How Do You Compensate Permanent Recruiters?
Hi everyone! I hope you don’t mind a somewhat complex question—I’m reaching out in hopes of getting some guidance from seasoned agency owners!
I launched my recruitment agency earlier this year, and things are going well; we’re averaging about $60K a month, primarily through contract placements. While I have extensive experience in temporary and contract recruitment, permanent placements are a whole new ballgame for me. As a solo operator, I’ve been able to manage roles and retain all fees, but now that I’m looking to expand my team, I need to understand how to calculate individual billings and commissions for my recruiters.
My plan is to implement a salary plus commission structure. The idea is that recruiters will first cover their salary through their billings and then earn a commission on the amount over that threshold. I’m thinking of a commission rate of 30% for securing a job order and 25% for successfully placing a candidate.
Here’s a scenario I’m trying to wrap my head around:
- If a recruiter has a salary of $5K per month and bills $30K in a month, how should I determine their commission? Should I consider the total fee of the job order they worked on or just the portion they directly contributed to?
- In my proposed plan, if a recruiter brings in a job order but another recruiter fills it, they would be entitled to a 30% commission after covering their salary. So, for instance, if the salary is $5K and the placement fee is $20K, would they earn 30% of $15K or 30% of the full $20K? My mind is a bit boggled on this—any clarification would be greatly appreciated! Thanks in advance!
