Graham Palfery-Smith of 6CATS International draws on his experiences to discuss the various types of rewards which exist in the recruitment industry whilst weighing up the negatives.“So how much do they pay a recruitment consultant then?”, were the words, laced heavily with sarcasm, of the first Finance Director I ever placed, at his initial interview with me in the early 1980s.
My forty plus year old questioner was being quite aggressive and made no secret of the fact he thought I was a young whelp with little experience. My answer took him aback somewhat, as I was earning (including commission) at least 20% more than he could hope to earn going to work for the company where I eventually placed him. Even more perversely, this company was a recruitment business, and he went on from a candidate to become a client, to eventually employee and main board director for my own business (many) years later, though he never actually caught up!
I say this not to boast, but to emphasise the differences in rewards between what ‘we’ as recruiters do and those others who run the businesses. Of course, today, people going into the industry have a wide range of starting packages to look at, but it will invariably be the best front-line recruiters (and those who can manage them the best) who end up with the biggest rewards.
When I was a young recruiter in the 1980s, I used to measure my package against the top salaries of the positions I filled. I was a Financial Recruitment Consultant and placing, at the top end, Finance Directors in medium sized companies. As long as my earnings were ahead of the mean for this group, I felt as though I was doing well. This seemed to hold reasonably true for most of my colleagues and consultant peers in the early days.
Also, in comparison to our peers who were not in recruitment, it was sometimes difficult to relate to the day-to-day money issues friends had. One in particular was a police sergeant, and I don’t think he ever fully recovered from me answering a question, honestly, about our relative earnings.
There were some who earned more, of course, particularly front-office traders and investment bankers in the city, but theirs was a different universe, at least until the professional markets crashed in the various recessions we’ve had since 1990, and a lot of them then tried to make it in recruitment.
When I was asked to think about the topic of rewards in the recruitment industry, those memories came back, but also the thoughts that it has never, ever just been about money.
It may help to think about it in terms of short and long term, tangible and intangible rewards. I’ll try and explain this in more detail below.
Tangible rewards, for the short and medium term, speak for themselves. Obviously, pay, commission and bonuses, but also the trips, the lunch clubs and other perks that characterise our industry. These days, gym membership is prized, so I’m told, although the company car, once a given for success, has been taxed almost out of existence.
The trappings may change but the principle is the same; spend money on people and they feel more valued. Although, as a business owner this is harder to justify, and I’ve certainly been party to numerous heated board room discussions about the impact of doing away with ‘the Vegas trip’, the ‘ski weekend’ or not allowing partners to come to the Xmas bash.
It is difficult to quantify the benefit of these tangible and often very expensive (for the employer) benefits and most growing businesses will be familiar with these conversations. For what it is worth, most surveys reveal that there are an ever-changing range of factors that recruiters will take into account when assessing if they are being rewarded well enough, ranging from the employer’s attitude, to CSR, to the lack of a ‘proper’ coffee machine, but it usually comes back to financial rewards and incentives.
Of course, an increasing minority of recruitment businesses do not pay commissions or bonus incentives (directly), believing it sets them apart from the salesy side of the industry. Intriguingly, in general terms, when you look at the numbers, these firms spend just as much on their staff as the more traditional style (salary plus commission) houses.
One of the most valued benefits of tangible rewards is the ability to spend, and recruiters are some of the biggest consumers of luxury goods, mainly watches and clothes but including holidays, electronic goods and gadgets.
One of my highest ever paid consultants (who was earning over £400kpa over ten years ago) always had the first of everything, although, because of the way he lived and worked, hardly ever got time to play with them.
Long term tangible rewards are also apparent in our industry. There have been many millionaires created and not only when they exit the industry. Long term rewards in terms of equity, especially in the more dynamic public companies in the sector, are also a way of recruiters benefitting from long term service and consistently growing their business. However, do not lose sight of the fact that no-one gets rich without working fiendishly hard, creating a bit of luck and taking risks.
Learning is an enjoyable experience, its own reward if you like, especially if learning can help you be a better recruiter in your market. Understanding the nuances of their sector can make a good recruiter great. Also, I mentioned earlier that hard work is an absolute pre-requisite to success, and there is a genuine value in working hard and achieving something. Many among you will be familiar with this feeling of self-worth through effort, in the field of sports or the arts, but it can be created in our industry as well.
Less talked about, but genuinely important, are the intangible rewards that one can get from a career in recruitment.
But first, let’s just consider one of the intangible negatives.
How recruiters are perceived has changed a lot in the last 35 years but there is still some way to go before recruiters are considered ‘professional’ by those who have never done it (at least in this country). Partly, of course, this is of our own making. Recruiters not doing what they say they will do, operating improperly and cutting corners does not help with this.
You would be surprised at those, sometimes big name, recruitment companies who facilitate international contractors’ tax evasion, for example. This is not only terrible for the industry, but actually criminal and hardly enhances our reputation.
This perception, perversely, is a facet of the most significant of the intangible rewards. In every survey in every industry, including recruitment, it is apparent that ‘job satisfaction’ is by far the most important factor in determining if people enjoy what they do.
In the case of recruitment there is little more satisfying than demonstrating through experience, knowledge and keen intelligence to a client or a candidate that you know what you are doing and what you are talking about. You, as an information broker, using your skill and all the resources at your disposal hugely influence the career direction of candidates and the commercial direction of clients. This will of course increase over time as you get more experience and knowledge, so is both a short term and long term intangible reward.
The fact that not enough of the users of your services appreciate how valuable you are is one of the biggest challenges we face, as individuals and as an industry.
Finding the right role for the candidate, whether it is a project to complete to extend their experience, or a permanent role where they can really make a difference to the direction of their business is immensely satisfying.
Equally, most clients, although not enough will admit it, are dependent on the quality of the service provided by their recruiters. Winning the order is not enough; they have to deliver it as well. In times of skills shortages, most of the time in other words, the recruiter is the difference between the client being able to fulfil their objectives and make their targets, or them not having a chance of succeeding.
Sadly, there is not enough room here to fully cover the positive benefits recruiters bring to the commercial world, but it is vital for each of us to recognise that they do.
We are not therapists, doctors or teachers, but we do good and actually make a difference!
And not only must we not forget that, but we must remind others as well.
In truth, the best reward would be to work in an industry that our users automatically consider professional, essential and critical to their success.
Graham Palfery-Smith is a non-executive director/board advisor to a number of companies including The Recruitment Network