Now that we’ve pondered the question, “how do recruiters get paid?” let’s ask ourselves, “how much do recruiters make?” In fact, let’s tackle this issue on both a monthly and yearly basis.
First, how much do recruiters get paid per placement? As we’ve already established, a recruiter’s placement fee is based upon the candidate’s first-year salary. For example, if the salary for the position is $70,000 and the percentage that the recruiter will be paid is 20% of that, then the recruiter will receive $14,000 from their client.
Once again, according to www.glassdoor.com, the national average salary for internal recruiters is $45,360. We’re not talking about internal recruiters here. We’re talking about external recruiters who are part of a third-party agency recruiting firm. These firms do not work for just one client. They have multiple clients.
And that brings us to our first point regarding how much recruiters can make.
How much do recruiters make a year? – Their client list will tell you
Let’s work this whole process backwards, shall we?
- To receive a placement fee, a recruiter must make a . . . wait for it . . . placement.
- To make a placement, a recruiter must have a job order.
- To have a job order, a recruiter must receive one from a client.
- A recruiter must have a client.
So there’s the starting point! There’s usually a limit to the number of job orders that a recruiter receives from any one client. So the key for a recruiter to make a lot of money on both a monthly and yearly basis is having more than one client. In fact, recruiters usually strive to have as many clients as they possibly can. This prevents them from “putting all of their eggs in one basket.”
Of course, being flush with clients is easier said than done. How do recruiters find clients? That’s a story for a different blog post.
So the more clients you have, the more job orders you’ll have. The more job orders you have, the more opportunities you’ll have to make placements.
Okay, let’s not mince words here. Learning how to be a great recruiter within an agency can be a very rewarding career choice. In other words, you can make a lot of money.
However, it takes more than just a large client base and a fistful of job orders. You also need to have plenty of qualified candidates.
Sourcing candidates will pave your path to a payday
Finding qualified candidates is not as easy as it might sound. That’s because you might find yourself recruiting passive candidates. You know, those candidates that are superstars and are already working for somebody else. Of course your clients want those people. Who wouldn’t want superstars?
As a result, you’ll need a recruitment sourcing strategy that involves a number of candidate sourcing techniques. Of course, you’ll have an applicant tracking software, where you’ll house all of your candidates in a recruiting database. You might also try social media (including Facebook recruiting). Heck, you might even try a Google resume search.
And hey, don’t forget the candidates you can find in a split fee recruiting network. Recruiters share high-quality candidates all the time in such networks, and they make split placements on a consistent basis.
Whatever you do and wherever you look, you must find qualified candidates. Specifically, you must find the type of qualified candidates that your clients want to hire. Because unless you do, it won’t matter how many job orders you have.
You won’t make that much money as a recruiter. In fact, the Glassdoor average might start to look attractive.
How much does a recruiter make in a month?
If you’re a direct hire recruiter only, that means you’ll only get paid when you make a direct hire placement. Until then, you’ll get nothing and like it. With that in mind, just about every recruiter would like to make at least one placement per month. That keeps the cash flowing . . . just the way it should be. But what does that look like, exactly?
Well, let’s use the numbers from our above example. Let’s say you make one placement per month, and your average placement fee is $14,000. Then it’s simple. You’re making $14,000 per month!
However, that’s not the way that life works for agency recruiters who only make direct hire placements. That’s because they don’t make any placements at all during some months. That’s right: a big, fat zero. Sure, they might make two placements the next month. Then again, maybe they won’t.
That’s why offering contract placement services to clients is a smart business move for recruiters. When you make contract placements, you receive money every week that your contractor works. So even if you fail to make a direct hire placement during a given month, you’ll still have money coming in from your contract placements.
Worried about the extra administrative work that comes along with contract placements? Don’t be. With Top Echelon’s contract staffing services, we worry about the administrative hassle, and you focus on recruiting.
What percentage do recruitment agencies take on contract positions?
Let’s say you place contractor at one of your clients. As a result of that placement, you earn $12 per hour. Let’s run the numbers for a single month.
$12/hour x 40 hours/week = $480
480 X four (4) weeks = $1,920
And that’s just one contractor. What if you place two at $12 per hour? Then you’d earn $3,840 per month, even if you didn’t make a single direct hire placement that month.
How much do recruiters make a year?
For the answer to this question, let’s go straight to the source, shall we? Yes, let’s ask agency recruiters how much money they make in a calendar year. Luckily for us, we have such a group of recruiting industry professionals willing to answer that question: the recruiters of the Top Echelon recruiting network!
We recently conducted a poll of our Network recruiters. As part of that poll, TE asked recruiters this question:
What was the cash-in total for your full desk recruiting in 2016?
The choice of answers that we provided is listed below, along with the percentage of Network recruiters that selected each one:
- Less than $100K — 24.0%
- $100K to $150K — 26.4%
- $150K to $200K — 8.3%
- $200K to $250K — 15.7%
- $250K to $300K — 9.9%
- Over $300K — 15.7%
As you can see, 76% of the Top Echelon recruiters participating in the poll earn more than $100K. Not only that, but 41.3% of them also earned more than 200K. And last but certainly not least, 15.7% of these recruiters earned more than $300K.
What’s the deal, Bob?
There was a story that was circulated way back in that day. It might have been in the old Fordyce Letter or another publication. It goes something like this (keep in mind that I’m paraphrasing here):
Tim was a hard worker. He put in 40-50 hours per week at his office job. To relax on the weekends, he sometimes frequented his local bar. At that bar, he often saw a guy named Bob there. Bob was always relaxed and joking with other bar patrons. He would regale them with his tales of mountain climbing, kayaking, and traveling all over the country. Tim, who was getting quite tired of his job and long hours, wanted to know Bob’s deal. Was he independently wealthy? Did he receive an inheritance? What was up with Bob?
So Tim asked Bob, “Hey, do you even work? What do you do for a living that allows you to live this kind of lifestyle?”
Bob looks around to see if anybody else is around. Then he leans in and says to Tim, “I’m an executive recruiter. I find people for companies to hire. Every time I place a candidate, I make about $20,000. So what I do is I place one person every quarter. That’s it. The rest of the time, I do anything I want. And I STILL make $80,000 every year! It’s a great life!”
What’s the moral of the story? Basically, as an agency recruiter, you can make as much money (or as little money) as you want. There are almost no limits in either direction. It’s not just about the money when you work as a recruiter. It’s also about the flexibility and the work-life balance opportunities that the profession offers to those daring enough to enter it.
Talent + commitment + time = how much recruiters can make
However, let’s say you’re one of those “crazy” types who wants to make as much money as you possibly can as an agency recruiter. (You are one of those types, right?) Well, since that’s the case, you’re going to need the three things we mentioned earlier:
- Job orders
- Qualified candidates
It doesn’t stop there, though. There are other factors that are involved in how much recruiters make. As with just about every other profession, there is one overriding factor: talent. That’s right, there is talent involved with being a recruiter. The more talent you possess, the more placements you’ll make and the more you’ll bill. It’s a rather easy equation, even for people who don’t like math.
If you want to make a lot of money as a recruiter, talent is a great place to start. However, you also need to evolve as a recruiter. You need to become better, to hone your skills, and improve your process. So in addition to clients, job orders, and candidates, this formula pretty much sums it up:
Talent + commitment + time = a TON of money
Unless, of course, you’re like Bob. What about Bob? Well, he chose freedom and flexibility over “running the rat race.”
And perhaps the ability to have that choice is the real value that a career in recruiting offers.