Part 6 of a 10-part series entitled, “10 Traits of the Best Contract Recruiters“
Factors in Determining Hourly Rate
In the course of managing our business since 1999, we have interviewed and hired a number of highly successful professional contract recruiters. We intend to keep doing that and have worked to identify some of the traits we have seen in our best performers over the last 18 years.
Today’s blog is the sixth in a series of 10 that identifies the factors in determining hourly rate for contract recruiters. We hope this perspective will provide guidance to those new to contract recruiting, offer some insight to experienced recruiters who are always looking to improve, and give TA/HR leaders some ideas on what should be expected of a contract recruiter. We also hope that this series will stimulate ideas and conversation that provide additional insight from readers of this blog.
It Can Be Tricky…
One of the trickier aspects of being a contract recruiter is establishing an hourly pay rate. Recruiters who have been contracting for a long time know their market range. Recruiters who are new to contract recruiting or who are coming back to the market have a more difficult time deciding what to charge.
Factors to Be Considered
As in any career move, recruiters need to consider how much they need to earn in order to maintain current life style. There are roughly 2,000 working hours in a year for an hourly contractor. They do not get paid for hours they do not work and so, do not get paid for holidays or vacation. Also, they have to buy their own insurance, this cost should be factored in. With that figure in mind, here are some external factors a contract recruiter should consider:
Scope and Nature of Assignment: Sourcing roles generally pay less than full cycle recruiting where the responsibilities are greater and so are the pressures. Technical and Executive recruiting assignments usually command a higher hourly rate because the degree of difficulty to find, attract, and hire such professionals is generally higher. Recruiting for call centers or manufacturing lines are typically paid less because the recruiting is less difficult with more candidates available.
Length of Assignment: The shorter the contract, the more a recruiter may ask because the short assignment is taking the recruiter off the market for that period. This is true for both part time and full time work.
Recruiting Experience vs. Experience Necessary to be Immediately Impactful: Experienced contract recruiters are generally hired to “hit the ground running.” If there is a marked learning curve in technology, industry, or process where there is a delay in meaningful contribution, the pay could be less. When the recruiter is contributing fully, as someone who is knowledgeable in the client’s product/technology/services, industry, and geography, then the pay should be at market rate.
Virtual vs. On-Site: Virtual recruiters do not have commuting costs. The client generally provides them with a laptop and phone. They have greater flexibility in hours. The recruiter may take a lower rate to work virtually.
The Market (Supply vs. Demand): In an economy, market, or geographic area where there is an abundance of recruiters available, pay will be less. Also, where there is an abundance of workers available, pay will be less. Expensive recruiting specialists are simply not needed. In an economy, market, or geographic area where available and qualified workers are scarce and difficult to find, good recruiters will likely be scarce, as well. Their assignments will also be more difficult; the pay will be higher.
The Client’s Budget: Most clients have set budgets for contract employees. They determine the value of the job, research the market, and estimate the cost over a period of time. They get approvals from upper management and are generally held to that amount.
Growth Opportunities, Stability and Fun: Some companies offer long-term engagements with a variety of responsibilities and learning opportunities. We have had recruiters work on contract with companies for multiple years because the company is expanding, they enjoy the team and find the work interesting. They are having fun. It’s an ideal situation for a contract recruiter.
Know the market, Position for Longevity
All things considered, the recruiters who are most successful at consistently landing long-term contracts generally avoid being the highest paid recruiters on the team. They understand that in slow-growth situations, they could be the first to be let go. They also do not price themselves too low because it sends the message that their abilities are less than others in market. They know the market and price themselves realistically for the long haul, given the customer and the assignment.
10 Traits of the Best Contract Recruiters
Part 1: Pursue Contract that Leverage Your Strengths
Part 2: Client Relationship, Not an Employer
Part 3: Professional Curiosity and Pursuit of Knowledge
Part 4: Stay Organized and Communicate Efforts
Part 5: Respect the Dynamics of Being a Virtual Recruiter
Part 6: Factors in Determining Hourly Rate
Part 7: Should a Contract Recruiter Incorporate?
Part 8: Building a Business Case for Contract Recruiters
Part 9: The Added Value a Good Contract Recruiter Brings