How Do You Handle Payments for Permanent Recruiters?
Hi everyone! I hope you can help a newbie agency owner navigate this complex issue.
I launched my recruitment agency at the beginning of this year, and I’m excited to report that we’re currently generating around $60K per month, mainly from contract placements. While I’ve got extensive experience in temporary and contract recruitment, permanent placements are relatively new territory for me. As a solo entrepreneur, it’s been straightforward to fill positions and keep the entire fee. However, as I aim to expand my team, I need guidance on calculating billings and commissions for each team member.
I’m planning to implement a salary plus commission structure. The idea is that recruiters will cover the cost of their salary through their billings and then earn a commission on the amount billed beyond their salary. The commission plan I have in mind is 30% for generating a job order and 25% for successfully filling that order.
Here’s an example to illustrate my confusion:
If a recruiter has a monthly salary of $5K and bills $30K in one month, how would you determine their commission? I apologize if this is a basic question, but it’s causing me some serious confusion! Do you count an individual’s billings as the entire fee from the job order they contributed to, or just the portion they are directly accountable for?
According to my proposed payment structure, if that recruiter creates a job order but someone else completes the placement, they’d still be eligible for the 30% commission on the remaining amount after their salary is covered. In this case, if the salary is $5K and the placement fee is $20K, would they receive 30% of the remaining $15K, or would their commission be calculated as 30% of the entire $20K? Total brain explosion! I would greatly appreciate any insight on this! Thanks!
