How Much Do Recruiters Make?: Salary vs Commission
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Becoming a recruiter has been attracting the interest of many job seekers or career switchers over the last couple of years. And, obviously, for someone who’s thinking about stepping into a career where they’ll spend most of their time matching people with their ideal job, it makes sense they’d like to start doing that for their own career choice.
Let’s talk money
Now, as with any other job, income is a big part of the final decision. Yes, the benefits of becoming a recruiter can be great and plenty, but how much do recruiters make? According to Indeed, the average salary for a recruiter in the United States is $49,236 per year (as of September 18, 2021).
However, if you go browsing the Internet for answers you will surely find many other sources with various different results for the national average, from $34,000 to $60,000 yearly. While you can analyze all that data and get an idea of how much recruiters make, this may not be all the information you need to know what your earning potential as a recruiter could be.
How much you can make as a recruiter depends on things such as the location and industry you work in, and whether your income will be salary or commission-based. The last is probably the most relevant factor, and probably the reason why you’ll find many sources giving such varied information. So, here are a couple of things you should keep in mind when it comes to both scenarios.
Salary vs commission
Salary-based recruiters
First, though you are probably interested in the recruitment industry because you think you could be great at matching people with companies, you have to know that there are different ways in which you can make a living out of it. If what you are looking for is having job stability with a fixed salary, then your two main options are either to work as an in-house recruiter or for a staffing agency that offers a base salary.
The first option is great if what you are looking for is to stay with the same company placing people according to their turnover or expansion needs and within one specific industry. Still, you should be aware that some small or medium companies that look for an in-house recruiter will likely merge recruiting with HR tasks. Usually, it’s large or growing companies that’ll have the need for an all-hands-in recruiter. This is great because you’ll likely be offered a far more competitive income.
Staffing agencies, on the other hand, can also provide you with a base salary and add commissions on top of that. This might work for your income goals, depending on the agency’s commission plan. Sometimes, when there is a fixed salary in the mix, agencies can offer an unattractive base salary or limit the scope of their commissions.
Commission-based recruiters
If you want to earn money via commissions, then you should probably look into being a freelance recruiter or working for a staffing agency with a great commission system. This is probably more your style if you consider yourself to be a high-performer who is self-driven and enjoys making money based on your own results.
With commissions, the more you put into it, the more you get out of it. But once more, you need to dig into how you get paid and what the commission is based on. Some agencies work upon the number of deals you close in a specific period of time. The problem with that is that you might be spending your time wearing yourself out making as many matches as possible simply trying to reach a number.
A kinder and far more reasonable commission plan, for everyone involved, is probably one that’s based on a fixed percentage. For most staffing agencies their fee for a job order is a percentage of the new hire’s gross first-year income. From that fee, recruiters are paid a fixed percentage.
So it’s up to the recruiter whether they spend time matching many job orders with smaller fees or placing one person at a C-level role for a larger fee. This means that, with commissions, you can definitely make bank beyond the average.
An even better deal is when staffing agencies increase your compensation based on your growth. For example, at gpac, after crossing $150,000 in net cash-in, your percentage goes from 30 to 50%, and then up to 75% once you cross $500,000 in net cash-in.
So, which should you choose?
It all comes down to what you value most and the way you like to work. Getting paid a fixed salary in-house can be good for someone who values stability and routine or would rather specialize in a specific or niche industry. Just keep in mind that there will always be a cap on your salary regardless of your performance.
But for people who would rather be rewarded based on their results, either working for a staffing agency or becoming a freelance recruiter might be right for you. Though as a freelancer you have even more freedom on how much you make, joining a staffing agency provides you with far more resources, such as training and a large network, that can help you accelerate your earning potential.
With so many options the choice is in your hands. And if you are committed to becoming a recruiter there is no wrong one, you can always try a different recruitment path later on. Just keep working on your skills and you’ll kill the game.
