TRUE: BountyJobs Says Average Contingency Recruiter Fee Paid Is 20%…

There are a couple of topics that get the blood flowing for third party recruiters.  Talk about fees, and talk about BountyJobs.

Fees you know about.  In case you aren't initiated related to what BountyJobs is, BountyJobs is a Bountyjobs-269x49 centralized marketplace where corporate recruiters/companies can go to post a job, include the fee they're willing to pay, then have 3-5 recruiting firms (who are registered and approved with BountyJobs) compete to fill the job in question, with each firm submitting candidates and generally trying to beat their competitors to the punch.

If it sounds a lot like contingency recruiting, it is.  The thing that gets the Irish going in recruiters is that BountyJobs starts with the concept of multiple recruiters being involved and competing in each search, which means contingency recruiters never have a chance to develop a special, exclusive relationship with a client.  It's competitive from the start, with no double talk about "you're the only one I'm dating at this time".

In short, BountyJobs seeks to be a disruptor in the recruiting scene in this way, an avenue to remove some of the inefficiencies in the game for companies.  It's an interesting model, and one that 3rd party recruiters shouldn't automatically discount as a form of lead generations.

With that type of model, you would think that fees paid to recruiters who are registered and compete on BountyJobs will be much lower than average.  After all, the big play with the model is about efficiency, and what is it that gets removed when efficiencies of scale are created?  Right – cost.

If you thought that, new data pulled from the BountyJobs ecosystem says you're wrong.  BountyJobs is set to release their first version of a data set called "The BountyJobs Index", with CEO Mike Hard breaking down the fee situation at BountyJobs:

"On BountyJobs, the corporate recruiter sets the percentage of salary that he or she is willing to pay a headhunter for a successful hire. The fee is posted with the job requisition, and headhunters can choose to accept the fee and submit candidates.

“When the recession happened, everybody thought headhunters would be so desperate, with so few jobs being posted and so many people in the job pool, that headhunters would accept much lower fees,” Hard said. “You would expect fees to go down, but they didn’t. The headhunters who have survived are a very strong and resilient group.”

Between Jan. 1, 2009, and March 31, 2011, the BountyJobs Headhunter Index shows:

•• The average headhunter fee posted on BountyJobs (the “bounty”) was 19.72 percent of candidate salary.

•• The lowest rates were posted in the second quarter of 2009, when the average dropped to 19.45 percent of candidate salary.

•• The highest rates came in the last quarter of 2010, when the average hit 20.02 percent of candidate salary.

“It shows that headhunters who survived the worst recession in 50 years and continued to offer quality results were able to maintain their fees,” Hard said.The strong consistency in the average fee rates for headhunters bodes well for the headhunter industry and the corporate recruiter-headhunter relationship.

Bounty jobs 
I shared some of the data with my recruiting friends who are aware of the BountyJobs model and think the end game purpose is to make them extinct.

Their response: "I don't believe that".

Predictable response?  Maybe.  But I think the data is true and underscores what the market has been trained to expect as a fair price for contingency services.  You know the dance:

Recruiter: "We're a retained search firm, and our normal fee is 25 to 30%."

Company: "We can't pay a dime over 15%.  And I need you to take it on contingency".

Recruiter:  "Wow.  I can't do 15%.  Let me check on what I can do and get back to you.

<a day of silence>

Recruiter: "I pushed for an exception.  Can you do 20% contingency?"

Company: "Done.  20% it is."

It's the dance you've seen hundreds of time before.  The dance has trained the market on what a fair price for contingency is. The BountyJobs index proves it, because the companies are naming their own price.

Quality of search?  Probability to close? That's up to you to figure out as a third party recruiter, and no index from BountyJobs will help you do that.

Good luck… Check out the full whitepaoer on the BountyJobs Tracking Index here….

FOT Background Check

Kris Dunn
 Kris Dunn is Chief Human Resources Officer at Kinetix and a blogger at The HR Capitalist and the Founder and Executive Editor of Fistful of Talent. That makes him a career VP of HR, a blogger, a dad and a hoops junkie, the order of which changes based on his mood. Tweet him @kris_dunn. Oh, and in case you hadn't heard the good word, he's also jumped into the RPO game as part owner of a rising shop out of ATL, Kinetix. Not your mama's recruiting process outsourcing, that's for sure... check 'em out.

19 Comments

  1. Pete Radloff says:

    I dont think we’ll see the end of the contingency recruiter, but I think that this model will assist the less experienced Corporate Recruiters, or HR folks who don’t know the “going rate”. I’ve lost count of how many firms have called giving the typical elevator pitch, practically verbatim but just substituting their name and company. Then they tell you that 30-35% is their standard. When you push back a bit, and/or tell them to look at your profile (if you came from an agency), then they all of a sudden have some flex room.
    Bounty Jobs (I have not used it myself, so I can’t speak 1st hand)seems to level out the playing field a bit, and kill the BS to a certain degree.
    Point is, until the agencies stop putting inexperienced recruiters in a desk with a call sheet and a canned pitch, we’ll continue to see some form of this.

    Reply
  2. Fees on BountyJobs are just fine. They are one of our best 3rd party relationships! BountyJobs will continue to be a trusted partner in this positive staffing cycle.
    Chris Maruschak
    Managing Director
    Three Pillar Staffing

    Reply
  3. Trevor Renner says:

    I find the recruiter side of the bounty jobs market place does keep the employers in check of posting reasonable fees. Once in a while I might see a fee that is too low, so I just choose not to work it. They have plenty of jobs to work at good fees.
    Bounty Jobs contract also provides a small incentive to employers with longer guarantee times on the candidates. 15% or less is 60 days and 90 days over 15%.
    Over the past 12 MO’s I have made 30 placements on Bounty Jobs a total 40 to 50% of my billings. I would never had the time to develop those contacts with out them.
    The notion that Bounty Jobs end game is to make us extinct is absurd.
    If Bounty Jobs has some alternative motive, other then an open market place, we would have seen it by now. They have been around for 3 to 4 years now and have not deviated from what they set out to be a market place for employers and recruiters.

    Reply
  4. This will look familiar to anyone who does a lot of temp staffing for larger employers – the VMS/MSP model is quite similar (of course, since you have hourly temps to manage and a weekly invoice cycle to process, there’s a bit more administrative overhead, which requires a bit more from the intermediary).
    There’re plusses (reduced fees, reduced cycle time – theoretically), and minuses (for instance, one area where these models add an amazing amount of inefficiency is in communicating the requirements to the agencies), to this approach. But if the sticker price is your top priority, they always look like a great buy from the hiring side.

    Reply
  5. Daryl says:

    Frankly, I am disgusted with Bountyjobs and it’s “claims” of helping the industry. I have 3 very large corporate clients who have signed with them over the past three years and have seen my relationships with these clients tank. Good service is built on relationships. Period! There is NO RELATIONSHIP using a web portal like bountyjobs. Half the time when you submit a candidate, you don’t even get a response. It’s pathetic.
    * There is no direct communication with clients. How is that helpful??
    * My receivables went from net 30 of invoice date to 90 days from start date. How does that help my business??
    * My fees were cut by 5-15% in most cases. How does that help my business??
    * Some bountyjobs clients want a 180 day guarantee, and bountyjobs approves it. Really? Money back after 6 month? Where is the responsibility of the candidate and employer to make it work out. The recruiter has nothing to do with someone leaving a job after any time as far as I am concerned. But we are punished for it. The client interviewed and hired them. Shouldn’t they be responsible?? That like saying, “hey, you introduced me to my wife and then she cheated on me after 6 months..It’s your fault”. Really? Sorry dude. Yeah, I should have never introduced you. Shoot me.
    All bountyjobs has done is serve themselves and the hiring facility. There is no benefit to the recruiter. More reqs?? Sure, but more competition with those reqs. Instead of competing with 3-4 other companies, now all recruiters compete with hundreds.
    I use bounty jobs only because my clients do, but I won’t be for much longer. I sure would like to see bountyjobs send out a recruiter survey to see how it has affected our business. All I see are company testimonials. Sure, they love them because that’s who bountyjobs works for. How about helping the recruiters who are doing all the work for free, in HOPES of making money? How about making it mandatory that client take calls from recruiters so we can get important details that are ALWAYS left out of the req?? How about doing something besides skimming off the top to make a buck?? Bountyjobs is a joke, and I would like to see 1000 recruiters join me to tell the world about it.
    bountyjobs, bountyjobs, bountyjobs, bountyjobs, bountyjobs, bountyjobs, bountyjobs, bountyjobs… Cmon, find this post you Googler’s..

    Reply
    • Numlock says:

      All I hear you saying is “I’m not making as much money as I used to because I have competition now”. Things change. This is how capitalism works. Read “Who Moved My Cheese” .

      Reply
    • Nunya says:

      As a hiring entity, posting jobs on Bounty, I can tell you that I don’t want a personal relationship with you. Or your 2,000 colleagues who also want to “just talk for a minute about a great candidate.” I don’t have the time, and I’ve been BS’d too many times to believe that it will actually be just a minute, or that there actually is a great candidate. If you are a good recruiter with a good candidate who is the right fit for our job – prove yourself by submitting through Bounty. Or don’t. If you go away, that’s fine with me too.

      Reply
  6. Time 14Rich Cimini mentions an important Planes help

    Reply
  7. International Headhunter says:

    I have used BountyJobs before and quite frankly I was dissappointed. I see a lot of fees set at 10% to 15% on hard to find positions and the feedback (if there ever is any at all) could take weeks or months. I had a BountyJobs account manager check in with me every few weeks and when I told him that I still haven’t received any feedback all he could say was “Hmm…I’ll check on that for you”. I wouldn’t hear back again until the next time he checked in on me and still no feedback. Of course this is what you can look forward to AFTER trying to be approved to recruit on said position in the first place.

    The complete and total lack of not only a relationship with the client but also any human contact whatsoever does not do the recruiting process any good. I see absolutely no benefit to this at all. It seems to be a waste of my time which is why I ditched it.

    Reply
  8. Interesting says:

    Funny, recruiters are complaining about not receiving feedback when there are many candidates who feel the same about recruiters. This is one of the reason I try to stay away from recruiters as they don’t follow up at all. A simple phone call or email goes a long way with someone. You never know when they could be looking for a recruiter for hires they may have. Kudos to BountyJobs maybe they will help remove the non preformers to other careers.

    Reply
  9. Jim says:

    Try Direct Hire Portal. Much easier to fill jobs there.

    Reply
  10. Becky says:

    I’m curious to find out what blog platform you’re using?
    I’m having some small security problems with my latest site and I’d like
    to find something more secure. Do you have any solutions?

    Reply
  11. Jane Doe says:

    I am pretty disappointed with Bounty Jobs too. First of all, I don’t know if it’s the industry or what but everytime I submit a client, I’m told that “somebody already submitted this person.” When I ask the candidate, they have no idea what I’m talking about. Somebody is lying. The customer service/support and account managers are flat our RUDE. I had to jump through all of these hoops to prove that I received permission from the candidate to submit them only to have Bounty Jobs tell me that “someone already submitted this candidate.” WTF? I don’t really appreciate a bunch of recruiters vying for a job like a pack of hungry wolves only to have to employer give some lame excuse as to why they don’t want to use the candidate and then go behind your back and hire them anyway.

    Reply
    • Dominic says:

      Bounty has become so competitive that I know recruiters find candidates and submit them before talking to them just to get ownership. Waste of time with the way it is ran. We submit candidates that sit there for MONTHS at a time before, if ever, being opened. Now they don’t even put phone numbers for half of the companies that you’re recruiting for. Gives you a bad name with candidates when you can’t get a timeline or in most cases the right information as to what they want! Sometimes the decision to use them is made above the person in charge of checking it and they don’t even want to use BountyJobs.

      Reply
  12. Mike says:

    Direct Hire Portal is a joke in my opinion. We tried their service. Submitted some great candidates to one of their positions. Was told the candidate was moved to the second round of interviewing. Then all of a sudden one day, the job is missing from the DH portal, the candidates submitted via the portal are missing (as if they were never uploaded), and all of my emails/contacts to DHP are responded to with “we will look into it”. Until they just stopped responding all together.

    This lesson cost me $100. I’ll give it to you for free.

    Reply
  13. John says:

    Direct Hire Portal worked well for us, though your candidates will have to be strong to get the fill. They also number the amount of recruiters they allow on their site, so it took us a few weeks to get approved. We made 3 placements with them in the last 7 months. Worth checking out if you need some jobs to work on.

    Reply
  14. Dominic says:

    I also had a candidate rejected within BountyJobs and then found out they hired him within a month after. Had to wait a year to get fee!!!

    Reply

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