False Recruiting Economy… I blame the Tooth Fairy…

I read with interest a surprising – and to be honest – a quite disturbing article in the Melbourne press this week… No it wasn’t the one about the confirmed Top Gun sequel – now  that I’ve gotta see… No,  it was a story about the Tooth Fairy – and how these days he/she pays on average $5 per tooth… Not surprising, nor disturbing if read in isolation, but when you consider  ‘…each 2g tooth is fetching more than double its weight in silver when measured against the precious metal’s $29 per ounce benchmark…’ It begins to take on some perspective…

That’s Outrageous!’ I hear you cry… ‘How dare the Tooth Fairy create such a blatant false economy – it will send young families broke forcing the Government to introduce a Tooth Fairy welfare payment to prevent the unavoidable slide into economic oblivion…’

All ‘kidding’ aside it really is a crazy thought – that kids’ teeth can be worth twice as much as silver is astonishing… but… It doesn’t end there…It gets much…much…crazier…

Last week there was an article in Shortlist quoting data form a 2011 Recruitment Industry survey by Bullhorn reporting that the average Recruitment Consultant in the Asia Pac region earned a whooping $131k per annum. It kinds puts the whole Tooth Fairy story into perspective right?!  Let me repeat that… the average Recruitment Consultant in the Asia Pac region earned a whooping $131k!!!

We are talking the humble Recruitment Consultant here – not Senior, Principal, Team Leader, Manager or Director… no, no…we are talking Recruitment Consultant…

Let me ask you a question… (of course the caveat is that to answer  you have to be a Recruitment Consultant – not Senior, Principal, Team Leader Manager, or Director – oh, and you have to work in the Asia Pac region)… Did you earn $131k in the last year?

My thoughts are  – and believe me it is backed by a great deal of market research – that few of you would have answered yes. Unfortunately, the simple fact is that it is rare (at best) that a Recruitment Consultant – in most markets – would have put together that kind of package over the last year.

Data from recruitmentsalary on the other hand, paints a very different picture. It shows that the average Senior Recruitment Consultant in Australia (that’s right SENIOR RECRUITMENT CONSULTANT), earns a package (including all commissions) of $98,100per annum.  You may say (in its defense),  that the Bullhorn survey was conducted across the entire Asia Pac region and Recruitment Salary only covers Australia – fair point, but the Bullhorn report surveyed 85 agencies across the region – 55 of which were Australian. And the data from the recruitment salary website covers 23,649 respondents that are adding live data daily.

There are those of you out there that may argue that Consultants in a commission based industry should be earning the $131k package ‘if they were any good.’ In fact, I had a very robust discussion last week with a State Manager of an Agency claiming that this is the norm and expectation within their business.  To be honest he is probably right in this case… He is fortunate enough to work for an excellent business, with an amazing commission structure and a very strong brand that attracts the best talent in the market. He is in the minority.

It is reports like the one from Bullhorn that create a false economy within the recruitment industry.  In my role as a Rec2Rec practitioner I spend a great deal of my time working through salary expectations with candidates and trying to align them with market reality… Sometimes this honesty is misunderstood as insulting… I really don’t mean to be insulting…but, just because the Tooth Fairy is paying twice the value of silver per tooth, it doesn’t mean your next employer is going to bankrupt themselves because of a report on a website, with data that just doesn’t reflect the reality of the market…

If you are interested in learning more about what you are actually worth in the market, or who is offering the best commission structures and other benefits for Recruitment Consultants contact me.

And, I’ll leave you with an answer I received from a candidate during an interview last week to the following question…

‘So, Jane how would you describe your outlook on life?’

‘Well Craig,’ she replied furtively (Like that word furtively? I do…). ‘I always take life with a grain of salt…and a slice of lemon…and usually a big shot of Tequila…’

Craig Watson


9 thoughts on “False Recruiting Economy… I blame the Tooth Fairy…

  1. Ben on Reply

    Luke – good article and i agree most people wouldn’t have answered ‘Yes’ to the question around earning $131k last year. The big problem is that most of them should have answered yes!

    On the ‘basic recruitment calculator’, you earn a third of what you bill – that would mean that you would need to bill around the $400k mark a year to earn that. These days that seems like a lot to consultants.

    I don’t deny that being a tough amount to bill in a ‘soft’ market, but i remember when it was standard that you billed $100k a quarter. These days, people would be jumping for joy thinking they had hit the big time with a $100k quarter.

    I think the bigger question should be ‘why did i not earn $130k last year’?

    1. Craig Watson rec-to-rec on Reply

      Hi Ben,
      Thanks for the comment – and I agree with you to an extent. Don’t forget this $131k figure includes all the junior (1 year) consultants playing in the Blue Collar and White collar low margin space… You work as an executive consultant in an executive professional brand with a transparent commission structure and a clear set of expectations… You, and your peers should be billing $400k plus a year – no question about it, and should be in that $130kish range – yet still you are in the minority. This report doesn’t seem to be a true average of recruiters in the Asia-Pac region… What about those less experience consultants grinding it out in the suburbs on a trades desk, being paid $45k base? What about the consultants working in the 25% of agencies that don’t pay commissions at all? What about some of the large generalists that attach so many ‘proviso’s’ around performance and being a ‘corporate citizen’ that even if you bill well they hold back on your bonus? My point is – that if Bullhorn is going to produce a report that is supposed to represetative of the ‘average’ recruiter – represent it realistically… I would love to see a list of the agenicies that contributed to the data… If they were all Mid Sized Exective Recruitment companies the data would be near correct – but if that is the case they need to let us know….

      1. Ben on Reply

        I totally agree with you in regards to the data – but that is the way with all of these surveys – the only way to do it is to look at ‘averages’ across the board. Its the same as when they release figures about general average salaries in certain cities etc – nobody should ever be judging themselves against that.

        As for the ability to make $131k in recruitment i don’t think it comes down to industry/desk or years of experience. I have seen 2 recruiters in my time that have been $1m billers in their first 12 months – one of them on a low margin trades desk. The topo biller i’ve ever seen outside of a executive search was doing $2m a year on a low/mid level industrial desk.

        As for the people getting low commission structures or no commission, that i’m afraid does just come down to them working in the wrong – the reality is that they will probably know that they are getting undercut in the market as i’m sure other people in the industry would have told them.

        But to come back to your original point – this data shouldn’t be used as a ‘gospal guide’, but i think people could use it as a good motivator of what they could earn with some hard work in the right company (thats where you advice comes in!!)

  2. Rupert Chalcraft on Reply

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  3. Kevin Geerin on Reply

    Hi Craig,

    The difference between a good recruiter and a bad recruiter in my opinion is state of Mind, if you want it bad enough, you will chase it, i agree 100k per quarter was the norm in my early days of recruitment as well, From memory with a good run and pipeline i was able to bill 100k in one month, but that was only a one off with every thing falling into place i have also had negative figures where things did not go my way. My belief to successful recruiting is to have a good pipeline coming through consistantly, so you are able to suffer the loss of one or two dropping off, I have always believed our industry is a Numbers game.

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