Base v OTE
Money is not the first thing that I talk about with a candidate….but obviously it comes up pretty early in the conversation. Makes sense; none of us go to work just for the fun of it…..we expect a bit of money too!
“So, what are you looking for money wise, John?”
It’s an open ended question…..it can be answered anyway. But a lot of times when the answer comes, it is in the form of a base salary only.
The last time I looked, commissions and bonuses are a big part of how we recruiters earn our money. Rightly or wrongly, that’s the way the industry works…and it is a big reason why we put ourselves through the emotional rollercoaster that we do….to see that money land in the bank and enjoy the spoils of our efforts. Base salaries are obviously important. Of course they are. We quite rightly expect a certain guarantee of income, which reflects our experience, achievements, and the role we are being employed to do. But that should not be the focus for an agency recruiter. If it is, then you might be in the wrong industry, or employing the wrong people.
Think about it like this. It is hard to justify that someone is ‘hungry’, ‘motivated’ and ‘driven’ if $5k on their base is more important than the opportunity to earn $50k in commissions. It’s even harder to justify, if having that extra $5k means it will be tougher to earn more because it puts the threshold target up. And it is impossible to justify when there is no interest in understanding how the commission model work….as long as a base salary of $X is ticked off.
If you are in a commercial recruitment role then you should be far more interested in the OTE than the base. When someone asks you what you are looking for, the answer should be in terms of an OTE, not a base salary. And when you are considering any offer, you should be making your decision based on the OTE first, and the base second.
Obviously, for recruiters to think in terms of an OTE, agencies need to make commission models realistic (and easy to understand!). Recruiters, quite rightly, can be suspicious of commission models and when that happens, the whole concept becomes irrelevant, and understandably it does then become all about the base.
We get asked a lot by clients and candidates how the balance should work between base and OTE. Different situations require different models and there isn’t a one size fits all. I’m certainly not against paying someone a larger base if there is good reason to, and I am not definitely not advocating paying people on the cheap either.
But often a larger base means a lot lower OTE….and that equation doesn’t work for someone who is supposedly ‘hungry’, motivated’ and ‘driven’. Some of the most successful agencies will often question a recruiter who is largely focused on their base salary for that reason. And conversely, whilst a juicy base is probably going to grab your attention, you might also want to ask yourself why some agencies feel the need to pay a high base (and when you have been made redundant after 6 months of a slow start you will understand why!).
As an agency recruiter, the conversation should be about the OTE, not the base….
Do you agree, or disagree? Are you on a high base with a smaller OTE and how does that work out? Would you change to a job with a lower base but higher OTE?