Believe it or not, some recruiters struggle to understand their own commission structures and how close or far they are away from commissions. I worked at one agency that had one of the most complicated commission structures and constantly had their recruiters scratching their heads.
In order to help visually see how many and what level of placements you need to hit your targets, we developed a simple calculator for this purpose. Each commission scheme is different and this is used as a basic guide and not applicable to all commission schemes but hope it helps.
“While some commission schemes are very transparent and make sense, others are overly complex and leave recruiters spending unnecessary time figuring out how and when they can make a bonus (if ever). If your commission structures are complicated, you are not alone."
Placements vs. Revenue Target Calculator
This calculator will help you see how many placements at different amounts and % rates affect the revenue and compare it against your specific revenue target.
Just type in your revenue target and each placement in your pipeline and the rates with each client for each role. It allows you to see which roles are better to spend time on closing and which ones will not really help you reach your target.
Sometimes working the larger roles are more beneficial but can take more time to close whereas, smaller ones at higher rates that are quicker to close might get you to your target sooner.
In either case, being able to visually see the importance of % rates and deal size is important.
For recruiters that are on a draw system or discretionary bonus system, it gets even more complicated. So this calculator was created to help those recruiters understand and track (in real-time) those scenarios and get a better sense of what kind of pipelines and revenues they are working towards.
This calculator will help compare your total (money-in-pocket) commissions from a draw vs. no draw system at different commission % rates.
Just enter the revenue target and your current quarterly draw amount at the top. Enter the placements and commission rates in the left fields and the totals will calculate on the right.
Even if you are not on a draw system, it will calculate your commissions in the same way (just leave the draw amount blank).
At the bottom is where you can enter your commission rates for any amount above the draw. Many agencies have a scale based on how much you have billed either for the year or quarter so this can help show you how much you can make at different commission scales.
No Base (100% draw)+ High Commission Scenarios
Recruiters that have no base and higher % rates or do splits with other recruiters, can also use the draw vs no draw calculator. Just enter “0” for the revenue target and enter the deal size and commission rates for each deal.
Enter any out-of-pocket costs (like researchers, job boards, fees, etc.) that were used for these deals in the quarterly draw field.
Understanding commission structures and building a strategic pipeline is never easy but hopefully these calculators can help get a better idea of what deals to chase and which ones will help you achieve your targets.
We are working with some great agencies that have clear commission structures and systems in place to achieve them. If you are interested in having a confidential chat to learn what is available on the market, please feel free to reach out to me.
Hope this helps and if you have any questions or comments related to this calculator or recruiting issues in general, please reach out to us.
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