Bigger the Company, Smaller the Commission?

There are plenty of reasons to consider the size of an employer when you’re looking for a new job. This article will give you reasons to consider a blue chip company. And this article will highlight everything you need to know about a smaller business.

There are positives and negatives to each of course, and much of it will depend on how you see your career and immediate to medium-term aspirations.

Whatever the size of your employer, there are a fair few permutations of being in that business.

One correlation that’s hard to ignore is the relationship between the size of a business and the generosity of the commission scheme or bonus structure.

I’d venture in the past I’ve seen over a thousand recruitment businesses describe their commission scheme as ‘industry leading’. I’d guess 99% of those making the claim aren’t being truthful. It’s a good claim though isn’t it?

And really, who’s checking? The thing is, recruiters don’t want claims. They want evidence. If you’re claiming your commission scheme to be the best, why wouldn’t you share the details? The actual take home or pay cheque of your Consultants?

So, a question worth asking is… Is it ‘the bigger the business, the smaller the commission?’

Generally, yes

By and large there are less large companies that will pay ‘industry leading’ commission in comparison to smaller agencies.

Therefore it’s fair to suggest that if you want to earn more bang for your buck (a higher commission on the figures you bill) you’re better off being at a smaller company.

There are a lot more overheads when running a large company. There are more people in the business, and therefore the fixed running costs will be proportionately higher. This goes for almost every consideration. From offering free fruit to the Christmas party.

Therefore, you’ll find the financial offering (on paper perhaps), less than those with smaller overheads.

Investors in People?

Larger employers in recruitment, have typically been in business for longer. There are, of course, exceptions to this, but it’s a fair thing to assume.

So, it’s also probable these businesses have a greater retention rate in comparison to their smaller counterparts.

Why?

Because you can’t grow a business if you’re unable to retain top talent.

Retention of great recruiters, or even average recruiters, is the number one difficulty for any business with aspirations of growth.

Meaning, larger businesses are more likely to have considered environmental factors in your happiness.

You’re more likely to have a greater pension contribution with a larger company. There’s more likely to be a bigger benefits package. There’s a higher chance of medical cover. Life assurance. The list goes on.

There’s also a smaller chance of the company not going under. An element that’s pretty important no matter how long you see yourself there.

Euros

Smaller Percentage ≠ Smaller Commission

The financial reward you physically see in your bank account isn’t solely dependent on the commission scheme.

Yes, you could go and work for a startup that has the best commission scheme in the world. However, if you don’t have any clients or candidates and every business pitch is a struggle, are you really winning?

Against a scheme that’s ‘industry standard’ where your billings are through the roof?

One of the biggest reasons larger companies have smaller bonus and commission schemes is that money’s is often piled back into the business to assist with making placements.

Maybe you have a marketing team? Maybe there’s software that adds CVs to your database in two seconds flat? Perhaps money spent on networking or entertainment budgets?

However it’s done there’s probably a lot more on offer to you compared to working for a smaller, less established agency.

One thing you’ll want to consider is your access to this spend.

How much does the money going back into the business actually affect your own enterprise? That analysis alone will determine whether the bonus deficit is worth it. For example, if you’ve got a top notch personal brand and get applicants from your own social media efforts, is the Marketing team actually giving you value?

Similarly, is the lack of freedom and agility to move where the need is, a hindrance to your ability to fill roles? You may have great marketing and sales assistance, but a restricted market means your reach is more limited.

If you’ve got a network that provides you with a constant stream of revenue no matter where you’re working, a higher percentage scheme would probably work out better for you.

Take Home > Percentage

The money in your bank account is the bottom line for you as a Recruiter.

Not necessarily any commission scheme, bonus (discretionary or otherwise) or other monetary factors. Therefore think about what, on average, people are taking home in the business. And if you’re moving jobs, ask your potential new employer.

It’s an incredibly important question.

What support will you need to keep hitting great numbers and is that on offer?

Perhaps the business is one which has a large graduate intake every year, under the pretence a lot of them won’t perform and will be let go. It happens of course, but who do you think is paying for that gamble? The consistent fee earners are. Which, all said and done, is you.

A smaller company may be more hesitant over who they hire. Especially if they’re unable to cover the cost of people not working out.

Therefore you’re more likely to be a lone wolf, but one who has a higher commission scheme and wider remit.


It is, of course, possible to apply maths to this melon scratcher. Meticulously work out what a company’s offering is worth to you.

All you have to do is monetise each micro contribution and add it to a sum.

A pension has a worth. Equity too. Life assurance. Medical. You might even want to work out how much the christmas party will cost you. I’d probably stop short of free fruit, but each to their own.

Then you can work out, for your average year’s billings, what the respective commission scheme will pay. Add in the base salary, and Robert’s your Father’s brother!

Once you have a financial weighting, you’ll be swayed towards certain businesses, even if that’s not the one you’re in right now. And then other factors like culture, perceived happiness, location et al can all come into play.

Just make sure you do your research.