Talent Acquisition Timebound

Just How Much Do Agency Recruiters Earn?!

Ever asked yourself why so many young and talented men and women end up in agency recruiting? What attracts them to the long hours and chasing people for a living?

Having somebody find you a position, coach you through an application process and negotiate an offer seems like a great service. Especially since you get it free of charge. The beauty for candidates is that agency recruiters charge their clients a fee. This is often a win-win-win situation; you get the job, the recruiter gets the placement (and fee), the client gets a new member of staff.

Does the recruitment fee affect my salary?

The answer to that is generally no. The salary you get is the same as you would get without the recruiter, it is in the interest of your new employer that you are happy with the salary today and moving forwards. Having said that, the fee can sometimes affect you chances of getting an interview in case there are direct (free) applicants of your caliber in the running.

Does the recruiter make money if I decline the offer?

There are strict terms & conditions in place, should you take a job and then leave in the first week, the fee generally won’t be paid. The placed candidate typically needs to stay in the job 3-6 months for the fee to be safe and for the recruiter to sleep well at night. Some have noticed that the person who helped you find a job takes an active interest in you and your on-boarding, speaks to you regularly for the first months and then you never hear from them again (unless they need something from you of course). In the rarer case, the recruiter has been retained by the client to perform the search and they will still get some payment in spite of you dropping out.

How much do they make?

A standard contingency placement is worth anything from 15-25% of the candidate’s total (basic & flexible) first annual salary. A retained search assignment can be charged up to 50% in extreme cases when it’s a senior position and the role is hard to fill. You do the maths yourself. Also consider that good recruiters will make a number of placements every month.

Are they really worth it?

Yes and no. I believe some placements would happen without a facilitator, through simple advertising, social media or the internal HR department. The problem is defining the right processes and having the right people to perform this (closing the actual deals). This is why the job market is so ineffective. Some jobs certainly won’t be filled by themselves, especially niche and senior ones. When a company is haemorrhaging cash due to lack of a certain competence, the recruitment fee is worth every penny.

Related: Do You Expect Too Much from Recruitment Agencies?

By Jörgen Sundberg

Founder of Undercover Recruiter & CEO of Link Humans, home of The Employer Brand Index.