How much should a recruiter be paid?

paidAround this time of the year, clients ask us for help with salary reviews. They want to know if they are paying their staff too much, or not enough and how they compare with the rest of the market. We have similar conversations with recruiters who want to know if they are on a good wicket, or could do better elsewhere. As a consultant to the recruitment industry, there are probably few people better positioned to offer this advice…but I often find it very difficult.

The problem, is that there is very little consistency out there. The difference in salaries paid to very similar recruiters working in different companies can be significant. If there was once a rule book that everyone followed, it got forgotten about a long time ago. In a competitive industry that is continuing to undergo dramatic changes, this is to be expected.

Whilst the rule book might have been ripped up a long time ago, people are still looking for some guidelines. So, we thought it might be useful to offer some broad advice:

1. If you are in a billing role, your base salary should be predominantly reflective of how much you bill. If you are historically someone who bills around $250k then asking for a $100k base is just not realistic. A multiple of around three – four is a good guide.

2. The focus should be on the OTE, not the base Any serious recruiter who backs himself or herself will want a lower base so they can earn more in commission. Your OTE should be around a quarter to a third of what you bill.

3. Don’t get caught up on salaries matching job titles. A Team Leader in one business is junior consultant in another., and a resourcer can justifiably be on more than a Team Leader.

4. If you are not in a billing role, then it is probably a bit easier to compare salaries. Internal recruiters can expect a higher base salary if there is no commission element to their package and there is a more obvious route through different salary levels.

At the end of the day, it really comes down to the business you work in and how they do it.  Some are happy to pay overs to get the people they want into their business. Other businesses are more inclined to pay lower bases and offer a more lucrative commission model. For some the focus is more about culture and non financial benefits than money.

Whether you are employing recruiters or a recruiter yourself, it is a good idea to get some advice though. The recruitment world changes at such a dramatic pace, it’s best not to assume that you have it right.

Whilst your here, check out our latest Agency in Focus, an awesome opportunity for a delivery focused recruiter to bring credibility, expertise and focus to the senior recruitment market.

Luke Collard

4 thoughts on “How much should a recruiter be paid?”

  1. Interesting article and a subject debated regularly internally as the market grows. How about sign-on bonuses and guaranteed commission? Is this being seen by you guys?

  2. Hi Luke, (thanks to share your ideas with us)
    Regarding your point 1 :
    The 1 vs 3 or 4 ratio is an issue in our industry. It leads to the multiplication of tiny players (like me), often single-person boutique.
    Why ? because we own the whole value chain : from client relationship (and often a strong one, intuitu personae) to candidate (often through our own research too).
    When you develop your own business and you know how to do the job, you don’t always need a brand.
    So why would you abandon the two-third of your income ?
    Since we are a fixed cost business, I think there could be predetermined thresholds.
    The only case you need the brand or the network is when you work with global firms (which need the brand, the network and often the capacity to deliver massively).
    For SMEs or local business, the handshake and the personal contact make a lot of difference.
    What do you think ?
    Sylvain

  3. Hi Luke,

    “Other businesses are more inclined to pay lower bases and offer a more lucrative commission model…”

    I think this is one of the main aspects that hurt this industry today – agencies paying little bases and offering high commissions. All this does is flood the industry with many well underqualified ‘consultants’ who offer terrible service to clients as they are only fee driven rather than relationship / value add driven.

    The constant complaint we hear in the industry from clients is all about the multitude of spam resume emails being sent, the phone calls that offer no value at all, the contact by agencies who know nothing about the client or what they are seeking as they are just after a role to work on etc…etc…..

    I know for a fact that their are still recruiters being employed today who are 100% commission only (which is a topic for another day) and whilst this is a lot smaller section now than it was 10 years back, the point is still the same – low (or no) base recruiters with high commission are great for the agency – very bad for the clients and the industry in general.

    1. @Frank : 100% agree
      When I started in this job, my boss offered me 60 K€ and said to me “don’t go out for sales too early, learn the job first, for 1 or 2 years”.
      His best idea (otherwise, I would probably not even be in recruitement any longer to doscuss that).

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