Recruiters – the commission v salary debate.

Last week I was approached by a guy who was looking to get back into recruitment after spending a few years out of the industry. We spoke about the fact that his absence, combined with a challenging market, might mean he will struggle to secure a role immediately.

“What if I was to offer myself on a commission only basis?” he asked. “ Would this increase my chances of securing a role?”

I rarely have conversations about a commission only model with either individual recruiters or agencies. And to my knowledge this set-up is rare. Maybe that is just historical, but for a role that is sales based, performance based and already heavily commissioned in most cases, you might think it would be more common.  So I started to think about it …

Initially it seemed a fairly straightforward argument. If both parties are up for it, then why not?  It’s a win-win with little risk.  But then I posted the question on LinkedIn and it quickly became clear that there was a lot more to consider:

 “I am not sure that it is healthy and drives the tight culture or behaviour”

“The key question is commission based on what and how that then effects longevity, quality, client relations, let alone the internal fight over opportunities.”

 “What is motivating the individuals in the first place and how is this portrayed to clients.”

 The scheme would present the possibility of a clear conflict of interest in that the commission only recruiter would monster the Hiring Manager into hasty or ill-considered hires. How could you ever trust the ref checks?”

 “It requires a very different level of attitude in both directions for this to be successful. It is not a traditional business and cannot be viewed as such.”

 “There would be too big a question over trust for all parties. Where is the commitment from the employer? Where is the care from the employee?”

*******

As the recruitment industry continues to evolve at such a rapid pace, and with the backdrop of continuing economic uncertainty, we  all might need to look at alternative options to the traditional employment model of salary and commission.

For example, if you are a successful recruiter and looking for a new job for whatever reason (as is the case for more and more recruiters at the moment…) you could conceivably find yourself still looking in 6 months time as lots of the market continues to be risk adverse. That is a long time to spend out of the market and not earning money. Alternatively, if you can consider commission only, or a heavily weighted commission structure, you might find potential employers more willing to take you on. And if you genuinely back yourself to bill, at worse you will probably earn the same money , and it is probably less risky than being employed on a big salary in many cases. Of course they are not the only considerations, but when the alternative might be nothing it is certainly something to think about.

And for an agency that has an appetite to grow, but cannot realistically add any extra significant overheads to its business, this model gives them another option to consider.

Obviously it is not going to be for everyone or every agency and  all the issues raised above need to be considered before going down that path.  I don’t think it should become the industry norm, but nor do I think it should be ignored full stop.  Personally, I think that in many cases there is room in recruitment for commission only (or at least heavily weighted commission packages) – and not just for desperate recruiters, or tight arse agencies!  It is maybe something that we should all start considering more?

Luke Collard

12 thoughts on “Recruiters – the commission v salary debate.”

    1. A lot to consider when setting up by yourself (set up costs, branding, working environment etc…..) that prevent a lot of people wanting to go into business for themselves. A personal thing I think ?

      1. Indeed. We are actually speaking to a number of people at the moment about commission only roles to add to our team. They get the benefit of the infrastructure, searches, database and so forth so it is actually an interesting proposition for some.

        It is worth noting that to begin with we are only considering old contacts – people who we have a basis to trust. Should be interesting if it works out.

  1. With a commission only role the agency would only be allowed to recruit Permanent Residents of Australia or Citizens, as this is not allowed on a 457. Speaking from experience! As a big percentage of recruiters here in Australia are British or at least from overseas and on 457 visas, this would reduce the number of candidates available for the commission only roles.

      1. I agree Luke. I do think that the commission only structure can definitely work within recruitment, but if this is the avenue you go down I would think that you would set up by yourself. Commission only roles I think will only work if relationships are there with clients to guarantee the flow of roles coming in. Hence if you have those relationships then set up your own agency and manage your own flow of commission.

  2. Luke, great article. Interesting feedback – is it wrong for a sales person to be motivated by money? For a pure “hunter” sales role, a commission only structure could serve both the employee and the employer quite well.

    1. It works well in other sales industries Mark so I think it could work well in recruitment. It certainly helps separate the bull shit artists who talk a good game but dont back it up with billings, from the recruiters who would genuinely back themselves.

  3. Once upon a time I ‘secured’ a role on commission only basis (not in the recruitment industry) after a 30 minute interview at what eventually turned out to be someone’s house, I was given product training (a DVD to watch) and sent to a location to knock on doors and start earning easy commission! It took a day for the penny to drop that the Kirby Vacuum cleaner I was selling cost more than an entire families’ annual salary and I wasn’t going to be making that much ‘commission’ after balancing the costs of my so called employment.

    Obviously I was really stupid back then but the point is, recruitment is already an industry that attracts some dodgy operators, and if commission only becomes even slightly acceptable I can imagine many young recruiters being taken advantage of, little professional training and subsequently professional skill being involved and much more of the cowboy element we abhor.

    1. Recruiters have a dodgy reputation in so many quarters, this will only make it worse. Yes it is a sales industry, but “commission only” devalues recruitment as a legitimate profession.

  4. I disagree that it devalues a legitimate profession, having attempted to start up my own business it is not as easy as posting an ad on seek. The backend administration, chasing money, paying bills, taxes etc you end up spending more time doing that than you would on actually recruiting.

    I am now happily employed on a commission only basis, no I don’t get 100% I have costs associated, Rent, Internet, Ad’s etc. But based on a $250K billing year I still make over $120K.

    Put me on a base salary and I would be lucky to make $90K on those billings. Obviously there is drawbacks but I think the term “Put your money where your mouth is” is something most recruiters avoid.

    Expecting 100% of the commission goes to Craig’s most recent post “I want everything now and want to do nothing for it”

    My 2 cents anyway

    1. Hi Marc,

      I know this post is two years old, however I would like some more advice! Your reply stood out to me. My first year of recruiting I was on a draw then went to a straight commission (company could no long support a draw…small company). I was in charge of a full desk with no company resources ( no paid corporate license on Linked In, Indeed ,etc). I also worked from home. Fast forward a year and a half later. I am starting my new job on Sept 8th!

      This role is also work from home, small company, and commission only. HOWEVER the company pays for resources, and provides job orders. Given my knowledge now, I asked during the interview about security with clients, commission fees, etc. I guess my question to you is, in this present day do you still feel you can make it? I know how to recruit now and not entry level. I am a bit nervous but excited to be in a new industry. The company job orders out way the recruiters ( only 4 recruiters currently, all been with the company at least a year some 10 years). Company focuses on finance and E commerce.

      I feel good but would love a second opinion and or advice.

      Thanks!

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