There are a lot of misconceptions about a recruiter’s salary. Some believe that recruiters earn a base salary and maybe a bonus sprinkled in from time to time, and that is all they can make. But in truth, recruiters have more earning potential than what people often realize.
Depending on the choices the recruiter makes in their career path, the compensation for a recruiter is unlimited. A skilled, eager, and hard working recruiter can craft an incredibly successful career from their efforts.
What do recruiters do?
Recruiting is not for everyone. A recruiter’s main goal is keeping a company filled with great people who share the company’s mission and goals. This brings a lot of pressure to fill roles quickly with high quality candidates.
Even though all recruiters’ mission is the same, not all recruiters are alike. Recruiters can be separated into two buckets depending on where and who they work for: internal recruiters or external recruiters.
Internal recruiters can be found in companies of all sizes. They are employed by the company and work within the HR department, reporting to a vice president of talent or director of human resources. Their primary goal is to hire quality full-time employees for the company.
External recruiters are normally agencies or independent recruiters. They are not a part of the company and are brought in for the temporary purpose of filling a role that the company itself cannot fill. External recruiters focus on hiring full-time, part-time, seasonal and contract workers. Agencies or independent recruiters can be more specific to job functions, such as engineering, marketing, finance, or operations. External recruiters can also be more specific to job industry, such as SaaS, healthcare, manufacturing, or consumer goods.
How much do recruiters get paid?
Recruiters can potentially earn over $200,000 a year. Tech recruiters that help companies hire high-paying, technical positions are among the highest earners. There are a number of factors that influence how much a recruiter earns, including whether they are an internal or external recruiter.
How Internal Recruiters Make Money
For internal recruiters that are on a company’s payroll, they are normally paid a salary (plus some companies offer placement bonuses). The range for a full time recruiter can be as low as $37,000 per year to a high as $170,000 for Director of Talent and other higher-level positions. According to Glassdoor, the average base recruiter salary in the United States is $52,657 yearly. In more competitive markets like San Francisco and New York City, the average salary is closer to $80,000 per year.
The recruiter’s experience, their ability to find quality candidates, their industry and the bonus program the company implements all influence how much that recruiter gets paid.
When negotiating salary with a company, the recruiter can leverage the location of the company and the cost of living, the size of the company and their experience with a specialized job function.
Internal recruiters can also work for the company’s HR recruiting team on a contractual basis, offering specialized skills for attracting the type of help the company is looking for. With this arrangement the recruiter can negotiate their own rate. According to allBusiness, “contract recruiters usually charge an hourly rate ranging from $75 to $150 per hour.”
How External Recruiters or Recruiting Agencies Get Paid
The earning potential for external recruiters is typically higher than in-house recruiters. On average, external recruiters earn $51,000 according to Glassdoor’s findings, but have the potential to earn in excess of $200,000 per year. The drawback here is that external recruiters or recruiting agencies often have to drum up their own new business – without Betterleap this can require spending hours on business development each month.
Another thing to consider is that external recruiters can often be competing with other recruiters. If their candidate is not selected or does not take the role, the recruiter does not get paid. One of the benefits of working with Betterleap is that you’ll have exclusivity with your client, so you won’t have to compete with other recruiters on our network.
Recruiters who work for an agency earn a base salary, much like internal recruiters, plus a portion of the placement fee that the agency collects from the company. The recruiter’s earnings are normally between 30%-60% of the placement fee charged to the company. This payment structure can add up fast if a recruiter places more than one or two high salary positions every couple of months.
The commission is not always paid right after an employee is placed, and there can be a 30 to 90 day delay in payment. In instances with delayed commission, the company often wants to make sure that the new employee is a good fit.
If the candidate an external recruiter presents is accepted, the recruiter gets paid a commission. On average, a fee of 20% to 30% of the employee’s yearly salary would be billed to the company and paid to the recruiter as commission.
For a placement of an executive whose salary is $200,000, the external recruiter or agency would bring home $40K-$60K for filling that position.
Let’s do a little math. Let’s say a recruiter at an agency fills five positions, each with an annual salary of $120,000. The agency charges a 20% placement fee for each filled position, which totals $120,000 for all five positions.. The agency in this scenario keeps 50% of those earnings, and pays the recruiter who made the placements a total of $60,000. In some cases, this placement bonus is in addition to the base salary that you already earn.
If the recruiter is able to place a larger number of candidates with companies, they can easily push their salary up to $200,000 and beyond.
Recruiter Career Paths
There are a range of positions available for people getting started in their recruiting careers. Most young recruiters start as recruiting coordinators or other entry-level recruiting positions. These entry level positions provide opportunities to gain hands-on experience alongside more experienced co-workers and mentors. It can take time to master the craft and build a network, but once a recruiter builds a strong network of candidates, there are plenty of ways to increase their salary.
How can recruiters increase their salary?
- Specialize in a job function. Having a core knowledge of the type of individuals that thrive in one or two job specialties improves the recruiters ability to locate top talent. Choosing the right market and right industry is key. Specializing in a niche like product, coding, or design can drive up your earnings.
- Earn certifications from The Sociality of Human Resource Management (SHRM) or from Human Resources Certification Institute (HRCI). These certifications can show that you have the base knowledge of the industry and shows your dedication.
- Be a top performer. It is not enough to just fill open positions. Finding top talent that stays with the company and performs well boosts the recruiter’s value. Beyond just being able to find great candidates, recruiters need to be good at sales and be great communicators. With these skills, recruiters will see commissions and bonuses add up quickly. Being a top performer brings the potential for promotions to a management role such as president of talent acquisition or vice president of talent.
What type of recruiter makes the most money?
The compensation potential for a recruiter is determined by where they work, what roles they fill, and how much experience they have. Some markets are more saturated than others, which impacts how easy or hard it is to fill job openings. Because of this, some recruiters are paid less than others.
Technical recruiters average base pay is around $77,000. Recruiters with more experience, or those working in tech hubs like San Francisco or New York, can potentially earn much more. That is largely because of the high demand for filling these positions. Recruiters with a specific knowledge of the industry have high demand skills that companies are willing to pay for. And tech industries are not just software. Tech industries can include engineering, science, law, and nursing.
Agency recruiters have a better means to specialize. Because agencies focus on specific industries, they offer resources for the recruiter to network and hone their skills. Agencies also work with more than one company, which expands the opportunities to place more candidates and earn higher commissions. Tools like Betterleap can help agency recruiters streamline their workflows and give their clients a truly excellent client experience.
Contract vs. Full-Time Recruiters
Contract recruiters can make more money, but their income is more dependent on the market and business that comes in. There can be months where there are a lot of positions that need filled and other months where there are not as many. Contract recruiters are typically paid hourly rates, which means they aren’t paid during time off and can potentially earn overtime.
For full time recruiters, income can be more stable. If the company is in a hiring freeze or just is fully staffed at the time, the recruiter would just switch priorities but can still earn a weekly paycheck.
The decision for which direction to go is really dependent on the person. Going solo can feel like the more risky route to take, but it gives recruiters more independence and the ability to earn more because independent recruiters don’t have to share their earnings with the company they work for. Tools like Betterleap give recruiters the confidence they need to get started on their own.
For a recruiter, the good news is that the salary potential is entirely in their control. The recruiter can earn a steady income and work internally with a company to help it grow. Or a recruiter can work externally and see a steady incline of their earnings from the hard work they put into their craft. Whatever route chosen, the recruiter can find success by implementing their skills and savvy to keep companies staffed.
How Betterleap helps recruiting firms
If you’re looking to 10x your productivity as a recruiter, sign up for Betterleap! Betterleap is an AI-powered outbound recruiting platform that seamlessly connects everyone involved in the recruiting process. Everyone from internal recruiters and hiring managers to the recruiting firms, contractors and VC firms can connect on Betterleap to source, engage and convert candidates for open roles. With one workspace for all outreach activity, recruiters can make data-driven decisions about how to best optimize their time and hire with more efficiency.