When dollars don’t make sense….

no senseSomething is happening with recruitment salaries….they are all over the place. There will always be some discrepancy between what competing agencies will pay their recruiters, but at the moment it is hard to get an accurate picture of what is standard. In fact, there doesn’t seem to be much of a standard at all these days.

We are seeing huge variations in base salaries being paid to recruiters. I am currently representing two recruiters who have roughly the same amount of experience and similar track record, but there is a $50k difference in the base salary each is being paid! This might be an extreme example, but it is not unusual for us to see a $30k plus difference being paid to two very similar recruiters. And when you see a fairly junior recruiter being paid more than an experienced Manager in another business, and recruiters demanding $20k extra on their base to even consider moving, it makes you think the recruitment world has gone stark raving bonkers.

How the heck did we get here?

When you consider that good recruiters don’t grow on trees you would expect some salary inflation. Market dynamics and all that. But it seems that in some corners of the industry, common sense has been replaced with desperation (and probably a touch of laziness and ignorance too) to the point where good money is being thrown at average people, just to get someone in the door. And then more to keep them going elsewhere. Crazy

An initial offer of $5k more, becomes $10k on negotiation, which becomes $15k after a 6 month salary review and then becomes $20k six months later when they have been offered more to move again. A nice $20k increases in 12 months. Crazy.

And here is the really crazy thing. Often it has little to do with performance. I see these people all the time….six figure salaries with five jobs in as many years and looking for an increase again. And they often find some agency willing to give it to them. Crazy.

Apart from the fact that often makes no financial sense, it’s crazy because it isn’t necessary. There are many other ways to attract and retain good recruiters without having to blow the budget. A focus on the OTE and a juicy commission structure is the most obvious….any well respecting recruiter who backs themselves will always prefer this option anyway (which should immediately scare you off those that don’t). Where will it end up?

I am sure we have been here before….not that long ago….and a lot of agencies that got caught up in that crazy whirlwind aren’t around anymore. Some agencies seem to be heading down that same path. Crazy.

gone crazy

 

 

 

 

 

Luke Collard

1 thought on “When dollars don’t make sense….”

  1. I agree, Luke. I have seen some crazy salary stuff in my time. In my view this happens for two primary reasons

    1) Decision maker (somehow) equates a higher base salary with higher competence
    2) Decision maker has no system for, resources to devote to, or interest in, developing recruiters from scratch so is obliged to enter a ‘bidding war’ with other similar agency owners for scarce talent.

    Whichever way you look at it, it is not a way to build a profitable recruitment agency.

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