Freelance Technical Recruiter Fees structure and other info requested

Hi! I am trying to explore into the freelancing recruiter world and wanted to see if anyone could help me with information listed below:

  1. What kind of fees structure or commissions are paid out for contract placements and full time placements? Pls give some industry numbers so I can negotiate reasonably.
  2. Is there a non compete in place once you work with any company? If so, how long is it n effect?
  3. What are some good ways to look for clients?

Thank you for your help with this!

AR

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I agree with Jerry - NEVER lower a fee just to get in. There may be some circumstances where it makes sense - exclusivity, retained/contained fee up front, but those will be the exception not the rule. Jerry also has a great point on client development - any thoughts on how many No's it takes to get a Yes? you may go a loooooong time without a paycheck. Be prepared.

Good luck!

Thank you Anm and Jerry! Should I have additional questions, would it be OK for me to email/ call you? Appreciate your help!!!
 
Amy Ala said:

I agree with Jerry - NEVER lower a fee just to get in. There may be some circumstances where it makes sense - exclusivity, retained/contained fee up front, but those will be the exception not the rule. Jerry also has a great point on client development - any thoughts on how many No's it takes to get a Yes? you may go a loooooong time without a paycheck. Be prepared.

Good luck!

First thing first.  If you are currently with an agency do you have a non compete?  If you do take a copy of it to an attorney and have them review it to let you know if it restricts you from going out on your own as to time and distance.   As it appears that you are not working the client side at this point you might not have too much of a problem even if you have a non compete.  It might however restrict you from contacting any candidate you have worked with while with your current firm.  Not easily enforceable but depends on the attitude of your current employer as to how much they want to hassle you if you leave and go out on your own.

I don't want to sound like "Debbie Downer" here but without any experience in developing client business i think you have a real uphill battle to consider.  I have seen a lot of people who thought they had business contacts who would do business with them find even buy an existing agency and discover fast that when it came down to those contacts being able to list a job and pay a fee it didn't happen.

Based on the questions you are asking it appears that you know the recruiting side but don't have a clue about running a business, generating business, negotiating fees, terms etc.  There is a lot more to it than just being a freelance recruiter.  That term indicates to me that it might be a better move for you to explore the possibility of actually being a "freelance recruiter" by doing contract work for companies for a while where you are paid either hourly or a salary for a contracted period of time.  During that period you might explore making some direct business contacts if you want to expand freelance work into actually being your own business working both sides of the equasion.  Some companies will pay contract recruiters hourly and do not care if they do other business as long as they produce what the company wants.  Others do restrain their contract recruiters from working with other clients. 

That being said.  Fees, anyplace from 20% of annual starting salary up to 35%.  Some are flat fee of 20 to 40K in the medical and biotech field.  90 day guarantee for replacement at no additional fee is probably standard from what i see.  I don't refund even a prorated amount of a fee.

As a third party recruiter you don't have any non compete with any of your client companies other than in some cases you might be asked to sign something that precludes you from recruiting any of the current employees of that company.  I have only been asked a very few times to sign one of those.  It is understood that if you start robbing the hen house you don't get anymore of the eggs.  One i refused to sign , as did several other recruiters,  because the company wanted us to agree that we would not work with any current or previous employee of that company for a period of one year after they left.  That was ridiculous so nobody would sign it.

You didn't say why you were thinking of going out on your own.  I assume you think you can make more money working for yourself since you mention low commission and are seeing those high fees.  Just think about the cost of doing business, the risk and balance it with a guaranteed base + comish and no risk or responsibility for the costs involved.  You definitely can make more money if it works but it is not without the fact that success or failure rests squarely on you.  It is a consant battle to keep listings in the pipeline so you can recruit and sometimes just sending the bill doesn't assure you that it will get paid.

I would advise you to go to another agency for a few years, where you can be a full-life cycle recruiter vs just working on other people's jobs. You'll likely make more money than you are making now if you go to a good firm and you'll learn a ton about working with clients, negotiatiating fees, etc. The advantage of going to another agency now and getting strong on the clients is that you'll be able to leverage the efforts of those around you. You're not able to do that as much now if you are just recruiting. 

I wouldn't advise you to strike out on your own with no client side experience. If you do it at an agency first, you'll learn so much more so that when you do go out on your own you won't be starting from scratch and will know what you are doing.

If your goal is to work for yourself then I would not advise you to go the contract route because you'll be working for one client and that is very different than developing new clients.....also, people think it's easy working on the client side. It's not, some of the best recruiters I know work on the client side, it's just different. One major con is that unlike third-party recruiters, they don't have the option of walking away from a ridiculous search and a hiring manager with unreasonable expectations. They have to fill all of their jobs and sometimes they have as many as 30-40 going at once. I've been there and that's not especially fun. :)

Good luck!

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