External recruiters, also referred to as agency recruiters or headhunters, are employed by staffing firms tasked with assisting multiple companies in filling their job openings by sourcing suitable candidates.
Within a staffing agency, recruiters collaborate with numerous employers, facilitating the hiring process for a range of job positions.
Unlike internal recruiters, agency recruiters typically do not receive a fixed salary. Instead, their compensation is commission-based, directly tied to their success in placing candidates into positions.
The earnings of an agency recruiter can vary significantly based on individual performance but may soar to upwards of $200,000 for seasoned professionals.
Here's a breakdown of how agency recruiters are compensated and the potential earnings in this role:
Agency recruiters typically earn what is known as a contingency fee, often equivalent to 15-20% of the candidate's first-year starting base salary. Importantly, this fee is borne by the employer (referred to as the client) and does not impact the candidate's earnings.
Upon successful placement of a candidate, the staffing agency receives the contingency fee from the client. Subsequently, the agency typically retains half of this commission, with the remaining portion allocated to the individual recruiter responsible for the placement.
This commission-based structure allows external recruiters to accumulate substantial earnings swiftly, especially when successful placements are made consistently.