QUESTION: Mike, fortunately right now we are buried with job orders. I am looking to hire my first full cycle recruiter and have used various sourcing resources but never hired a full-cycle recruiter. I am looking to start them off at 100% commission with a very aggressive compensation plan percentage to hopefully fill some quick orders and keep my clients happy. We have 10 great candidates that have applied to the company. How would you structure the offer? – Jack, Boston, MA
ANSWER: First of all, for anyone who is still thinking that no one is hiring, this is proof that recruiters who are doing the work are getting openings. I think within our client base most people are back to, maybe not quite January, February, I do not want to be that bold, but good enough to really be able to bill at a very high level going forward.
I hate straight commission. Without knowing your situation other than what you wrote, Jack, my advice would be to use this as an opportunity to start to scale your business. My gut feeling is, if you are really busy now, that it is probably not going to stop. It is only going to get better from all the things we are hearing about companies posting earnings and things like that.
This is an amazing opportunity to begin to scale your business. We teach a model called search associate or recruiting coordinator, which are the same thing. In a very structured way, you bring on somebody, virtually or in your office, who does not have to have any experience in recruiting. You are going to have them learn the process of recruiting with some of those searches that are maybe a training ground, not the highest priority, maybe not exclusive contingency, maybe the lower fee ones, the openings that are fillable but that you do not have time to get to because you are going to focus your time on what is very close to cash, the greatest likelihood of placement.
You just train them on your approach for how to make the call or email to the candidate, how to vet, screen, and assess them, and then have them bring those candidates to you. From there you challenge them as a hiring manager would challenge on why this candidate should be interviewed. As them to tell you about skill A, skill B, skill C, skill D that is outlined in the search assignment form.
When someone is brand new, I would do the final vetting of those candidates, meaning I would call up and validate what the recruiter told me was true. When you do that for two or three weeks, you start to find complete alignment with the recruiter and candidate, you can stop calling the candidates.
This is how you create more time in your business. If you have two or three recruiters at this level, you can now act as an air traffic control on submitting, prepping, closing, getting involved at the offer stage, and developing maybe even new and better openings. That is exactly how my firm grew from about $300,000 in revenue to $3 million in less than three years.
This system works really great when you hire people without recruiting experience, that has a passion and a desire to do something new and different in their career. In terms of compensation, my plan consisted of a base salary of $30,000 to $40,000 plus commission. If they work on your stuff, you pay them 5% of the first $30,000 per quarter, 10% of the next $15,000 per quarter of the entire fee in addition to the base. You pay them 15% over $45,000 in a quarter. Trust me, I have already done the math. It ends up being about a 25% cost of a sale that they develop.
If you bring on people straight commission, you have to overpay, you have no control over quality, quantity, or discipline, and you train them to compete with you. I hate straight commission deals because when I go to conferences when I meet owners, what do they do? They tell me they have a straight commission plan and their best biller left. When I talk to the big billers that leave, they go, “Well, you know, geez, Jack was a great owner and really taught me the business, but after a couple of years, what am I really getting for my 50% or whatever the compensation plan was? In my structure, I never lost a big biller. As they develop their skills in six to 12 months’ time, you can promote them and teach them how to develop their own accounts, having been mentored by you. Those people transition incredibly well.
Our Platinum program teaches how to scale your firm the right way if that is something that you are at all intrigued about. Going through that process, we will walk you through step by step, how to interview them, how to assess them, how to pay them. We have compensation plans, how to onboard them, how to hold them accountable. That is the other key piece. You have to hold them accountable for very specific actions.
You can just email firstname.lastname@example.org and just put “Intrigued about Platinum” and somebody on our team will reach out to you to see if or how we can help.
Thank you so much for that question.