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Discretionary vs Transparent incentive scheme for recruitment consultants - What is it all about?

We all know recruitment consultants work very hard every day to improve people’s lives, and therefore should be rewarded for their hard work. An incentive scheme is one way to compensate for a recruitment consultant’s effort and one that many recruitment agencies have adopted.

However, I noticed that the general understanding of the different incentive schemes offered by recruitment agencies here in Japan, are often not properly explained to my fellow recruiters or those interested to start a career in this industry.

Let me try to share a bit more information about it and help you understand better what this is all about.

In general, recruitment agencies offer either a discretionary incentive scheme or a transparent incentive scheme.  In any case recruitment consultants usually have a base salary and will be given incentives (bonus) on top, depending on how much revenue (sales) they generate for the company.


Discretionary incentive scheme

The discretionary incentive scheme is generally offered by big corporations (there are always some exceptions of course).

In this situation, consultants will work toward achieving individual revenue target. Once achieving that revenue target, you will be given a guaranteed range of incentives. However it may fluctuate depending on various factors such as:

  • Did the whole team achieve the quarterly target?
  • Did each consultant contribute equally to the team revenue target?
  • How does the manager value your personal contribution to the team?
  • Did you achieve your KPIs?

The idea is to really make your team members work together equally and support each other, so all can be performing well, and deliver equally what is expected from them. Reality is that sometimes it brings great surprises, but can also bring some disappointment.

For example, In an ideal situation those who generate more revenue should be rewarded more, however in this system it may not allow them to get the most of it as all the factors mentioned above will be reviewed by the decision makers, (your managers) at their discretion.


Transparent incentive scheme

On the contrary, some companies often mid size firms or small boutiques, would offer a clear and transparent incentive scheme, that essentially is a more meritocratic system, depending on your individual performance only.

Whether your work in a team with team KPIs targets, quarterly revenue targets, or on your own, your incentive will simply depend on your individual performance and own generated revenue. Because we call it a transparent incentive scheme, when entering the company you will be told how much % incentive is guaranteed from your personal generated revenue. This way it is very simple to keep track and forecast your potential incentive earnings.

That scheme of course does not mean there won't be cooperation with your teammates, but it means that you will grow in a friendly competitive environment, since your hard work will be 100% based on your performance.


So what incentive scheme works best for you?

I would like to conclude by saying there is not one system that is working better than the other but I would like to say that depending on your needs, ambitions, career goals, whether you are new to the industry or an experienced recruiter, you should take this with great consideration.

As for working as a recruitment consultant at Morgan McKinley, I can assure you we value teamwork and believe in supporting each other and working together to achieve common goals. However, we have a meritocratic working environment, where each consultant is given transparency on their remuneration from day 1.

If you want to know how much incentive you can potentially get at Morgan McKinley, it would be my pleasure to meet with you and share more about it.

Get in Touch anytime!

 

 

  • Nov 01, 2019
  • Careers , Japan
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Elliott Vie

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