Category: Salary guide

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Recruitment Salary guide

Salary guide for recruitment consultants in Hong Kong

Are you on a competitive base salary in Hong Kong? What factors influence your base salary? How much of an increment should you expect when moving to a new agency?

In this article, we answer these questions with our salary guide for agency recruiters in Hong Kong.

The salary ranges in this guide were gathered after working in the recruitment to recruitment industry in Hong Kong between 2016 to 2019. 2020 has seen a shift in salaries due to COVID-19 so we have decided not to account for this year in this guide, but we have commented on the pandemic’s impact at the end of this article.

Associate Recruitment Consultant (0 – 1 years of experience)

HKD $15,000 – 20,000 per month

Fresh grads are paid a salary between 15 – 18k whilst professionals with 0 – 1 years of experience in another industry transferring into recruitment can leverage a higher salary between 18 to 20k.

Recruitment Consultant (1 – 3 years of experience)

HKD $22,000 – 27,000 per month

Newly promoted recruitment consultants are paid between 22 – 25k whilst recruiters with a few additional years of experience are paid between 25 – 27k. Overall, the standard go-to salary for most agencies at this level of experience is 25k.

Senior Recruitment Consultant (2 – 5 years of experience)

HKD $27,000 – 33,000 per month

Newly promoted senior recruitment consultants are paid between 27 – 30k whilst recruiters with a few additional years of experience are paid between 30 – 33k. Overall, the standard go-to salary for most agencies at this level of experience is 30k.

Managing / Principal Recruitment Consultant (3 – 7 years of experience)

HKD $35,000 – 40,000 per month

Newly promoted managing/principal recruitment consultants are paid a salary around 35k whilst recruiters with a few additional years of experience are paid slightly higher at 40k.

Manager (5 – 10 years)

HKD $40,000 – 55,000 per month

Newly promoted managers are paid a salary between 40 to 45k whilst managers with a few additional years of experience or managers who are managing larger teams are paid between 50 to 55k.

Associate Director (7 – 13 years)

HKD $50,000 – 70,000 per month

Newly promoted associate directors are paid a salary between 50 – 60k whilst associate directors with a few additional years of experience, associate directors who are managing larger teams or associate directors with more P&L responsibility are paid between 60 – 70k.

Director (10 – 15 years)

HKD $60,000 – 85,000 per month

Newly promoted directors are paid a salary between 60 – 70k whilst directors with a few additional years of experience, directors who are managing substantially larger teams or directors with more P&L responsibility are paid between 70 – 85k.

Managing Director (12 + years)

HKD $80,000 – 125,000 + per month

Newly promoted managing directors are paid a salary between 80 – 90k whilst managing directors with a few additional years of experience, managing directors who are managing entire or regional offices or managing directors with regional P&L responsibility are paid between 100k – 125k and upwards.

Factors influencing salary ranges

The salary ranges above should provide a rough guide of the general market rate. There are certain factors that may affect your salary or cause outliers:

  • Billings can highly affect salary ranges. For example, if you start developing and billing ahead of others, you will be promoted faster where you could be earning a much higher salary than someone with an equivalent amount of experience
  • All agencies have a commission or bonus scheme that return earnings which vary vastly. If you have a lucrative scheme, as a trade-off, your base salary may be lower than the market rate
  • Management responsibilities can increase salary. For example, the more recruiters a manager is managing, the more likely it is they will have a salary at the higher end of the range
  • P&L responsibilities can increase a recruiter’s salary. For example, if a recruiter is at Associate Director level but managing a team as well as the entire office P&L, they could expect the higher end of the range
  • Some agencies use different titles for the same level of experience. In this case, you can refer to the brackets containing the years of experience for each salary range

Typical salary increments

Typical salary increments we see when moving to a new agency are between 10 to 16%.

Achieving an increment above 16% is possible but can only be leveraged in a few select situations. Hypothetically:

  • You have a solid track record of billing success in the same practice you will be joining with your new employer and you play a crucial part in the long-term vision of the business
  • You have a rare skill set in a candidate-short market such as an experienced technology director of a contracting recruitment manager

Increments are not always guaranteed and matching your current salary does happen in these situations:

  • You have changed your specialisation to a market you’re passionate about, your new employer is happy to make an investment in you but you require more time to become profitable
  • You have relocated internationally, your new employer is happy to make an investment in you but you require more time to become profitable
  • You have only recently joined your current firm (< 6 months) and have not managed to achieve your strive yet
  • Your billings are not outstanding in your current firm but you have good potential in your new firm with your drive and motivation
  • You’re moving jobs in adverse market conditions, your employer wants to make the hire but can only get budget approval for a matching or lower base

COVID-19 impact

COVID-19 has impacted salaries across the Hong Kong market. During the circuit breaker, there were a number of firms who cut employee salaries by 10 – 20% to adjust to the decline in revenue.

For recruiters changing jobs, the salary increments mentioned above were challenging to secure. Between April to July, the limited offers that were made matched the candidate’s last drawn salary or in some cases offered a lower salary (with a custom commission scheme to adjust for lost income).

Today, there is still a level of caution when it comes to hiring but we have certainly seen an improvement. Salaries that are offered in today’s market are determined on a case-by-case basis. Firms that are performing well in less affected markets are able to offer salary increments to attract great talent in a cautious market.

All in all, a recruiter can always increase their earnings through commission but having an attractive base salary still plays an important part when it comes to securing great talent.

If you feel that you’re being underpaid, please feel free to reach out to me by connecting on LinkedIn or email at cameron@vocay.io.

Interested to know what the average billings of a recruiter in Hong Kong is? Find out here.

If you find these recruitment articles insightful, please consider subscribing for exclusive articles like this one direct to your inbox every Thursday.

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Recruitment Salary guide

What’s the average base salary of an agency recruiter in Singapore?

When recruiters change agencies, the driving motivations behind a move are rarely solely due to a base salary. A combination of other factors, such as hitting a glass ceiling, an issue with a line manager or misalignment in recruitment methodology are more common.

Some would argue that as agency recruitment is a performance-driven role, there should be a bigger focus on potential commissionable earnings over the base salary itself.

Whilst many recruiters have this mindset, a competitive base salary still plays an important part when changing jobs and can sometimes be the key to the final piece of the puzzle. 

Are you being paid in line with the market average in Singapore? What is a competitive base salary in Singapore? What factors influence what base salary you’re offered? In this article, we answer these questions.

The salary ranges in this guide were gathered after working in the recruitment to recruitment industry in Singapore between 2016 to 2019. COVID-19 has created a shift in salaries. This shift has not been accounted for in this guide, but we have commented on the pandemic’s impact at the end of this article.

Associate Recruitment Consultant (0 – 1 years of experience)

SGD $2,500 – 3,500 per month

Fresh grads are paid a salary between 2.5 – 3.3k whilst professionals with 0 – 1 years of experience in another industry transferring into recruitment can leverage a higher salary between 3.3 to 3.5k.

Recruitment Consultant (1 – 3 years of experience)

SGD $3,500 – 5,000 per month

Newly promoted recruitment consultants are paid between 3.5 – 4k whilst recruiters with a few additional years are paid between 4 – 4.5k. Recruiters with niche market experience and a good track record can leverage a salary in the higher end of the range between 4.5 – 5k.

Senior Recruitment Consultant (2 – 5 years of experience)

SGD $5,000 – 6,000 per month

Newly promoted senior recruitment consultants are paid a salary between 5 – 5.5k whilst recruiters with a few additional years of experience or highly specialised niche market experience can expect between 5.5 – 6k.

Managing / Principal Recruitment Consultant (3 – 7 years of experience)

SGD $6,000 – 8,000 per month

Newly promoted managing/principal recruitment consultants are paid a salary between 6 – 7k whilst recruiters with a few additional years of experience or highly specialised niche market experience can expect between 7 – 8k.

Manager (5 – 10 years)

SGD $7,000 – 9,000 per month

Newly promoted managers are paid a salary between 7 – 8k whilst managers with a few additional years of experience or managers who are managing larger teams can expect between 8 – 9k.

Associate Director (7 – 13 years)

SGD $9,000 – 12,000 per month

Newly promoted associate directors are paid a salary between 9 – 10k whilst associate directors with a few additional years of experience, associate directors who are managing larger teams or associate directors with more P&L responsibility can expect between 10 – 12k.

Director (10 – 15 years)

SGD $11,000 – 15,000 per month

Newly promoted directors are paid a salary between 11 – 13k whilst directors with a few additional years of experience, directors who are managing substantially larger teams or directors with more P&L responsibility can expect between 13 – 15k.

Managing Director (12 + years)

SGD $14,000 – 19,000+ per month

Newly promoted managing directors are paid a salary between 14 – 17k whilst managing directors with a few additional years of experience, managing directors who are managing entire or regional offices or managing directors with regional P&L responsibility can expect 19k and upwards.

Factors influencing salary ranges

The salary ranges above should provide a rough guide of the general market rate. There are certain factors that may affect your salary or cause outliers:

  • Billings can highly affect salary ranges. For example, if you start developing and billing ahead of others, you will be promoted faster where you could be earning a much higher base salary than someone with an equivalent amount of experience
  • All agencies have a commission or bonus scheme that return earnings which vary vastly. If you have a lucrative scheme, as a trade-off, your base salary may be lower than the market rate
  • Management responsibilities can increase salary. For example, the more recruiters a manager is managing, the more likely it is they will have a salary at the higher end of the range
  • P&L responsibilities can increase a recruiters salary. For example, if a recruiter is at Associate Director level but managing a team as well as the entire office P&L, they could expect the higher end of the range
  • Some agencies use different titles for the same level of experience. In this case, you can refer to the brackets containing the years of experience for each salary range

Typical salary increments

Typical increments we see when changing jobs in the market are between 10 to 15%.

Achieving an increment above 15% is possible but can only be leveraged in a few select situations. Hypothetically: 

  • You have a solid track record of billing success in the same practice you will be transitioning into with your new employer
  • You have a rare skill set in a candidate-short market such as a contracting recruitment manager

Matching your base salary also happens in the market in certain situations:

  • You have changed your practice to a market you’re passionate about, your new employer is happy to make an investment in you but you require a longer runway to become profitable
  • You have relocated internationally, your new employer is happy to make an investment in you but you require a longer runway to become profitable
  • You have only recently joined your current firm (< 6 months) and have not managed to achieve your strive yet
  • Your billings are not outstanding in your current firm but you have good potential in your new firm
  • You’re moving jobs in adverse market conditions, your employer wants to make the hire but can only get budget approval for a matching or lower base

COVID-19 impact

COVID-19 has impacted salaries across the Singapore market. During the circuit breaker, there were a number of firms who cut employee salaries by 10 – 20% to adjust to the decline in revenue.

For recruiters changing jobs, the salary increments mentioned above were challenging to secure, especially during the circuit breaker. During this period, we saw offers being made that matched the candidate’s last drawn salary or in some cases offering a lower salary (with a custom commission scheme to adjust for lost fixed income).

Post-circuit breaker, there is still a level of caution when it comes to hiring but we have certainly seen an improvement. Salaries that are offered in today’s market are determined on a case-by-case basis. Firms that are performing well in less affected markets are able to offer salary increments to attract great talent in a cautious market.

All in all, a recruiter can always increase their earnings through commission but having an attractive base salary is not something they would turn their head away from.

Interested to know what the average billings of a recruiter is? Find out what they are in Hong Kong here and in Singapore here.

Next week, we’ll be publishing Hong Kong’s base salary ranges. If you find these recruitment insights useful, please consider subscribing for exclusive articles like this one direct to your inbox every Thursday.

Categories
Recruitment Salary guide

The ultimate guide to commission schemes in recruitment

How does a commission scheme work? As a recruiter, are you making enough money with your scheme? As an agency, how competitive is your commission scheme in the market? You’re a recruitment entrepreneur starting a new business, what scheme should you use?

In this complete guide to commission schemes in recruitment, we answer these questions and much more.

Here’s a summary of what we’ll cover:

  1. Two common types of commission schemes
    1. Non-discretionary
    2. Discretionary
  2. Understanding the components
    1. Qualification period
    2. Threshold
    3. Percentage tiers
    4. Deficit
    5. Payment
    6. Retaining commission
  3. What is a competitive return

1. Types of commission schemes

Non-discretionary

A non-discretionary commission scheme is black and white. The components are transparent and laid out before you join. You’ll know exactly what you’ll be earning depending on the revenue you generate for the organisation. Non-discretionary commission schemes are more common than discretionary in the recruitment market.

Discretionary

A discretionary commission scheme is when your commission is paid at the company’s discretion. Whether you’ll get paid or not depends on a number of factors; a majority of these factors are related to your own performance and perceived contribution.

More often than not, you will be paid if you perform to or above agreed targets. However, if the company as a whole is not performing, other consultants’ performances may be taken into account and this may reduce the amount of commission you receive.

A discretionary commission scheme may also be built around your perceived contribution towards a particular placement. For example, if you were involved in the process flow management and closing of a placement, but the successful candidate was identified by one of your colleagues, then the proportion of commission allocated to you could be decided by your manager, at their discretion. In this case, commission would probably be distributed between yourself and your colleague involved in the identification of the candidate. 

Discretionary schemes are less common in the recruitment market.

2. Understanding the components and how competitive they are

Qualification period

The qualification period is the time in which a recruiter’s commission is assessed.

The most common qualification period is a quarter, although some companies have a monthly or annual qualification period.

A qualification period is not related to the period that you’re paid, which is covered later in this article.

Threshold

The threshold is the amount of revenue a recruiter must generate before commission becomes payable.

Multiplier of base

A threshold is commonly calculated as a percentage multiplier of your base salary. The standard multiplier in the market is 9 x your monthly base salary for the quarter (the qualification period). For example, if you’re on 5k per month, the calculation would be 5k * 9, which equals a threshold of 45k for the quarter. Some firms offer lower thresholds, such as 7.5 x your base salary per quarter, or if you’re very lucky, 6 x your base salary per quarter.

The advantage of this calculation is that when you’re on a lower base salary, your threshold is lower and on the flip side, as your base salary increases, so does your threshold.

As your base salary increases, so does your threshold, meaning your total earnings will stay roughly the same if you bill the same amount, despite your base increasing.

Flat figure

A threshold can also simply be a flat revenue figure rather than the percentage multiplier structure above. The standard revenue figure for this type of threshold is between SGD 40 – 60k.

The advantage of this calculation is that, as your base salary increases, your threshold remains the same. The disadvantage is that when you’re on a lower base salary, your threshold is more challenging to surpass.

As your base salary increases, your total earnings will also increase if you bill the same amount.

No threshold

A handful of firms offer a no-threshold scheme, although there is a trade off as percentage tiers (discussed next) are often lower.

Less common variations of a threshold include calculating commissionable income from your total revenue for the qualification period first, and then subtracting base salary. Whilst this still yields competitive returns, it shouldn’t be confused with a scheme that offers a threshold of simply just your base salary, as the calculation is different.

Percentage tiers

When you surpass your threshold, you’ll be eligible to collect commission on the amount above your threshold (total revenue – threshold). How much depends on the percentage pay-out of the scheme.

A majority of firms operate a tiered percentage structure. In this structure, percentages will start at a specific amount and increase in tiers as you generate more revenue. Percentages commonly start at 20 – 35% and increase in tiers until 40 – 45%, and even 50% in some companies. Some firms offer above 50% but it may be extremely challenging to generate enough revenue to earn that.

Some firms operate a simple flat percentage structure. In this structure, you’ll earn the same percentage on any revenue you generate above your threshold.

In some rare cases, some firms offer a tiered percentage structure, but rather than the percentage being based on the revenue you generate, it may be based on other factors at the discretion of the company, such as how many clients you’ve brought in or how you’re performing in comparison to your expectations.

Deficit

Some firms have a deficit. If your firm has a deficit and you don’t achieve your sales target, you will go into a deficit. The amount by which you missed the sales target in the previous qualification period will roll over to the next qualification period. This means that you’ll have to make up for the revenue that you fell short of in the previous qualification period before earning commission.

Whilst deficits are less common these days and unfavourable for obvious reasons, there’s a reason why companies still use them and it’s important not to overlook this. Schemes with deficits offer a high risk, high reward option. You’ll find that with these schemes the threshold may be lower and percentage yields may be higher. As the firm is taking a risk in losing money based on a highly lucrative scheme, they need to protect themselves if sales targets are not met.

Certain firms wipe the deficit clean from time to time if non-revenue related performance has been strong.

Payment

Different firms write revenue on the board at different times. Revenue is commonly recognised on the start date of a candidate or when the invoice is settled by the client.

Once revenue is recognised, your commission becomes payable. Commonly the payment will be made at the start of the upcoming qualification period. For example, if you’re due $30k for placements in Q1, you’ll be paid the 30k at the start of Q2.

There are some firms who don’t relate the qualification period to the payment period. For instance, take the example of a firm who has a qualification period of a year but pays monthly. If you’ve earned 10k in Feb Q1 under the scheme, that will be payable in March, even though the qualification period concludes at the end of December.

In the market, firms often pay on a quarterly basis, a handful of firms pay on a monthly basis and some firms also pay on an annual basis.

Most firms will withhold commission until the client pays the invoice even if they’re late paying, despite the commission being payable to the consultant. Whilst most consultants understand the reason behind this, naturally they would prefer a scheme where they’re paid despite when the client pays the invoice.

Retaining commission

Some firms in the market retain a percentage of your commission over a qualification period or over a year. The average amount retained can range anywhere from 5 – 20% and upwards to 50%. To collect that commission, the firm will often set additional targets, the most common being to surpass your threshold for three out of four quarters of the year.

If you hit the target and collect the commission back, some firms return the same amount and others will offer interest on top of the collectable amount as a reward. If you don’t hit your target, the company retains the commission.

This mechanism is strong for retaining employees and encouraging consistent performance, however it receives mixed opinions from recruiters.

Retaining commission is a newer addition to schemes and has become more common in recent years.

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3. What is a good commission scheme?

Now that we’ve looked through the various standard components of a commission scheme, what’s a good one and are you being paid enough?

When it comes down to it, a majority of commission schemes in the market, although varied in structure, end up returning a similar percentage return on your billings.

The percentage return of your billings, including base salary and commission, is considered to be competitive around 33%.

If you’re earning less than 33%, it doesn’t necessarily mean you have a bad commission scheme. You may be working with a large global player who offers access to established relationships with clients, allowing you to maintain a strong pipeline without the pressure of business development. They may also offer more support in the form of learning & development, marketing and more.

If you’re earning more than 33%, you’re earning a competitive amount in the market.

The graph above shows the example of total percentage return of billings vs quarterly billings for a boutique recruitment agency with a base salary of SGD $5,000 and billings ranging from 0 to 250k in quarter. The threshold in this example is 7.5x monthly base salary with percentage tiers ranging from 30 – 50%. This particular example includes CPF, so for non-Singaporeans or PRs the percentage return would be slightly lower.

The graph starts at a higher percentage return of nearly 60%, as at lower billings levels, a majority of your return will come via your base salary. At that stage, the agency is losing money on the consultant. The return averages at roughly 38% on standard billings of 75k per quarter. As billings increase, say to 200k per quarter, the return goes up to 42%.

In the early stages of your career, finding a platform with established relationships that has a good percentage return is the sweet spot. When you become more experienced and you’re ready to step into a new environment where the risk of starting or building a desk is higher, you’ll have the opportunity to reap the rewards with higher percentages.

Do you want to learn more about recruitment entrepreneurship?

As the Co-Founder of Vocay, I have run small teams of recruiters and I love blogging about entrepreneurship, especially in the field of recruitment. My business partner Roger Smart built Charterhouse Partnership from zero to 180 recruiters across 5 offices and he also writes articles.

If you’re interested to learn more about recruitment entrepreneurship, and if you found value in this article, please consider subscribing or following us on LinkedIn to have new articles for recruiters like this delivered directly to your inbox.