How Much Do Recruiters Get Paid?

Recruiters play a vital role in helping companies find qualified candidates to fill open positions. But how do recruiters get paid and compensated for their services? In most cases, recruiters earn their income through placement fees, which are based on a percentage of the candidate’s first-year salary when they successfully fill a position.

The Role of Recruiters

Recruiters act as a bridge between employers looking to fill vacant roles and qualified candidates looking for work. They utilize various sourcing techniques to identify suitable candidates, screen resumes and applications, conduct interviews, check references, and ultimately connect employers with top talent.

For difficult-to-fill or highly specialized roles, companies frequently turn to external recruiting agencies and staffing firms like Expect Technical Staffing to source candidates with niche skill sets or experience. Relying on specialized recruiters allows HR departments to focus their efforts on other priorities.

How Recruiters Get Paid?

The majority of recruiters receive payment through placement fees charged to the hiring company. Fees are only earned if the recruiter successfully finds a candidate who accepts the job offer and starts work.

Placement Fees

Placement fees are typically based on a percentage of the candidate’s first-year salary. Common placement percentages range from 15-30%, depending on the level of the role, difficulty in filling the position, and availability of qualified candidates.

• For lower-level roles like technicians that are easier to fill, the placement percentage is usually 15-20%.
• For mid-level professional roles that require more qualified candidates, like engineering positions, the percentage increases to 20-25%.
• For hard-to-fill, executive and senior-level roles, placement fees at the higher end of 25-30% are common.

Higher placement percentages help account for the increased time and difficulty required to recruit for specialized or senior-level positions.

Also Check: Information Technology Recruiters

Calculating Placement Fees

To determine the placement fee amount, the agreed-upon placement percentage is multiplied by the candidate’s starting salary.

For example, if a recruiter fills an engineering position with a 20% placement fee, and the hiring salary is $100,000, the placement fee would be:

• Placement Percentage: 20%
• Candidate Salary: $100,000
• Placement Fee = Salary x Percentage
• = $100,000 x 20%
• = $20,000

So the recruiter would earn a $20,000 placement fee for successfully filling this position.

Retainer Fees

In some cases, recruiters may charge a retainer fee upfront before beginning an extensive search. Retainer fees help cover the recruiter’s time invested in sourcing candidates for hard-to-fill roles at a company’s request.

Expect Technical Staffing may charge retainer fees ranging from $1,000-$3,000 per position when operating at capacity in order to balance workloads across clients. Once a candidate is successfully placed, the retainer fee is credited back on the final placement invoice.

What Impacts a Recruiter’s Fees and Earnings?

Several factors influence how much a recruiter ultimately earns, including:

• Placement Percentages: As discussed above, higher placement percentages are charged for more specialized or hard-to-fill roles. Difficult searches demand more work and result in higher fees.
• Candidate Salaries: The higher the salary a recruiter negotiates for a placed candidate, the higher their overall placement fee. Experienced recruiters develop expertise that allows them to source higher-caliber candidates.
• Time Invested Per Search: Some niche or executive searches can take months before the right candidate is found. Recruiters only earn fees upon successful placements, so their hourly rate net of time invested can vary.
• Resume Campaigns: Many times recruiters need to create resume campaigns on job posting sites. Using these sites are a cost of doing business that can reduce the net earnings for a placement. Recruiters may choose to include this cost into their invoice for services completed.

Finally, the exact income for any recruiter depends upon their effectiveness at making successful placements, especially for difficult positions commanding higher salaries and placement percentages.

But top recruiters at recruiting agencies can earn comfortable six-figure incomes by leveraging their expertise.

The Benefits of Working With a Specialized Recruiting Agency

While companies certainly can attempt to recruit candidates independently without paying placement fees, the reality is even large HR departments with considerable resources struggle to fill highly complex or niche roles. Attempting these challenging searches on their own can drain HR staff’s time and focus.

Most commonly, Experienced recruiters have also honed evaluation skills to extensively pre-screen candidates, ensuring cultural fit and exceeding qualifications to present the very best match for position needs. That’s why specialized recruiting agencies like Expect Technical Staffing are commonly hired for hard-to-fill positions.

Conclusion

Professional recruiters have the potential to earn good incomes, especially in specialized search firms, by showcasing their ability to consistently fill critical roles other methods cannot. Their access to passive candidates and procurement efficiency provides real value to employers focused on securing top talent.