What is Recruiter Commission?
Recruiter commission is an amount paid to a recruiter or recruitment agency for their efforts in finding suitable candidates for a company's open positions. Think of it as a finder's fee that rewards recruiters for connecting job seekers with employers.
Understanding recruiter commissions helps companies budget properly and negotiate better deals. For recruiters, knowing commission rates ensures fair compensation for their work.
How to Calculate Recruiter Commission
Formula
[\text{Recruiter Commission} = \frac{\text{Employee's Annual Salary} \times \text{Commission Rate}}{100}]
Where:
- Employee's Annual Salary is the gross annual salary of the employee
- Recruiter Commission Rate is the percentage rate agreed upon between the recruiter and the hiring company
Calculation Example
Let's work through an example:
- Employee's Annual Salary: $50,000
- Recruiter Commission Rate: 20%
Using the formula:
[\text{Recruiter Commission} = \frac{50000 \times 20}{100} = 10000]
The recruiter would earn a commission of $10,000.
| Metric | Value |
|---|---|
| Employee's Annual Salary | $50,000 |
| Recruiter Commission Rate | 20% |
| Recruiter Commission | $10,000 |
Industry Benchmarks
Commission rates vary by role type:
- Entry-level positions: 15-20%
- Mid-level positions: 20-25%
- Senior/Executive positions: 25-33%
- Highly specialized roles: Can exceed 33%