Looking for Recruiter knowledge

OreaM

Hello all,

I am currently working on a business plan in the recruitment field.
At this stage I know well what kind of skills I would need, what my expenses would be and what my niche and objectives are.

There is one piece I need to complete the plan and make some projections, and this can only be obtained from someone who has worked in recruitment, not in house but as a 3rd party recruiter.

My question is the following :
what are industry practices in terms of commission ? I'm looking specifically at IT companies, most likely with an international presence.

I have heard from different sources that when you provide a successful candidate the recruiter can get around 1-2 months of salary in gross commission, depending on the company. My guess is that the amount is negociable depending on your relationship with the hiring company, but a professional opinion would be much appreciated.

Graham

It must be that time of year again.

10 - 20% would be the average and it's usually subject to at least a partial clawback if the candidate leaves before 6 months.

It's a cut-throat business and your questions would suggest you have zero experience in the industry.

There's a small pile of threads where other have had a similar idea: http://www.boards.ie/search/submit/?forum=106&sort=best&date_to=&date_from=&query=recruitment+agency

Best advice you'll get - go and work for an existing agency and learn the business.

OreaM

Graham wrote: »

It must be that time of year again.

10 - 20% would be the average and it's usually subject to at least a partial clawback if the candidate leaves before 6 months.

It's a cut-throat business and your questions would suggest you have zero experience in the industry.

There's a small pile of threads where other have had a similar idea:

Best advice you'll get - go and work for an existing agency and learn the business.

Hi Graham,

Thanks for taking the time to answer.

May I ask, could you clarify the 10/20% part ? I'm aware of the clawback part, but again not in terms of amount/percentage.

To elaborate a bit :

I currently have experience with in-house recruitment and interviewing in a multinational company, having worked on volumes around 100 interviewees per month individually and much more are at a team level for a couple of years. My FOV was restricted there on pre-filtering done by agencies and our in-house HR team, thus the questions regarding commission structure.

I consider this as a vantage point in terms of identifying proper candidates and what are the usual issues you would face with the flow of candidates provided. Starting from there I also have in mind a specific niche and business model I would like to work on.

Not being defensive here, I'm just saying that I'm conscious of the information I'm missing and that's the whole point of this thread, picking some brains from experienced industry players. That may require to take someone with that kind of background onboard as a partner or consultant to start with.

I've done my homework and have a pretty good idea of who's out there I would be competing with, and I'm willing to offer something out of the usual tracks. Also, my current position being senior enough, I will not do the jump to a junior role in the recruitment industry just to learn the ropes.

pedroeibar1

Your experience is totally different to "recruitment" and in reality is confined to interviewing and hiring from a pre-selected panel. Commission structures are the most basic bit of knowlwedge, so no, I agree with Graham, you do not hve the requisite experience. Your view "I will not do the jump to a junior role in the recruitment industry just to learn the ropes" is wrong and a false economy. You would learn more and lose less by doing so.

Graham

OreaM wrote: »

May I ask, could you clarify the 10/20% part ? I'm aware of the clawback part, but again not in terms of amount/percentage.

For permanent positions the commission is generally in the 10% - 20% of first year total package value. More often than not I'd suspect at the lower - mid end of that range.

OreaM wrote: »

I currently have experience with in-house recruitment and interviewing in a multinational company, having worked on volumes around 100 interviewees per month individually and much more are at a team level for a couple of years. My FOV was restricted there on pre-filtering done by agencies and our in-house HR team, thus the questions regarding commission structure.

I consider this as a vantage point in terms of identifying proper candidates and what are the usual issues you would face with the flow of candidates provided. Starting from there I also have in mind a specific niche and business model I would like to work on.

That's useful experience, you know the process from the employers perspective.

OreaM wrote: »

I've done my homework and have a pretty good idea of who's out there I would be competing with, and I'm willing to offer something out of the usual tracks.

The problem, and this is obviously just my personal opinion is you have zero experience in the recruitment business. You have experience in the hiring business.

I might shop in Tesco every week. That might give me a really good understanding of supermarkets from a customer perspective but there's no way I'd consider my experience sufficient to prepare me to open my own supermarket and go head-to-head with Tesco/Dunnes/Superquinn.

Recruitment is essentially a sales job, a fairly aggressive sales job at that. What sales experience have you? How would you feel starting the week with a list of several hundred companies to cold call? What about your candidates, where do you plan to find them. You'll be up against companies with thousands of CVs on file.

None of those issues are insurmountable, if you have deep pockets you can buy in the talent and if you're really lucky that talent will arrive with his/her own set of contacts. You may already have your own list of industry contacts which would certainly help a little.

OreaM wrote: »

Also, my current position being senior enough, I will not do the jump to a junior role in the recruitment industry just to learn the ropes.

Pity, it's the cheapest education you could possibly get.

OreaM

Thanks both for your constructive answers, particularly the clarification regarding commission structure.

Graham, as you said my point of view is the employer/hirer perspective. And this is what I based my thought process on, over the last few years I got an overview of what works and what does not work from this point of view.

Sales experience :
I have to admit that I have no pure Sales experience. The closest I would have is a project management experience where I actually have to sell my ideas to obtain funding/sponsorship, and at the very start of it grab people's attention to get them onboard. This is the approach I'm willing to take with potential customers, with a sales pitch that is in essence the niche I would like to target. Same as where I would find my candidates, I have a pretty good idea of that point as part of the project outline. Won't elaborate more on that point as it really is the cornerstone of what I want to do. Cold calling customers ? Sure, building my customer base is a mandatory first step and I know that prospecting will be a part of it.

Both :
I don't know how you understood this, but I'm not thinking of a one-man operation. I have 2 partners on board already, one with a skill set specific to mine, one with a marketing background, and we are looking for a contractor with this specific HR knowledge to start with. I'm not Superman with an omniscient knowledge, I'm more interested in building the right team with the right tools If I was looking at a cold one-person startup, I would not even think about skipping the recruitment agency job for a start.

Again, thank you both for taking the time to answer my questions

pedronomix

This a business that is regulated abd requires a licence https://www.workplacerelations.ie/en/What_You_Should_Know/Employment_Agencies_and_Agency_Workers/. It strikes me as dreamer project when it was never even mentioned!!

OreaM

pedronomix wrote: »

This a business that is regulated abd requires a licence. It strikes me as dreamer project when it was never even mentioned!!

OreaM wrote: »

I'm not thinking of a one-man operation. I have 2 partners on board already, one with a skill set specific to mine, one with a marketing background, and we are looking for a contractor with this specific HR knowledge to start with. I'm not Superman with an omniscient knowledge, I'm more interested in building the right team with the right tools If I was looking at a cold one-person startup, I would not even think about skipping the recruitment agency job for a start.

Reading ? Please ?

pedronomix

OreaM wrote: »

Reading ? Please ?

Nah, still cant find any reference to Employment Agency Act 1971

dbran

From what I understand the license is not that difficult to get really and is just a minor cost that has to be incurred every year in order to trade. Not really a barrier to entry to the industry at all really.


Best of luck with it.

dbran

OreaM

dbran wrote: »

From what I understand the license is not that difficult to get really and is just a minor cost that has to be incurred every year in order to trade. Not really a barrier to entry to the industry at all really.


Best of luck with it.

dbran

Thanks Dbran !

Pedronomix, while I appreciate the link for regulations you do not sound extremely positive about the idea, are you working in that field by any chance ?

pedroeibar1

OreaM wrote: »

Pedronomix, while I appreciate the link for regulations you do not sound extremely positive about the idea, are you working in that field by any chance ?

Nope, the other Pedro is not in that field but would have dealt with recruiters for years. He posts his opinions based on long experience. And to be honest, (and I’m not trying to be rude) he would eat those with your approach for breakfast, had you even got in his door.

OreaM wrote: »

....Sales experience : ……..I have to admit that I have no pure Sales experience. ..........but I'm not thinking of a one-man operation. I have 2 partners on board already, one with a skill set specific to mine, one with a marketing background, and we are looking for a contractor with this specific HR knowledge to start with.

Your opening post and the one above indicate that there is a huge knowledge gap in your experience. Nor have you mentioned basics, such as Data Protection registration, and working by a code of conduct. So, IMO, you know about hiring, you have knowledge of / skills in interviewing candidates but essentially you/your colleagues are clueless on recruitment. You have come looking for advice, you’ve got honest answers.