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Anonymous
01-21-2002, 05:40 PM
can someone tell me how recruiter gets paid?

As much as I like to think that the recruiters do their jobs simply out of love and respect, I think the money has something to do with it.
so what are their fees likes.
Is it flat fee schedule or do they take a rip (something like 10% of the salary)?

please help me understand the process


-the young and the restless

Troy McClure
01-21-2002, 05:48 PM
Something like 10%. Except that figure is ridiculously low. I think it's more like 1/4 to 1/3, and could be higher for a particularly difficult spot to fill. And, you only have to stay 3 or 6 months (usually) for them to get their commission. So, theoretically, a recruiter could make more than you do from a company that you go to work for...

Anonymous
01-21-2002, 06:17 PM
thanks for replying.

10% is low?!
and I thought 10% was a high estimate on my part.

let's say a company hires a student straight out of undergrad program. This person is starting $45k and the recruiter is taking $15K.(without taking those d*mn SOA exams) isn't their service very expensive?
Given that two candidates with very similar qualifications and interview performances, wouldn't one stand out more simply because this person can be hired without the extra high cost associated with recruiter?

any insights from actuaries in the position of hiriing?

-YR

Troy McClure
01-21-2002, 06:40 PM
A new college grad probably would be at the low end - 25% or even lower? Not sure, because I would never use a recruiter for an undergrad.

Recruiters spend hour after hour listening to people snipe about how bad their job sucks, and they place a relatively low percentage of people that they talk to. A recruiter might spend 20-30 hours total talking to somebody that they never place. Or more. And another 20-30 hours talking to companies, representing these people that they never place.

I think they do well, particularly for how bad some of them are at what they do. But, I don't think they make a ridiculous amount of money. And, some of them make a ton of money, but they are hard-working, talented people who would make a lot in whatever field they were in.

As for the high end of the commission scale, not sure how high it goes, but a company might pay a recruiter to find a top-level executive, and the requirements are so specific and so high that the recruiter talked to everybody he can find that is at that level (maybe it's 50 people), only a few (ten?) even get their resume considered based on the company's requirements, and in the end the company says, no you didn't bring me anybody I want, we pay you nothing.

As for the relative desirability of two candidates, one of whom comes with recruiters fees: at the top end, the companies are looking for the best candidate, and cannot afford to take second-best, because the position is too important. Recruiters fees are irrelevant when you are looking for a chief actuary or something similar.

At the lower end, they matter more, but I don't see people come through and say, pick the cheaper one, because I always see a group where there is one clear choice, and then the decision is, can I get him/her?

Just my $.02

Troy McClure
01-21-2002, 06:42 PM
Actually, my previous post is probably not accurate; for a high-level exec, I think the fee structure is different, based on time spent and such... not sure.

Anonymous
01-22-2002, 08:20 AM
A good recruiter once told me that there are two main categories: retainer and contingency recruiters.

When working on a retainer basis, they will typically charge per assignment, regardless whether the position is ultimately filled.

When working on a contingency basis, they will typically charge a fixed percentage of pay once the applicant has assumed his/her job.

DW Simpson
01-22-2002, 09:10 AM
<small>Quote: "When working on a retainer basis, they will typically charge per assignment, regardless whether the position is ultimately filled."</small>

Just to clarify, when we work on a retained search for a client, a very small portion of the fee is paid up front for the assignment. The remainder of the fee is paid only if the position is filled.

Ms. Re
01-22-2002, 10:47 AM
my impression is that the "going rate" is 30% of salary

42
01-22-2002, 10:52 AM
The standard recruiter fee I have seen is 30%, and the person generally had to stay in the job about 6 months for the recruiter to get that fee. Most recruiters could be talked down to 17-25% because we were a large company and they wanted our future business. Yes, in some cases, the recruiter fee could hurt your chances of getting the job and/or your starting salary could be lower. What you gain is the recruiter's knowledge of the available positions, the personalities (and desperation levels) involved, and a "mediator" for discussions on salary/benefits.

I've seen recruiters whose total involvement in the process was to match a name to a job. Clearly, their fee far exceeded their worth in those cases. But I've also seen recruiters who have sent as many as 100 candidates to a company on a retained search, only to have the company turn each one down because the person wasn't quite what they were looking for. I think it all balances out.

Anonymous
01-23-2002, 01:28 AM
Just to clarify, when we work on a retained search for a client, a very small portion of the fee is paid up front for the assignment. The remainder of the fee is paid only if the position is filled.


If the upfront portion of the fee is very small as you claim, what then would be the difference between retainer and contingency?

DW Simpson
01-23-2002, 08:08 AM
Nothing is paid if a contingent search is unsuccessful.

This page better explains the differences: http://www.dwsimpson.com/retained.html

DW Simpson
01-27-2002, 12:01 PM
Some search firms, within the actuarial community and outside of it, structure their retained searches so that total payment conceivably could be made without there being a successful placement.

An example would be a retained search where 1/3 of the payment is made up front, another 1/3 after 30 days of the search, and the remaining 1/3 after 60 days. So after 60 days, there is much less of an incentive for that firm to work on the search to completion.

I finally realized today why there'd be confusion on this point, since "retained search" means vastly different things to different search firms. As I mentioned, ours are structured so that we are extremely motivated to do successful work for our clients. - Claude

openminded
01-27-2002, 06:39 PM
...

Troy McClure
01-27-2002, 09:45 PM
Any idea what the base salary is that those fees get added on to? I am guessing at that rate, the recruiters are not making much money in base salary, since the company is giving away a third or more of the money in incentives. They still need to cover phones (lots of calls!), admin, and other expenses, such as travel to professional seminars and such.

Anonymous
01-28-2002, 01:34 AM
Claude:
Your comments are illustrative, however, the question below has not yet been answered.



On 2002-01-23 01:28, Anonymous wrote:


Just to clarify, when we work on a retained search for a client, a very small portion of the fee is paid up front for the assignment. The remainder of the fee is paid only if the position is filled.


If the upfront portion of the fee is very small as you claim, what then would be the difference between retainer and contingency?

DW Simpson
01-28-2002, 07:23 AM
From our site --

<u><big>Retained Searches</big></u>

A retained search is an agreement in which the client will contract exclusively the services of D.W. Simpson & Company to conduct a single or multiple position search. Within this agreement, the client will retain D.W. Simpson & Company's services.

The "retainer" usually consists of one-third of the estimated total placement fee(s). In turn, D.W. Simpson & Co. will provide the client the full array of its recruiting services, including reference checks, progress reports, in-person interviewing and advertising.

Additionally, D.W. Simpson will commit a specific number of collective recruiter hours per week to the search. In sum, the retained search is a contractual agreement in which the time committed to the search is specifically laid out, market coverage is ensured, the time frame is identified and a minimum number of candidates interviewed is guaranteed.
---------------------------------------------

<u><big>Contingent Searches</big></u>

A contingent search is a conditional agreement, often verbal, between D.W. Simpson & Company and its client(s). The client will provide D.W. Simpson & Company information pertaining to its open actuarial position(s) including, when possible, particulars such as position levels, titles, compensation figures and geographic parameters. D.W. Simpson & Co., in turn, will provide the client with its recruiting services, which include a staff of 30 and database of approximately 43,000 actuarial candidates from students to Fellows.

A fee will be paid to D.W. Simpson & Company only when the client hires a candidate presented by D.W. Simpson & Company.

In a contingent search, the client provides no up-front financial incentive ("retainer") to D.W. Simpson & Company, while D.W. Simpson & Company provides no guarantee in regard to time committed to the search, number of candidates contacted or number of candidates interviewed.

The amount of candidates that a client will see from us is dependent on any number of market factors. These market factors can vary: from the geographic location of the position to the demand for actuaries at the time of the search to the pool of available/active candidates who specifically meet the client's requirements.

It is, of course, in D.W. Simpson & Company's best interest to satisfy the hiring needs of every client, and it is our intention to do so.

It is a conditional agreement in which any payment to D.W. Simpson & Company is contingent upon the successful placement of a candidate in the position(s). All of the financial risk is, therefore, D.W. Simpson & Company's.

Magilla
01-28-2002, 08:38 AM
A very interesting thread indeed! Let me add that companies in general have been moving away from utilizing recruiters for entry and mid-level positions in order to contain expenses.

A few web sites (SOA.org and Actuary.com) post positions that eliminate the middle-man (recruiter) so to speak - although recruiters are allowed to post on one or both of those sites.

I still believe that recruiters serve a purpose in the recriutment of senior level (FSA and above) actuarial positions, though there are only a few of them out there worth their weight in salt.

DW Simpson
01-28-2002, 09:03 AM
Quote: "Let me add that companies in general have been moving away from utilizing recruiters for entry and mid-level positions in order to contain expenses."

We're simply not seeing that at all. Our entry level and mid-level recruiting has exploded in the last couple of years. It is often more effective for us to do the hard work it takes to fill a position, regardless of the level. Technology hasn't changed that.

I was a casualty actuary for 8 years (ACAS) before working for DWS, so I have a view from both sides.

<font size=-1>[ This Message was edited by: D.W. Simpson Webmaster on 2002-01-28 09:03 ]</font>

Anonymous
01-28-2002, 10:38 AM
so, what is D.W. Simpson's rate like?
As the numero uno source of your paycheck, we like to know.

Magilla
01-28-2002, 10:57 AM
Of course you're not seeing a diminished focus on the use of recruiters for entry and mid-level actuarial personnel, Mr. DW Simpson web master. Admitting that you did would cast a little shadow of doubt on the viability of your employer's profession.

Give me a break!

:moon:

DW Simpson
01-28-2002, 11:59 AM
<small>Quote: Of course you're not seeing a diminished focus on the use of recruiters for entry and mid-level actuarial personnel, Mr. DW Simpson web master. Admitting that you did would cast a little shadow of doubt on the viability of your employer's profession.

Give me a break!</small>

Respectfully, Magilla, I suggest that you take a look at my previous 70+ posts on this forum and consider that if everything else I've written here is truthful, why would I begin to post nonsense now?

I was specifically addressing something that you stated as fact that I personally know to be incorrect.

anon789
01-28-2002, 12:09 PM
It's certainly not the impression I got either. Geez, lighten up on the guy Magilla. He's never yet done anything around here other than answer questions.

In fact, when I read your post, my first impression was that YOU somehow had something at stake.


<font size=-1>[ This Message was edited by: anon789 on 2002-01-28 12:11 ]</font>

aNoNo
01-28-2002, 12:35 PM
On 2002-01-28 10:57, Magilla wrote:
Of course you're not seeing a diminished focus on the use of recruiters for entry and mid-level actuarial personnel, Mr. DW Simpson web master. Admitting that you did would cast a little shadow of doubt on the viability of your employer's profession.

Give me a break!

:moon:


Me thinks the big Magilla may have some asteriods on planet Uranus!

Troy McClure
01-28-2002, 01:16 PM
My impression is that large employers are moving away from using recruiters for entry to mid-level (especially entry), but that there are enough small employers starting to hire more entry to mid using recruiters that makes up for the difference. If I am correct, that may explain the difference between Magilla's and Claude's views. This is based on a small amount of anecdotal evidence. Claude, any comment?

As an aside, I do think that Claude has consistently answered posts in a professional manner on this board without shamelessly plugging DWS that we might see if other recruiters were here, so I don't think there is a reason to be nasty, even if you disagree.

Nature Boy
01-28-2002, 01:21 PM
plus, d.w.s. got many of us drunk in atlanta 2 months ago. so, magilla will have to bring me a couple of drinks before i start listening.

whooooooooo

Anonymous
01-28-2002, 01:25 PM
While I am not particular thrilled to see commerical interests such as seminar lectuers, and recruiters on this board, I respect the fact that Claude let us know that he represents DWS and he participates our discussion in a profession manner.

please continue to be a part of this board.

DW Simpson
01-28-2002, 02:31 PM
Thank you all for your kind words.

<small>Quote: My impression is that large employers are moving away from using recruiters for entry to mid-level (especially entry), but that there are enough small employers starting to hire more entry to mid using recruiters that makes up for the difference. If I am correct, that may explain the difference between Magilla's and Claude's views. This is based on a small amount of anecdotal evidence. Claude, any comment?</small>

Troy, because of the strong demand at the low or no experience end of the spectrum, it's hard for me to generalize in a broad sense. Much of our more concentrated entry level recruiting work has even been for large firms, and some of the small firms might continue to prefer to do their own small-scale on-campus recruiting and work with us as a backup option, for example. So it's not entirely intuitive to determine which size firms ultimately would like our help, or even which locations of consulting firms/insurers/brokers/others want our assistance, and at what point in the hiring process/timeline.

The public stance of some employers with regards to recruitment versus what they do in practice in their best interests can be two entirely distinct animals.

anon789
01-28-2002, 02:34 PM
On 2002-01-28 14:31, D.W. Simpson Webmaster wrote:
The public stance of some employers with regards to recruitment versus what they do in practice in their best interests can be two entirely distinct animals.

lol. :smile:).

openminded
01-28-2002, 05:06 PM
...

Crystal Dragon.
01-29-2002, 11:54 AM
Curiosity killed that cat.

How does the recruiting company pay their recruiters? Salary? Commission only? or somewhere in between??

DW Simpson
01-29-2002, 05:34 PM
<small>Quote: How does the recruiting company pay their recruiters? Salary? Commission only? or somewhere in between??</small>

If you're a younger recruiter, more may be based on salary. A more experienced recruiter is based mostly on commission, with a draw against that commission. So you're right -- somewhere in between. As someone else mentioned, there is also a lot of overhead.

As with "retained search" definitions, compensation structures also vary greatly among recruiting firms.

Hermann
01-17-2007, 12:07 PM
5 years later...

Hypothetical situation:

A person who has been in the industry between 6 months and a year and is currently in a student program wants to switch companies. Company X would be willing to hire him and pay him Y. However, because he is working with a recruiter, Company X will have to pay a commission. Will Company X most likely be willing to pay him Y or will it be a lower figure?

DW Simpson
01-17-2007, 12:09 PM
5 years later...

Hypothetical situation:

A person who has been in the industry between 6 months and a year and is currently in a student program wants to switch companies. Company X would be willing to hire him and pay him Y. However, because he is working with a recruiter, Company X will have to pay a commission. Will Company X most likely be willing to pay him Y or will it be a lower figure?

Y.

Westley
01-17-2007, 01:42 PM
Most likely Y (becuase that's what you asked). But, don't discount two other possibilities:

1) the company has competing candidates they can hire for Y that they like or a view of recruiting costs such that they are only willing to pay some amount that is less than Y.
2) the recruiter is able to work with the company in terms of understanding the market and the candidate such that the company is actually willing to pay some amount greater than Y.

Take 2
01-17-2007, 02:24 PM
Most likely Y (becuase that's what you asked). But, don't discount two other possibilities:

1) the company has competing candidates they can hire for Y that they like or a view of recruiting costs such that they are only willing to pay some amount that is less than Y.
2) the recruiter is able to work with the company in terms of understanding the market and the candidate such that the company is actually willing to pay some amount greater than Y. or 3) the recruiter persuades the company to pay Y and toss in a bigger signing bonus, benefit package, or vacation allowance.

A recruiter might also be in a better position to help the company see your good qualities and modify their expectations to take advantage of them. I have also done this without a recruiter, but it's not often easy to sell the idea as well as sell yourself. Some recruiters are in a position to reduce their commission if it will help the candidate -- but that's probably rare (although standard recruiter commissions do appear to have become more negotiable over the past 30 years).

Woodrow
01-17-2007, 02:30 PM
Y.

You can trust him. He has over 70 posts on this forum.

At your level you are a commodity. They are willing to pay Y because that's what they have to pay to get you. If they could get you for Y - $5,000, they would want to do that if there was a recruiter or not.

(making this up as I go, but doesn't it sound convincing?)

phatadamwa
01-17-2007, 02:34 PM
You can trust him. He has over 70 posts on this forum.


lol

DW Simpson
01-17-2007, 04:26 PM
Those were the days of wine and roses.

Hermann
01-17-2007, 11:23 PM
[size="1"]

I suggest that you take a look at my previous 70+ posts on this forum and consider that if everything else I've written here is truthful, why would I begin to post nonsense now?




LOL, your credibility has increased considerably. Dare I check to make sure all your posts are truthful?

DW Simpson
01-18-2007, 08:24 AM
LOL, your credibility has increased considerably. Dare I check to make sure all your posts are truthful?

You'll probably find a few sports predictions gone awry.