How Do Recruiters Make So Much Money? (so you can too)

Recruitment is one of those industries where you're going to meet people who are making $10K, $20K, even $50K in a month. And it happens literally as one person with a phone and a laptop. And for most people outside of recruitment, this just sounds absurd. I've been running my own recruitment business since 2016. Alongside running my own business, I've also supported others, some with no recruitment experience, making $30K in their first 3 months. And I've even helped people who transitioned from jobs where they were constantly being contacted by recruiters to start their own recruitment business because they understood the job better than the recruiter that was contacting them. So In this video, I'm just going to break down exactly how recruiters make this kind of money so that you can understand the mechanics of it and more importantly, everything that you need so you can get there yourself. So let's start with the basics. When a company is looking to hire, they have a few ways that they can hire the person. They can contact all of their old contacts. They can ask their old colleagues. They can ask past employees. They can ask their current employees for referrals. But now if you're operating a business where the hire is critical and they are in-demand professionals, then all of a sudden you will get to a stage where you will exhaust all of your avenues. And all that means is that you're operating in a business model where the people are so critical to the business that you need qualified professionals to actually get the job done. And when you hire somebody through a recruitment agency, you have two core routes. You could either pay them one time to go and find the person for you as a hiring manager, or you can pay them in installments. And in both cases, recruitment agencies are typically charging a 20% markup. So if a contractor is getting paid $200 per day, then the recruitment agency would charge 20% on top and bill the hiring manager. And if you're looking to make a one-time hire, let's just say it's a $100K a year salary, then typically recruitment companies will charge 20%. The difference is, do you get paid a lumpy fee upfront or do you build recurring revenue into your business? Because if you're building recurring revenue, then yeah, you get 10 contractors out, all of a sudden everything becomes a lot nicer. Now the question arises is, why are companies so happy to pay that amount of money and then do it again later on down the line as well? And that's because most people will hear 20% of the salary and they'll think, so expensive, too much to handle. But I want you to think about what happens when a company can't fill that position. Let's just take, for example, a sales role. If you have a business where you require salespeople to win new business, and on average sales professionals generate a million a year for your business, for every hire that you make adds another 1 million a year in revenue to your business. But the equal and opposite is also true. Every sales professional that you lose, you lose a million a year. So now for you to maintain, grow, or even replace somebody who's left, then for a year that goes by, call it about 80, 90, even 100 $24K a month. That's how much it's costing the business not having that person in play. So now if you're a growing team, you want to fill as many of these sales positions as you possibly can. And if you're losing employees, you need a replacement as quickly and fast as you possibly can, because every single hire knocks another million off either future revenue or current revenue. So now if you're about to lose a million a year, or you could gain a million a year by using a recruiter to make this particular hire, then $24K is not a lot of money. Because I don't know if your brain is wired like mine, but if I could spend $24K one time and then $120K a year to make a million a year, I would I'm doing everything to just do that as many times as I possibly can. So now if you are paying one-time $24K fees as a hiring manager, then the question arises, like, does this actually reset every single month or does recruitment income actually build over time? And this is where recruitment gets interesting because for most service-based businesses, as soon as you've completed a project, that's it, it's finished. But in recruitment, the way that it works is this. You fill that sales position and you hire a sales professional for that company who is looking for a really good sales professional. Then the moment you make that hire and they've made their first impact in the business, The hiring manager gives you a call and says, hey Mohammed, if you can find me another person like this, I would hire them tomorrow. And here's where it gets interesting because it actually compounds. It becomes easier. You've just spent a few months talking to the candidate, supporting them through their interview process and everything. You got to know them really well. So now the second time round that you do a search for the exact same company, it's actually a lot easier because now you don't have to take as much details as what you did the first time around. You already have that information. You already know what they hire for and you've been through the interview process alongside the person that you've just represented. So now now you become the filter for the company and you present to them only the people who are the best. And this is where it becomes so much more interesting because now you can forecast and predict your income. And that's just one dynamic from a compounding effect that exists in recruitment. But there's also another thing that's true. Those people that you place into those positions, they will climb up the company ranks and eventually become managers, or they might even set up their own companies. And I can give you my own example. There are engineers in our niche who we placed 5, even 6 years ago, and now they became directors. They come back to us and you get this random phone call where they say, hey Mohammed, I remember you helped me get this job. I'm now a director and I'm actually hiring. So recruitment compounds with time. It might not be the business that's going to make you the richest in the first 6 months, but it certainly will be within the next 2, 3, 4, and even 5 years. And that's exactly what we found in our business, that every single year we always seem to do better. So just ask yourself the question, like, do you want to make a lot of money within 6 months, or do you want to make money for sure over the next 10 years? And beyond that point, it even more interesting because recruitment businesses are one of the simplest ones to scale. Your startup costs are minimal. It costs less than £1,000, dollars, or euros per month in terms of running costs for a business. And if you're going to make £24K placement fees, then you make one placement and you're in the green. You're now profitable for a year or even two years if you don't spend anything else. You make two placements, now it's pretty nice. And five placements a year at £24K and you probably replace your full-time income. High performers, they make one, two, even three every single month at that rate. And once you're billing consistently, And you have confidence in your own ability. You have your niche contacts. Then the next thing that you do is you go and hire. Now, I don't recommend that you hire a recruiter, but ultimately you hire to amplify your activities. What are the things that help you win more clients and get more candidates? And then all of a sudden, now you're making 3 or 4 placements a month. Profit margins have just jumped up again. And that gives you the experience and the confidence to even train somebody else as a recruiter to go and take over what you're doing at the moment for making money in recruitment. And now a very interesting thing happens. You've just hired somebody and you've built what is a machine or a system that makes you money somehow. And that is literally how simple it is to scale a recruitment company. When we're talking about generating leads for a recruitment business, this used to take a long time, but with AI and automation, you can just cut back 60, 70% of that time cost. Because instead of sitting there sending messages endlessly on LinkedIn or trolling through job boards, AI can just handle a good chunk of it because you as a recruiter the thing that you're good at is having conversations with clients and candidates. And that's where your priority and your time should be spent. And this brings me on to the thing that most people actually miss, which is the difference between a recruiter doing 5K per month and the one doing 30, 40, even 50K a month is not how hard they work, is how they actually think about the business. One of them will think of the business like a complete hustle and grind, and the other will look at the business as a machine and multiple systems all grouped together. And this is all on the basis that you actually know what you're targeting and what you're working towards. So I want to give you the example of Qasim. Qasim was that recruiter, not just somebody making 5K a month, but somebody who had the knowledge, the experience, and the know-how of how to grow a recruitment business. He actually went and set up his own recruitment business and grew to 6 employees before closing it down and starting all over again from scratch. And he tried everything, set up a podcast, did a lot of personal branding work on LinkedIn and events network, had a couple of mentors and coaches as well. And when you watch his video, he will say that all you have to do is follow a process to building the system. So that's exactly what I help with. Which led me on to what he did, which was $36K within 3 months. And that is the answer to the question of how do recruiters make so much money. And it's because the model is incredible. The fees are crazy high. Compounding is built into the actual business. And you can leverage the entire thing to amplify whatever you're doing. And the difference really is those who are able to capture it and those who are not. Because there are those recruiters who treat their business like as if they work for the business. And they operate like employees inside their own business. And there are those who think of it like a machine, and they build the entire machine so that it's repeatable and consistent. So now you know, you know how to make money, you know how recruitment works, you know what separates recruiters from those who are struggling and those who are successful. But knowing the model and actually building the model, they're two completely different things. So if you are still interested in recruitment and you're serious about learning more and understanding the step-by-step of how to do it, then I want to give you something for free. This video here, it is a full course on a step-by-step guide on how to build a recruitment business from scratch. So go ahead and start applying.