Gross margins at engineering and IT staffing firms rose 70 basis points year over year on a surge in perm placement revenue, according to the 2016 TechServe Alliance Operating Practices Report. The median gross margin at engineering and IT staffing firms rose to 26.4%.

The increase was more substantial for high-performing firms, which posted gross margins of 31.9%, up from 26.9% in the prior year. A large part of the increase is attributable to a surge in perm placement revenue, according to the report.

As for the top-line, the median firm reported growth of 4.5% with high-performing firms growing 11.3%. Where “high-profit” firms delivered profit before taxes of 9.3% of revenue, the median firm in the survey reported bottom-line profitability of 4.3%, the report found.

In addition to highlighting what is driving top-line and bottom-line growth, the report expanded this year to include data on new issues such as the response of staffing firms to the Affordable Care Act, paid leave laws and more, according to TechServe Alliance CEO Mark Roberts.

“This report highlights why it is more critical than ever to employ data-driven management and execute in a highly disciplined manner — the chasm between high-performing firms and typical firms remains vast,” Roberts said.

The TechServe Alliance is a collaboration of IT staffing firms, solutions firms, clients, consultants and suppliers.