Do recruiters get commission?

Yes, recruiters get commission. However, this only applies to external recruiters; internal recruiters at an organization do not receive a commission.

Internal recruiters are recruiting professionals who work within a specific company or corporation. They tend to be compensated by annual salaries rather than commissions. Internal recruiters are often found in the human resources (HR) departments of organizations.

External recruiters are either independent contractors or work for recruiting agencies that contract with companies to provide recruitment services. External recruiters get commissions. This happens through placement fees via a commission structure.

External recruiters often have the ability to earn more than their internal counterparts because they can receive commissions.

There are three different types of commission structures that relate to recruiting:

• Contingency

Contingency structures are used to pay recruiters after they have completed specific jobs. These usually involve metrics, such as the amount of time a new hire stays at a company.

An example of this would be when an external recruiter signs a contract stipulating that they will receive compensation equal to 40% of the base salary of each role that they fill if the employee they place in the role stays for at least 60 days or more at the company. Percentages of base salaries can vary, and this is just one hypothetical scenario.

In this structure, the external recruiter is often pitted against the company's own internal recruiters in its human resource department. This can often benefit both internal and external recruiters by increasing their motivation and incentivizing them to bring on more new qualified hires.

• Retainer

A retainer is a recruiter commission structure that sees an organization paying an external recruiter before they accomplish the company's recruitment objectives. This can be beneficial if an organization does not want the external recruiter to compete against its own internal recruiters.

It also allows the external recruiter to focus on finding the appropriate candidates and not worry about meeting any quotas.

In this type of structure, the commission is also usually based on the salaries of the roles that the external recruiter sells. They might receive 30% to 50% of the base salaries of any filled positions.

• Container

The last type of commission payment structure for external recruiters is a mixture of both the contingency structure and the retainer structure. This arrangement often sees organizations paying external recruiters half the commission, also referred to as an engagement fee, before the external recruiter has begun its recruitment services.

This structure also follows the method of basing commissions on percentages of salaries for roles filled.