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The Role of the Account Manager

The role of the staffing Account Manager in Third Party Contigency Recruiting is new business development and client relations.  Typically, Account Managers are brought on to call clients, take job orders, and manage the employment process for the hiring manager.

Account managers are paid in several ways, with the most common being a base plus commission package with some kind of expense report for the ever present "lunches."  The salary range of the staffing salesperson starts at $24,000 and goes up $60,000 (very few are paid more on the base).  For some companies, the commissions are "pooled" to create team work, but in most cases, account managers and recruites 'own" clients and candidates, and are paid for successfully making a placement.

The general, most common kind of commissions are based on a percentage of the net profit, which is defined as the full fee in direct placement, and the net profit in contract staffing.  Thus, if you make a direct placement for $20,000, the account manager gets either  10% of that  $20,000 or  20% of his "half" of that fee (with the other half going to the recruiter).  When the percentage is higher, there is always a catch (like 30% of the net profit, but no base salary).

If you are a contract recruiter, the net profit is defined as the base rate minus the contractor salary and a fixed percentage of the contractor salary (known as the burden) that runs from 14-28%.

So if you have a Bill Rate of $100/hr, a contractor salary of $60/hr, and a burden of 20%, then your net profit per hour would be $100-($60 x1.2)= $28.

The mark-up is defined as the bill rate divided by the pay rate - in this case 67% ($100/$60).
The  Gross Margin percentage is the net profit divided by the bill rate ($28/$100) for 28%.

When a company asks for gross margin percentage, they tend to look for account managers who were successful at negotiating 25-30% gross margin percentages.

What does it mean?  You put all the numbers together, and you know that if you want to be a successful six figure producer at a Third Party Staffing Firm, you'll need to get credit for around $300-$350,000 a year ($600-700,000 total) to produce $100,000 of personal income. 

P.S. The best package I ever personally heard for recruiting (in St Louis) was a $60,000 base with a 10% commission on net profit, with the fee split between one recruiter and one account manager.  As you make more, the commissions were often adjusted up.

PPS. The best way to maximize your money was to get full credit for the recruiter and the account manager.  Most account managers get this, and it's one of the primary sources of conflict between the two groups.  After all, most account managers will fight harder for a candidate they found then for that of their recruiter.