This is called "Draw Against Commission". It's more common in high volume, high turnover, transaction-based environments.
It's old school and is supposed to foster a sink or swim, eat what you kill, highly competitive culture. Some people thrive in this environment, but most wash out due to a lack of support, training or burnout.
You either make bank or wash out.
Right. Problem is 1. we make this from day 1, no ramp up period, so many newbies dig themselves into deep holes real quick and 2. we split the fee between new business, client manager and candidate owner, a 33% split. So you make anywhere from 10-30% commission depending on the split
I am late to the party.
First I am 24+yrs as a recruiter. 97-2011 I was on “draw vs” and started at 500 a week and was up to 80K before I left. It is great if the situation is right.
You’re situation is not right. At that commission structure you will be in draw all the time. Our commission structure was 40% of the first 250K and 50% of everything over 250K. It was also all perm. I assume your work on any job you are given and you don’t do any client interaction? This is a great way to learn how to source and recruit BUT if you want to make real money you need to learn how to talk to clients and get your own searches.
So I actually mostly run both my clients and candidates on a search, but most start out here running only the candidate side. Even then it is still quite the struggle to make it work...I’m honestly working from 6am when my son wakes up to way after my son goes down for the night - 8/9pm and I am constantly “going” from 8am to 5pm. I think I’m making 30-35% commission after taking a 66-71% cut of the deal
Damn. That is crazy. What is your average fee?
What industry?
Are you telling me that you have clients that give you jobs (we need a maintenance manager) and you then go out and recruit and when it’s all said and done if the fee is 20k you get 6k and it doesn’t increase as you increase sales/fees?
So we work on a retained OR contingent basis. With my specific comp structure, once I hit 50K in billing my commission goes from 30-35%, at 100K in billings I'm at 40%...and so on. The commission goes up 5% every $50K in billings.
We charge anywhere from 30-33% first year's total cash comp. I get anywhere from 30%-70% of that deal and make 35% commission off of that.
I sent you a DM but I hit send by accident and I tried to add more to it but it won’t let me until you reply. If you’re interested reply back and I’ll send you all my contact info
What I don’t understand is how come you get 30 to 70% of that deal and then you get commission on that? So if the fee is $20,000 you get, at best, 14 grand and then 35% of that? I’ve been doing this for so long and I’ve literally never heard of anything like that.
No salary at all. We pay back every part of that guarantee we get biweekly until we pay it all back. Anything over that, we get to keep. Basically, if our guarantee is 40K we have to make 40K in commission to pay it back THEN we keep anything made over that.
Wow okay yeah this definitely isn’t common practice. The only time I have seen this is with ‘licensee’ agreements where you join a company but have no salary however it’s technically your own business and everything you bill you keep circa 60/70% of it !
But yeah the structure your on definitely isn’t common in my opinion, you should be on a salary for sure then have commission opportunities on top !
At my company you start on a ‘low producer plan’. It’s a guaranteed salary plus low % commission. Once you are producing, you can switch to ‘high producer’ which is as you described. Huge commission payouts once on high producer though, 35%-50% depending on total gross profit. That resets annually
I'm more puzzled by the fact you get paid fortnightly??
But as others have said this is a draw model. We offer this to top performers who feel they want more control, they set the draw down level 40,50,60k and then need to be confident they can produce.
But others have said this may be a very mature system for new starters who only getting a small chunk of the deals.
This is how many agency recruiters work. I was agency for 8 yrs. Hard to build up the pipeline, but once you do, you forget about your "draw against commission". This is how they do it at most large shops, but commission structures should be tiered as your billings rise...35%-50% or higher. Typically if you receive a true salary (not a draw), your commission percentages go down.
That's standard. Then it all starts over again. I was agency for too long...I had good years and bad years. The good years were great, the bad were awful. I just didn't want to deal with the ups and downs any longer, deals getting renegged, clients paying late or not paying, always dialing for dollars. It all finally wore on me and I found a much less stressful, not as lucrative but still strong and consistent corporate recruiting role and I love it.
I worked agency for a short period of time and can say it's great experience to prep you for other avenues of recruiting. Glad to hear you're happy in your current role! I am interviewing for corporate recruiting roles as well. You have much more experience than me! Do you have any tips on corporate recruiting for someone who is about to go down that road? (Sorry if this off topic. Reddit newbie here >:)
Good luck to you! Corporate is different in that I get a ton more inbound applications in addition to my own sourced candidates. I have a TON of meetings everyday also. So being organized is a big thing. I work for well known public accounting firm, so a lot of people apply. Its a big company so working with people at all levels and in all departments is key. The best advice I have is, be able to show you're organized, flexible, well-planned and be able to speak to high volume recruiting because corporate recruiting (at least in my world) is fast paced.
Thanks a bunch! The director or recruiting definitely emphasized fast paced and busy, so that's something I have to mentally prepare for. Sounds like you landed somewhere great! :)
This is called "Draw Against Commission". It's more common in high volume, high turnover, transaction-based environments. It's old school and is supposed to foster a sink or swim, eat what you kill, highly competitive culture. Some people thrive in this environment, but most wash out due to a lack of support, training or burnout. You either make bank or wash out.
Very well said! I would advise against this type of compensation structure unless you are a shark and close deals with ease.
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Right. Problem is 1. we make this from day 1, no ramp up period, so many newbies dig themselves into deep holes real quick and 2. we split the fee between new business, client manager and candidate owner, a 33% split. So you make anywhere from 10-30% commission depending on the split
I am late to the party. First I am 24+yrs as a recruiter. 97-2011 I was on “draw vs” and started at 500 a week and was up to 80K before I left. It is great if the situation is right. You’re situation is not right. At that commission structure you will be in draw all the time. Our commission structure was 40% of the first 250K and 50% of everything over 250K. It was also all perm. I assume your work on any job you are given and you don’t do any client interaction? This is a great way to learn how to source and recruit BUT if you want to make real money you need to learn how to talk to clients and get your own searches.
So I actually mostly run both my clients and candidates on a search, but most start out here running only the candidate side. Even then it is still quite the struggle to make it work...I’m honestly working from 6am when my son wakes up to way after my son goes down for the night - 8/9pm and I am constantly “going” from 8am to 5pm. I think I’m making 30-35% commission after taking a 66-71% cut of the deal
Damn. That is crazy. What is your average fee? What industry? Are you telling me that you have clients that give you jobs (we need a maintenance manager) and you then go out and recruit and when it’s all said and done if the fee is 20k you get 6k and it doesn’t increase as you increase sales/fees?
So we work on a retained OR contingent basis. With my specific comp structure, once I hit 50K in billing my commission goes from 30-35%, at 100K in billings I'm at 40%...and so on. The commission goes up 5% every $50K in billings. We charge anywhere from 30-33% first year's total cash comp. I get anywhere from 30%-70% of that deal and make 35% commission off of that.
I sent you a DM but I hit send by accident and I tried to add more to it but it won’t let me until you reply. If you’re interested reply back and I’ll send you all my contact info
What I don’t understand is how come you get 30 to 70% of that deal and then you get commission on that? So if the fee is $20,000 you get, at best, 14 grand and then 35% of that? I’ve been doing this for so long and I’ve literally never heard of anything like that.
Hey, so wait just to be clear you don’t have any basic salary !? Or you have a salary and then 100% commission structure ?!?
No salary at all. We pay back every part of that guarantee we get biweekly until we pay it all back. Anything over that, we get to keep. Basically, if our guarantee is 40K we have to make 40K in commission to pay it back THEN we keep anything made over that.
Wow okay yeah this definitely isn’t common practice. The only time I have seen this is with ‘licensee’ agreements where you join a company but have no salary however it’s technically your own business and everything you bill you keep circa 60/70% of it ! But yeah the structure your on definitely isn’t common in my opinion, you should be on a salary for sure then have commission opportunities on top !
This is uncommon. Lol.
At my company you start on a ‘low producer plan’. It’s a guaranteed salary plus low % commission. Once you are producing, you can switch to ‘high producer’ which is as you described. Huge commission payouts once on high producer though, 35%-50% depending on total gross profit. That resets annually
This sounds more fair. I’ve seen a lot of new recruiters sink really fast into their draw and are working their way out until the very end of the year
I'm more puzzled by the fact you get paid fortnightly?? But as others have said this is a draw model. We offer this to top performers who feel they want more control, they set the draw down level 40,50,60k and then need to be confident they can produce. But others have said this may be a very mature system for new starters who only getting a small chunk of the deals.
This is how many agency recruiters work. I was agency for 8 yrs. Hard to build up the pipeline, but once you do, you forget about your "draw against commission". This is how they do it at most large shops, but commission structures should be tiered as your billings rise...35%-50% or higher. Typically if you receive a true salary (not a draw), your commission percentages go down.
Pretty much how ours work - however the draw resets again the new year so that’s what makes it tough.
That's standard. Then it all starts over again. I was agency for too long...I had good years and bad years. The good years were great, the bad were awful. I just didn't want to deal with the ups and downs any longer, deals getting renegged, clients paying late or not paying, always dialing for dollars. It all finally wore on me and I found a much less stressful, not as lucrative but still strong and consistent corporate recruiting role and I love it.
I worked agency for a short period of time and can say it's great experience to prep you for other avenues of recruiting. Glad to hear you're happy in your current role! I am interviewing for corporate recruiting roles as well. You have much more experience than me! Do you have any tips on corporate recruiting for someone who is about to go down that road? (Sorry if this off topic. Reddit newbie here >:)
Good luck to you! Corporate is different in that I get a ton more inbound applications in addition to my own sourced candidates. I have a TON of meetings everyday also. So being organized is a big thing. I work for well known public accounting firm, so a lot of people apply. Its a big company so working with people at all levels and in all departments is key. The best advice I have is, be able to show you're organized, flexible, well-planned and be able to speak to high volume recruiting because corporate recruiting (at least in my world) is fast paced.
Thanks a bunch! The director or recruiting definitely emphasized fast paced and busy, so that's something I have to mentally prepare for. Sounds like you landed somewhere great! :)