If you're considering a career in recruitment but are unsure if it's going to be the right move money wise, keep reading.
Getting paid as a recruiter isn't as straightforward as other jobs where you might have a set salary and that's that, but it is extremely rewarding nevertheless. There are external factors and extenuating circumstances that come into play. We're going to be discussing how it pays to be an external recruiter.
External recruitment is where the company offering job openings hires recruiters outside of their company to fill them. It usually pays more than being an internal recruiter, where you hire from within the company.
What does a recruitment agency do?
Recruitment agencies work directly with companies to help them fill job vacancies by searching and selecting candidates that are perfect for the role. They're often at the heart of the job seeking process, by assisting in editing and optimising CVs, preparing candidates for interviews and looking for new and exciting opportunities.
If a company approaches a recruitment agency with an opening, they can then scour their own database for relevant candidates. If that falls through, Plan B is to post the opening online and wait for the applicants to roll in.
Put simply, recruiters work to fulfill the needs of both the job seeker and the employer.
How will I be paid as a recruiter?
There are two ways in which a recruiter can get their dollar - either on a contingency basis or retained basis, and the fees differ between each one. Both of these types of fees only apply when the vacancy in question is permanent, not temporary. Let's explore these.
Job seekers themselves will never be charged money to sign up for help from an agency. So you're not getting pennies from them, the money comes in elsewhere.
Whilst there's no payment directly from the candidate, there is a fee provided by the employer that hires the candidate. This fee is dependent on the candidate actually accepting the job offer, and their initial success on the job. In the industry, this is referred to as a ˜contingency fee' So, you just have to keep your fingers crossed that you found the right person!
This type of payment will often result in recruiters hiring candidates a lot quicker, as it's a competition to who can find the most suitable candidate first.
How much are contingency fees?
Standard contingency fees will be 15-20% of the candidate's starting annual salary. For example:
- A candidate's first year salary is £40,000
- 15-20% = £6000-£8000
The agent will not necessarily receive this payment as soon as the candidate has been placed in the role, it may take a month or two.
If a recruiter is working on a retained basis, this means that they will actually receive an upfront payment from the company to carry out the candidate search, instead of waiting until the candidate is actually placed.
But it doesn't stop there. There will actually be another two payments made to the recruiter, let's find out what they'll be...
Contrary to working on a contingency basis, the job search for the particular vacancy will be exclusive to that recruiter. It won't be a rat race to the finish line because only one agent will be in charge of that account.
It also means that they can take their sweet time with the process (especially as they've already received a fee) and can actually provide the company with a shortlist of multiple candidates, for them to then pick the one they like the most. This is when the second payment is made! Yes, that's right, there will be a fee for providing a shortlist.
The third fee will come along once the candidate is placed.
All in all, recruitment is a very rewarding career path when it comes to finances, and also extremely motivating! We're always looking for some extra talent here at Vertex Resourcing, so don't hesitate to get in touch or check out our Careers.
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