Filling job vacancies is hard work. For this reason, employers are willing to pay recruiters good money to find the best people for their important positions. Employers do this because they will face higher costs if they have to cycle through a series of people who are a poor fit for the job.
To identify successful candidates, recruiters network with qualified professionals, advertise career opportunities, and vet candidates for full-time or contract positions. Compensation for all of that work is typically based on a recruiter commission plan, which can be quite lucrative. Get the best recruiter commission plan by visiting this website.
Internal Versus External Recruiters
Larger companies might have an internal recruiter who manages the hiring process. Those people receive standard salaries. They are not paid commissions but may earn bonuses.
On the other hand, an external recruiter works for a recruiting firm and fills jobs for numerous companies. They rely on a recruiter commission plan for the majority of their income. The recruiting firm will pay a small base salary plus the commissions. Average annual incomes in 2019 for external recruiters, according to Glassdoor, total about $51,000. However, recruiters who deal with highly compensated professionals can achieve higher incomes.
Payment Calculation and Timing
A recruiting firm collects anywhere from 20% to 40% of the new hire's first-year salary.
- For the sake of simplicity, look at a job placement for a $100,000 annual salary.
- A 40% commission on $100,000 equals $40,000.
- The firm then pays the individual recruiter 50% of that commission, which is $20,000.
Percentages will vary somewhat, but a recruiter who consistently fills high-paying positions will have commission add up quickly. Consider the example of a recruiter who fills six positions in a six-month period for a total annual salary of $800,000. A firm collecting a 40% commission brings in $320,000 and could pay out 50% of that to the recruiter, which is $160,000.
Employers do not pay the commission immediately because they need to confirm that the new employee is a good fit. Therefore, commission payments may not be authorized for 30, 60, or 90 days depending on the contract. When recruiters fill contract or freelance positions, employers typically spread out payments in monthly installments. As a result, a recruiting career relies on patience before commissions start to produce consistent income.
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