Below are some red flags to look out for in commission systems in recruitment companies
- Rolling draws that last a year or more
- Fixed fees per placement unless you are working on a very high-volume and low fee per placement desk.
- Commissions that are paid out many quarters after the actual calculation quarter.
- Holding long term incentives payouts which are paid when you leave or years later and have lots of conditions attached and fine print which means the company has a nice cashflow to operate, but you don’t
- Companies that continually change their commission schemes, often but not always to cope with changing market conditions
- Companies that tell you when changing a commission scheme that “they want to improve the culture, unity and direction” but probably that is just corporate “Spin” and can be translated into they want to take more profit.
- Opaque, complicated, and very difficult to understand commission systems.
- Schemes that keep you waiting forever for your hard earned commission payout
- Any new schemes that negatively impact your income and are forced upon you at career milestones (hitting promotion targets for example)
Remember your work, effort, skills and results need to be rewarded. Don’t fall victim to the Stockholm Syndrome effect that some companies and their senior leadership like to create. Understand your value!
