Beyond Salaries - Compensation Plans for Recruiters

QUESTION: I am looking at expanding our recruiting team. What different compensation packages attract great new recruiters?

The Unconventional Approach to Hiring Recruiters

Without context, I do not hire people; for the most part, 99% of the time, I do not hire people with recruiting experience. I have always been brought up, and I fully believe, and I have tested it, that I would rather train than re-train. This approach, while unconventional, has proven to be effective. Hiring experienced recruiters—I am not saying never, but it is not likely for me.

Challenges with Experienced Recruiters

Usually, in my experience of interviewing them, they have horrible habits. They have horrible habits on activity levels. From my quality standards, the way they talk to candidates and to employers was tired and old and just to re-train all of that took more effort than taking a fresh and clean slate. I do not care. That person could be 21 to 91. I have hired people across that spectrum age-wise. I look for energy level, curiosity, and perhaps most importantly, passion.

Understanding Base Salaries and Geography

I was on a group call earlier today with our Board Room level clients, firms in the $2 to $4 million revenue range. A lot of what we talk about in that group is scalability and hiring. We are seeing a lot of people right now offer base salaries, depending on your geography, like Atlanta or New York metro are going to be more challenging than other parts of the country, of $35,000 to $50,000, even up to upwards of $60,000 as a base salary, not a draw versus commission.

If you pay somebody a $4,000 a month draw and they quit, or you fire them in 60 days, and they have yet to make a placement, you are still out $8,000. You might as well call it a salary.

Comprehensive Compensation Plans

The counterbalance to that—and I am not saying to increase your cost of sales—is that you change your commission structure. On a base salary like this, which is just a ballpark of $50,000, I would only pay them 10% of their first $50,000 in production for the quarter. Then I would pay them 30% to 35% over that.

With our clients, we are coaching them that their plans should top out at about 35%. However, as part of the total compensation plan, you want to be able to offer healthcare. They might contribute part of it. You want things like a 401(k). If there are industry conferences and stuff like that, you want to send them to those, and you pay for it.

Where I see the biggest challenge with recruiting firm owners that want to scale is that they want to do it on the cheap side.