INNERGISE!

One of the ongoing battles I have always had with myself is understanding the reward and remuneration difference between recruiters and sales people within a recruitment organisation and why salespeople tend to earn far more than recruiters.

Now that the recruitment playing fields have changed so significantly during and since the conclusion of the UK recession last year, this question is becoming even more prevalent for me. In a recent article I went into some detail around how the markets for recruitment organisations have and will continue to evolve. The “Turning Point” I referred to in the article is upon us and the volume of job requirements is now greater than the availability of quality, skilled candidates and so the identification, attraction and engagement of these candidates is and will continue to be even more significant for recruitment businesses in the future. 

I recently read through Bullhorn’s insightful 2014 UK Recruitment Trends Report, which has got me thinking even more about this.

Three key points I noted from the report are these:

• In the UK, recruiters earn 30% less than salespeople
• The single most important metric for recruitment organisations was the total number of placements they made
• 77% of UK respondents generated 50% or more of their revenue from repeat client business

There are a number of ways you can translate what this means, but to me I can’t help thinking that there is some irony in the fact if that placement numbers and repeat business are the significant drivers of a recruitment organisation, both of which can be aligned quite easily to the quality of a resourcer’s activity, then why are recruiters deemed to be 30% less important?

Of course, placements and repeat business are influenced by the quality of the clients and the roles brought on by salespeople and the “depth” of their negotiations and client penetration, but in light of a market that is now so heavily candidate driven, the impact a recruiter can have on the profitability of a recruitment organisation continues to grow in significance.

With average hit rates (number of starts, divided by the number of candidate submissions x 100) sitting at around 39%, according to Bullhorn’s trends report, the quality of a recruiter’s activity and their ability to increase hit rates through better recruitment practices is hugely important. 

It doesn’t take a genius to calculate what the impact of reducing the current average submission per hire of 4.5 by just 10% would be to the bottom line of most recruitment organisations over a 12 month period.

In this new era of recruitment, I think it would therefore be prudent to consider how we are remunerating and rewarding both salespeople and recruiters, and to look towards evolving a strategy that creates more parity between the two and places greater importance on the fundamental objective of a recruitment company’s business, that finding and placing high quality candidates, which if done right, will lead to more referrals and repeat business anyway.