Global Recruiting

We Don’t Pay Commission. Are We Crazy?

by Veronica Blatt

carrot-stickToday’s guest blogger is Geoff Crews with Forsythes Recruitment in Newcastle, New South Wales, Australia. Forsythes Recruitment specializes in engineering and technical recruitment; corporate recruitment, including executive, sales, HR, and finance; office support recruitment including admin, accounts, and clerical; trade and industrial recruitment; and organizational consulting including psychometric assessment, outplacement, and OD. Geoff serves on the NPAworldwide Board of Directors.

An article in the Harvard Business Review entitled Why Incentive Plans Cannot Work goes into some depth about rewards and the human psyche. It was published in the September-October issue of 1993.

Nearly 25 years later, many of those years I’ve spent recruiting sales people, and I wonder if we, as agencies and employers, are yet convinced that commission delivers the best outcome for clients.

It’s not a one-size-fits-all scenario.

Selling your house for $5000 more to a prospective buyer is worth around $200 to your real estate agent. Who might then split that with the licensee. Is it the commission or the character of the agent that drives him/her to push the buyer that bit further?

Commissions for car salesmen are more complex. Other factors come into play including the number and age of cars in stock, the manager or dealer’s projections and even the time of year.

Research tells us that the more complex the commission, the less effective it is in driving sales success. My experience recruiting sales people across industries supports this research. Many candidates I have interviewed, when asked how their incentives are calculated, tell me they are unsure. Any wonder they are sitting in front of me considering alternative employment.

For most recruitment consultants, remuneration is base salary plus commission on placements. Rod Hore (www.hhmc.com.au) in his 19 March 2014 article would suggest this is an outdated remuneration structure for large parts of our industry. “Commissions were initially brought in for people who achieved sales, and sales to me is about winning new clients, not necessarily about doing the job of recruitment,” he said.

I agree with Rod. And it would seem there is a wave of recruitment firms redefining their remuneration, fee structures and service offerings to deliver and reward not just a single placement but a breadth of outcomes considered strategically more valuable – market research, candidate attraction, long game pipeline creation, talent engagement, consulting. Such firms think and behave like marketing companies (see www.gregsavage.com.au 5 May 2015).

Global software firm ThoughtWorks removed commissions for its salespeople and says it has worked wonders for the company. ThoughtWorks believed salespeople were spending too much time on “non-productive, administrative efforts,” and that the right salespeople weren’t being assigned to clients. “Not having a commission structure ensures every salesperson can concentrate on chasing the deals and coming up with constructive solutions for clients.”

Profit-sharing schemes are becoming popular in boutique recruitment firms like mine.

A group profit share fuels internal cooperation and delivers genuine group strength to clients. NPAworldwide works on this principle – a global cooperative of boutique agencies working together for the benefit of clients and sharing in the success.

Profit share creates more rounded consultants as it necessitates a commercial understanding that goes beyond the revenue line of a P&L. And profit share means success is shared amongst the team. Which, provided you have the right team, is way more fun.

Maybe I’m crazy. But in a world of disruption I wonder if we as an industry really believe that traditional commission will be the structure upon which our piece of the ‘talent acquisition’ pie will grow over the next decade.

image of button for free checklist to evaluate split placement networks


Attracting Global Talent

by Dave Nerz

global-communicationsAttracting global talent requires a new perspective. Employers must think about their marketplace for talent internationally rather than just locally. Based on the studies and reports from those that survey employers, many are experiencing difficulties finding qualified candidates for job openings. In fact 80% of employers reported difficulties filling openings in CareerBuilder’s Skills Gap Report. So perhaps now is the time for employers to expand their reach and seek candidates in other markets.

Getting started requires innovative efforts and new methods to connect with the talent that exists internationally. Here are a few things to consider:

  • Connect where the candidates are. Do research to find out what organizations and communities exist and are attractive to the types of candidates you desire. Connect to schools that are graduating degreed individuals that you desire. For example, international engineering schools or medical programs. Are there local communities like “Engineers Australia” or “Philippine Nurses” that are hot beds of discussion and offer an opportunity to attract and connect with future candidates?
  • Get social. Start a LinkedIn Group or Facebook page to attract the types of international candidates you want to engage.
  • Join social discussions. Place your organization into the social dialog. Get active, offer insight, contribute to the conversation.
  • Schedule interviews. It is virtually free to interview. Set aside some time early or late in a day each week to entertain international candidate interviews via Skype or some other distance connecting tool.
  • Speak or do webinars that will draw the global talent audience you seek to engage.
  • Find partners. Look to establish a connection to an international recruiter or a collection of global recruiters.

Distance is no longer the reason blocking access to global talent. Technology has enabled connections to anyone virtually anywhere. Leverage the tools out there to connect.

Anyone have a favorite tool for connecting with global candidates they want share with us? LinkedIn and Skype are my “go to” tools!

Image courtesy of siraphat / FreeDigitalPhotos.net

button to subscribe to NPA blog


Improve the Candidate Experience in Your Recruitment Efforts

by Veronica Blatt

It’s no secret that we are in a candidate-short employment market. Globally, employers are reporting significant difficulty finding the talent for their most crucial openings. With the employment market stronger than it has been in quite some time, more employees are open to new career opportunities. In fact, 45% of SATISFIED workers say they would consider a career change. Anecdotally, our member recruiters are reporting more counteroffer and multiple-offer situations than they have for a number of years. Great candidates have an increasingly short shelf-life and are typically off the market in a matter of a few days or less. Read the rest of this entry »


How Long is Too Long to Hire?

by Veronica Blatt

tortoiseA recent Glassdoor study found that the average hiring process in the U.S. took 23 days in 2014, jumping from 13 days in 2010—the upward trend is also seen in Europe, Canada and Australia.

As many of you know, time can kill a deal for a recruiter. So where is the line drawn between being thorough and taking too much time to fill a position?

There are a number of reasons that cause filling a job order to be prolonged, from a lengthy interview process to the economy. Read the rest of this entry »


Some Increase Recruitment Fees While Others Are Discounting

by Veronica Blatt

increase-decrease-recruitment-feeRecruiters operate many different ways. The ones I am most familiar with are contingent recruiters, who charge a fee for successful hires. They only get paid when a hire is made. That structure is itself a long opportunity for discussion. I always joke with my friends that it would be nice if your accountant or health club charged this way. I guess some may? Seems that most are just working on increased fees. Read the rest of this entry »


What Recruitment Niches Are Hot?

by Veronica Blatt

job-search-compositeWith the first half of the year behind us, I thought I’d take a look at NPAworldwide placement activity to see which recruitment niches are hot in our network. Compared to last year, we have three notable changes:

Cross-industry placements have increased by 20% year-over-year. “Cross-industry” refers to roles that can “cross over” into multiple industries such as sales, marketing, business development, human resources, C-level positions, etc. Historically, an increase in sales and marketing roles generally leads to an increase in manufacturing and all other roles as well, so that’s definitely a change we like to see! Some of the placements our members have made this year include: Read the rest of this entry »


Exit Strategies for Micro Recruitment Agency Owners

by Veronica Blatt

2013 Rod smallOur guest blogger is Rod Hore from HHMC. Rod is a 35-year veteran of Australian and international IT and corporate advisory organisations. His executive-level credentials traverse many segments of the staffing and recruitment industry and include corporate advisory assignments, mergers and acquisitions mandates, and C-level advisory to multinational and other public and private organizations. Located in Sydney, Rod founded HHMC to provide local industry acumen and global knowledge to Asia Pacific recruitment agencies. HHMC’s innovative business strategies and well-grounded guidance result in clients realising their personal and corporate goals.

A micro-business is usually defined as a business with less than 5 employees. The recruitment industry has a vast percentage of agencies at this micro level. Though the irony is, when important aspects of the industry such as strategy, valuations and M&A are discussed, the smaller businesses are ignored and the focus is on larger businesses. Read the rest of this entry »


Is Contract Staffing for You?

by Veronica Blatt

employee-compositeToday’s guest blogger is Patti Steen with The Pelsten Group located in Seattle, WA. The Pelsten Group is a recruitment firm that focuses on all levels of positions within IT. The majority of their clients are in the Seattle area but they actively support NPAworldwide across the US. Patti is currently serving on the NPAworldwide Board of Directors.

Is contract staffing for you? I have worked for years in both contract and direct hire placement and have wondered why more firms do not supply both to their customers. Current trends in staffing show a 6% increase in contract staffing during 2015, bringing the total spend to US $115 billion. If your firm is not currently supplying contract staffing to your customers, it may be time to take a look at this growing service. Read the rest of this entry »


9 Numbers Indicating Opportunity for Recruiters

by Dave Nerz

opportunity-arrowThe Staffing Industry Review is a great publication that I read on a monthly basis. This month I scrubbed through it for a collection of facts and numbers that should be of interest to anyone in recruiting or talent acquisition. Looks like there is much opportunity and some challenge on the horizon for those of us in these markets.  Here is what I saw this month: Read the rest of this entry »


How to Select a Recruitment Agency

by Veronica Blatt

apple-orangeWhether you’re an employer with ongoing hiring needs or have a one-off role to fill, using a recruitment agency is definitely an option worth considering. There are many traits and characteristics to consider when you are evaluating recruitment agencies. If you’re unsure how to select a recruitment agency, here are six pointers worth evaluating: Read the rest of this entry »


Please ensure Javascript is enabled for purposes of website accessibility