Most agency recruiters are paid a base salary or a draw, plus a commission that is a share of what their placements earn the firm. On direct-hire placements, the commission is a percentage of the fee. On temp placements, it is a percentage of the gross margin on the hours worked. The money usually lands after the person starts and sometimes only after the client pays. Ask your manager for the plan in writing, then work through one placement with real numbers.
The three words to learn
Draw. An advance on commission. If your draw is $3,000 a month and you earn $2,000 in commission, you still get $3,000, and you owe $1,000 against future commission. Some draws are "recoverable" like that. Some are not. Ask which.
Split. Your share. A direct-hire plan might pay you 20 to 40 percent of the fee. A temp plan might pay 5 to 15 percent of the gross margin on the hours your placements work. Some plans go up as you bill more in a quarter.
Threshold. Many plans only pay commission above a certain amount of billing, often set to cover your base salary. Below it, you get your base. Above it, you get the split.
Two placements, worked through
Direct hire. You place an accountant at $70,000. The fee is 20 percent, or $14,000. Your split is 30 percent, so $4,200. The client has a 90-day guarantee. Many firms pay you when the invoice is paid, or hold part until the guarantee period ends.
Temp. You place a forklift driver at $20 an hour, billed at $30. After burden, the gross margin is about $6.60 an hour. Forty hours a week is $264 of margin. Your split is 10 percent, so about $26 a week, for as long as they stay. Ten workers on assignment is about $260 a week on top of your base, every week.
That is why temp recruiters care so much about placements that stick. A worker who leaves in week one earned you one week.
When you actually get paid
It depends on the plan, and this is the part to get in writing.
- On start: the commission is earned when the person starts.
- On payment: earned when the client pays the invoice. Can be 30 to 60 days later.
- After the guarantee: part is held until the person passes the guarantee period.
- Temp: usually paid monthly on hours already billed.
If a placement falls off before the guarantee ends, most plans claw the commission back. So the fastest way to earn more is not more placements. It is placements that hold.
Three questions to ask your manager
- Is my draw recoverable, and what happens to the balance if I leave?
- When is commission paid: on start, on payment, or after the guarantee?
- What happens to my commission if the client does not pay or the placement falls off?
Where M-Tracker fits
Commission follows placements that hold, and placements hold when the submittal matched the order and the confirmation left nothing out. M-Tracker checks both against the written order before the client sees them, so a new recruiter's first placements are more likely to be the kind that pay for months, not days.
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Questions people ask
Is a draw a loan?
A recoverable draw works like one: you pay it back from future commission. A non-recoverable draw does not have to be paid back. Check your plan.
What is a good split for a new recruiter?
Lower than a senior recruiter's, and that is normal. Ask what it takes to move up and when the plan is reviewed.
Should I take a lower base for a higher split?
Only once you have a year of placements that stick behind you. Before that, the base is what pays the rent.
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