Staffing and recruiting  ·  4 min read

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.

How a temp staffing bill rate breaks down: pay rate, burden, cost, bill rate and gross marginPAY RATE$20.00what the worker getsBURDEN+ $3.40taxes, insurance, compYOUR COST$23.40per hour workedBILL RATE$30.0050% markup on payGROSS MARGIN$6.6022% of the billOne order that bounces twice eats the margin on about three good ones.Example numbers. Your burden and markup depend on the state, the job and the client.
Your commission comes out of the gross margin, not the bill rate.
1Staffing and recruiting

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.

2Staffing and recruiting

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.

3Staffing and recruiting

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.

4Staffing and recruiting

Three questions to ask your manager

  1. Is my draw recoverable, and what happens to the balance if I leave?
  2. When is commission paid: on start, on payment, or after the guarantee?
  3. What happens to my commission if the client does not pay or the placement falls off?
How M-Tracker helps

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.

Try M-Tracker free14-day trial. No credit card. No employee surveillance.

How a task moves through M-Tracker: brief, work, review, improve, then the manager1BriefResult, audience,must include, due.Files and linksattached.2WorkThe person does itand attaches whatthey made.3ReviewM-Tracker comparesthe work with thebrief. One plainparagraph.4ImproveThey fix what ismissing while it isfresh.5ManagerSees work thatalready passed itsown test.No screenshots. No scores. The person sees the review first.
FAQ

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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