Recruiting agencies chore their recruiters with finding the best-fit candidates for other companies, but how do they pay them?
I’ve heard a ton of stories regarding recruitment payment and hiring experts in the past; some too good to be true and some with the potential to make me feel sad for the partakers.
The recruiter payment method varies based on the country and is impacted by the general work culture. In the united states, recruiters don’t get paid until they match the applicant with the right company, precisely after they get their first paycheck. At this stage, recruiters receive the green bucks from the other side.
The question here is that is this always the case? If yes, how’s the recruiter’s commission calculated, and what variants affect their salary? Is it like this for recruiters worldwide, or does this method only legitimate for American recruiters?
Recruiters aren’t born as hiring experts, and it usually takes them a long-time to hone their talents and make a name for themselves. As these true craftsmen of the recruitment sector slowly nurture their naturally-inherited talents and further climb the ladder to success, they become more resourceful and hawk-eyed in rightfully placing employment ads, reaching out to potential candidates, and grooming them for interviews, and even snatching job offers out of thin air. It’s only fair for such high-valued skillful employees to make a good living since what they do, not all can do.
However, the salary structures vary as different work cultures value recruiters and their roles as match-makers differently.
For more clarification, a recruiter’s commission structure and salary calculation method don’t follow the same rules when, for example, one’s working as an in-house hiring expert for an American organization and her counterpart does the same thing in Europe. What shifts these numbers, you may ask. Let’s break it down in a geographical fashion.
American and Canadian headhunters are among some of the highest-paid hiring experts in the world, and it’s not a jaw-dropper. Even with ongoing national home imprisonment in North America and the rampage of the deadly virus causing the economy to decline, still, American and Canadian recruiters bring in the big bucks and outclass their main European competitions; all because the race for a better-paying job is still hot and ongoing in the region.
To put things in perspective, picture an American/Canadian “Executive Recruiter.” These recruiters screen, interview, and recommend executives for higher-ranking management positions. As of March 2021, the average executive-recruiter’s commission peaked around $100,000 per annum, with the lowest point hovering around 83,000 and the highest point reaching 116,000. It worth mentioning the only in 10% of the cases (higher management contracts) the whopping 50% slice of the salary as the recruiter’s commission happens, and candidates have to basically evenly split their monthly income for a fixed duration of time with the executive recruiters.
In the same month, the average recruiter’s commission for regular recruiters whittles down to roughly 58,000, highlighting the importance and difficulty gap between traditional recruiters and recruiters tasked with finding high-level management vacancies.
The reason behind these incomes lies in the core nature of the job in the US and Canada. The norm in these parts is to pay the experts based on a “recruiter’s commission model.” In some cases, we’ve even witnessed some firms offer a draw instead of a basic salary.
That being said, the way North Americans handle recruitment business also impacts the final paycheck. Recruiters throw themselves in a high-risk/high-reward situation sacrificing the comfort and sense of security that a desk job brings in the shape of monthly paychecks for an on-the-run pay-after effort doesn’t mean anything; they are willing to go to the distance in favor of a more considerable income.
Ah, The Continent!
For the longest time, my European female friend blasted my ears into smithereens with her constant nagging. She was furious over the relatively — but still not that much — noticeable gap between European recruiters and American/Canadian ones.
I’m sure that’s happened to you, at least once; and if it hasn’t happened to you yet, chances are you’ll get an earful about this as you meet European headhunters.
However, I never saw the point she was trying to make. Their whole method of, quote on quote finding new hires, is entirely different to their American counterparts. For starters, they relinquish the softness of a desk-job.
So, I had to investigate further, and this is what I found:
A survey of nearly 1500 Salaries recorded in the UK shows that by April 2021, a recruiter’s average income in the London area lands somewhere around £31,000 which roughly equals 43,000 united states dollars. The reason behind the payment gap in the US and UK lies in the payment methods. As explained, American recruiters feel safe with the recruiter commission structure and go for the big goals and take risks. On the other hand, English recruiters prefer having a steady income flow instead of putting themselves at risk.
This gap is quite visible in the executive recruiter position as well. Glassdoor reports in the same month, the average English executive recruiter brought in 43,000 Euros which barely mounts up to half of what American executive recruiters were earning in March. Obviously, a couple of parameters are impactful here, such as the national healthcare situation, the market, global trade, and so on. Despite this, it’s clear that the income structure based on the recruiter’s commission philosophy and the courage to take the risk, even in this economy, suits a culture like America.
A recruiter's commission doesn't impact the candidate's income in America; in the same way, an English recruiter's fixed salary won't impact the money their candidates receive after getting their paychecks. It's just a mere payment method differentiate, and in both atmospheres, candidates are not susceptible to income cuts. However, candidates working with recruitment agencies have to share some of their income as the recruiter's commission which is the main salary structure for hiring professionals in the US.
Predictions for the year to come, and considering that the pandemic infection rates are going down, depict an increase for recruiters globally. As the nightmarish and deadly widespread resides and it's safe once again to work in offices and close quarters with co-workers, recruiters will face a surge of previously laid-off workers who are aching to get back to work, and this just makes the candidate-screening market blooming yet again.