industry research.

 

Legal Note: Pricing information is for general guidance only. Actual costs vary based on specific circumstances, company size, complexity, and provider availability. Research sources are current as of publication but may be updated by source organizations.

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