Do you want a career or a pay cheque?

I received a call from a Recruiter today asking for information about a particular agency they are scheduled to interview with later this week. To aid Recruitment Professionals in their career search we provide this information to Recruiters for free, making these kinds of calls a part of our everyday routine. Issues only arise when the same Recruiter calls over and over again wanting to make a lateral move and their expectations are that the environments are going to be markedly different.

The major differences in agency environments are typically driven by their compensation models. When an agency offers compensation that includes a base plus commission, you can except to be measured against a strict matrix based on the number of calls you manage and/or a number of submittals per day ratio. An Agency that offers a draw against commission will be concentrating on your submittal-to-hire ratio. Keeping you driving towards the quality over quantity model. Agencies that offer 100% commission tend to drive for strong partnerships between any given Account Manager and a Recruiter, allowing each person to play to their strengths in filling positions.

Determining your tolerance for risk as it relates to your income will either limit or increase the types of environments you are able to work in. Each compensation level has its positives and negatives, but, if you want to increase your knowledge and income in the Recruiting Industry, you must be willing to assume a certain amount of risk.

In other words, “no risk, no reward.”

Cheers,

Rebecca B. Sargeant

Recruiter’s Career Coach

rsargeant@rbs-staffing.com

Comment by Allenda Simpson on September 23, 2010 at 3:07pm: I guess it depends on how you as a recruiter define “reward”. The reward should start with knowing that you’ve made a good placement, followed by the fact that you are in turn compensated for the work and effort that you put into it. I think if we focus on making quality hires, we can build a network and career for ourselves that gets us the reward which includes not only dollars, but also referrals and a reputation for being very good at recruiting.

I’ve never worked for an agency, but I think after a certain point we know what we are good at and what we are worth. We have both candidates and companies that call upon our skills, no matter where we work as an agency. You most likely are not allowed to call old candidtes, but they can follow you. The same with a company.

So if we want to go from hiring only non-exempt positions and advance to executive level jobs, understand that the “risk” is that you are starting from scratch. So when you start out in the new area, be willing to take a lower pay (flat salary or salary plus commission) until you get to the point where you have a track record and a pool of companies and candidates, then you can work on commission. Once you work on commission only, I think it helps, too, to keep (where possible) some kind of savings, so that we have 6-12 months of rent, gas, food, etc to carry us for those times that in spite of best efforts, the work is just not out there for us to make placements.

We've heard it before, but I think it is true for recruiting: love what you do, and the money will follow.

-Allenda

Comment by Recruiting Animal on September 28, 2010 at 10:55am: Here's my playback:

Recruiters are paid in different ways. Each method is tied to a different way of measuring success.

1.Base plus commission: (Calls / Sendouts)

Performance is measured by number of calls compared to number of send-outs per day. No focus on hires. Activity is the key.

2. Draw against commission: (Sendouts / Placements)
Number of Send-outs is compared to number hires.

3. 100% commission
This is accompanied by a clear division of labour between Account Manager and a Recruiter.

Follow up questions

What is the specific logic that ties each method of payment to a different method of performance assessment?

How are the 100% commission people measured?

Comment by Sandra McCartt on October 1, 2010 at 6:06pm: 100% comish recruiters are measured by the amount of office space available if they work in house. Are they making enough money for themselves and the house to justify keeping their butt in a chair at a desk.

If they work remote there is no cost so as long as they are doing enough to keep themselves happy and stay with it while contributing to the profit it's a success.

Comment by Brian Pho on October 2, 2010 at 11:05am: Hey Rebecca,

Good Post. One model you forgot: An agency that sets up their own systems, processes, telephone services and owns their own technology. After all of that is set-up, they want to hire 'independent consultants' / 'independent contractors' to follow in their model. The agency then provides these consultants the tools they need to do the jobs (+ all the metrics requires to measure their success/failure).

The agency then hires Incorporated individuals on a contract basis leaving the agency with no employees (for tax purposes). The independent consultant/contractor gives a % of their own billings back to the agency for their support network + maybe pay a licensing / franchising fee upfront (usually a couple of thousands of dollars).....

This might be a win-win for both the agency and the independent contractor - but Im assuming it would be hard to find an independent contractor that wants to give up their own business name in order to sell under somebody else's umbrella..... I guess the owner of the agency is the won who gets a residual income at the end by working off the backs of other independent consultants.....