Base v OTE

balanceMoney is not the first thing that I talk about with a candidate….but obviously it comes up pretty early in the conversation. Makes sense; none of us go to work just for the fun of it…..we expect a bit of money too!

“So, what are you looking for money wise, John?”

It’s an open ended question…..it can be answered anyway. But a lot of times when the answer comes, it is in the form of a base salary only.

The last time I looked, commissions and bonuses are a big part of how we recruiters earn our money. Rightly or wrongly, that’s the way the industry works…and it is a big reason why we put ourselves through the emotional rollercoaster that we do….to see that money land in the bank and enjoy the spoils of our efforts. Base salaries are obviously important. Of course they are. We quite rightly expect a certain guarantee of income, which reflects our experience, achievements, and the role we are being employed to do. But that should not be the focus for an agency recruiter. If it is, then you might be in the wrong industry, or employing the wrong people.

Think about it like this. It is hard to justify that someone is ‘hungry’, ‘motivated’ and ‘driven’ if $5k on their base is more important than the opportunity to earn $50k in commissions. It’s even harder to justify, if having that extra $5k means it will be tougher to earn more because it puts the threshold target up. And it is impossible to justify when there is no interest in understanding how the commission model work….as long as a base salary of $X is ticked off.

If you are in a commercial recruitment role then you should be far more interested in the OTE than the base. When someone asks you what you are looking for, the answer should be in terms of an OTE, not a base salary. And when you are considering any offer, you should be making your decision based on the OTE first, and the base second.

Obviously, for recruiters to think in terms of an OTE, agencies need to make commission models realistic (and easy to understand!). Recruiters, quite rightly, can be suspicious of commission models and when that happens, the whole concept becomes irrelevant, and understandably it does then become all about the base.

We get asked a lot by clients and candidates how the balance should work between base and OTE. Different situations require different models and there isn’t a one size fits all. I’m certainly not against paying someone a larger base if there is good reason to, and I am not definitely not advocating paying people on the cheap either. 

But often a larger base means a lot lower OTE….and that equation doesn’t work for someone who is supposedly ‘hungry’, motivated’ and ‘driven’. Some of the most successful agencies will often question a recruiter who is largely focused on their base salary for that reason. And conversely, whilst a juicy base is probably going to grab your attention, you might also want to ask yourself why some agencies feel the need to pay a high base (and when you have been made redundant after 6 months of a slow start you will understand why!). 

As an agency recruiter, the conversation should be about the OTE, not the base….

Do you agree, or disagree?  Are you on a high base with a smaller OTE and how does that work out? Would you change to a job with a lower base but higher OTE?

 

Luke Collard

7 thoughts on “Base v OTE”

  1. I hate to say it but I disagree… I am all about the base.
    I live off my base totally and my bonus is exactly that – a bonus. I pay my bills with my base, and live within my means based on that.
    Don’t get me wrong I strive to earn as much said bonus as insanely possible, but I would never take a drop in base – ever.

    1. Hi Emma.
      Always interested to get a different opinion. A couple of follow up questions for you if I can:

      Would you do the same job now if your employer said they were no longer paying bonuses, so it was just your current base?

      If your employer gave you the choice of increasing your base salary by $5k next year, or offering you an improved commission scheme that would see you earn $20k more than you did last year on similar billings….what would you choose?

  2. I always find it really strange when recruiters talk in terms of base. Obviously it is the guaranteed take home but for me it is 1/3 of my OTE. Why would I care if my base is going up by $5-$10k here or there when my ability to earn is based on my billings.
    It is unfortunately a high % of recruiters who are focused on the base and want to move for a higher base not OTE
    We only started to attract more senior recruiters once we upped our bases and lowered our commission (against my better judgement) and it frustrated me!

    1. Thanks for the comment Joel.
      Did you find the quality of people that you were able to attract because of the higher base change…for better or worse? It is something that I see a lot of agencies who are ambitious to grow end up doing, but often it doesn’t bring the desired result….in fact often the opposite. Conversely I have some agencies that say…”Here is a good base, but here is a brilliant comms scheme so if you back yourself you will do very well.” – they soon work out who is serious and who isn’t.

      1. So we definitely managed to snag more people coming over from the UK which is great, they have more costs in moving so I understand why base is a bit more important. These guys are working out well.

        Locally we just got more people through the door for interview due to the higher bases. This hasn’t meant we have hired them all just that at least we have a shot at them. Every business wants that superstar recruiter but it is rare they move unless really pissed off with their boss/company. Why leave a good desk etc…….those we have hired are in track to succeed so fingers crossed.

        We used to do the here is a good base and amazing comms but the uncertainty seemed to be the big issue for a lot of prospective new hires.

  3. Surely base is important if you are looking at getting a mortgage – it’s much more important, and has a much bigger weighting than commission (certainly in the UK anyway). It depends on the profile of the person you’re getting. Often in the industry we’re just looking for hot young things, and their lifestyle doesn’t dictate needing a high basic. But if you want someone older, with more experience then you have to balance things differently. In my opinion anyway.

  4. There’s a sweet spot here I think,. I went for a job once years ago (sales, not recruitment) where the MD of the company told me he hated paying base salaries at all, as he thought his sales staff should live and die by their commission – not that practical a view.

    There is competition for good recruiters, so absolutely you want to be careful, but a higher base might attract better quality, which is better for your business in the long run…

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