Recruiter Break-Even

Why this comes up

Before asking whether a recruiter is a strong performer, it's worth knowing the floor: the GP they need to produce just to cover their own fully loaded cost, allocated support, and any variable commission, before they're contributing anything to overhead or profit. This is the diagnostic number for a struggling recruiter, not a target for a strong one.

How we calculated this

Fixed Cost = Fixed Loaded Recruiter Cost + Allocated Support Cost
Required GP = Fixed Cost / (1 - Variable Commission %)

Worked example: $7,500/mo fixed loaded recruiter cost, $1,500/mo allocated support cost, 10% variable commission.

Fixed Cost = 7,500 + 1,500 = $9,000
Required GP = 9,000 / (1 - 0.10) = $10,000/mo

What this means

• Variable commission divides into the denominator, not subtracts from the numerator, because commission is paid as a percentage of the GP the recruiter generates, so it scales with the required GP itself.
• This is a break-even floor, not a productivity target; a recruiter hitting exactly this number is covering their cost with zero margin left for the agency.
• Convert this dollar figure into a placement count with Placements Needed to Cover Recruiter for a more actionable number to track.

Common mistakes

• Subtracting commission as a flat percentage of fixed cost instead of dividing it in, understating the true required GP.
• Forgetting allocated support cost (a share of shared recruiting infrastructure or leadership overhead) and only counting the recruiter's own salary.
• Treating break-even as a productivity goal rather than the floor it actually is.

Frequently asked questions

What counts as "allocated support cost"?

A recruiter's fair share of shared costs that support recruiting but aren't their direct salary: sourcing tools, a shared coordinator, management overhead attributable to the recruiting function.

Should I use this number to evaluate an individual recruiter?

Use it as a floor check, not a full evaluation. See Gross Profit per Recruiter for actual productivity, and compare it against this break-even figure.

What if variable commission is zero?

Then required GP equals fixed cost exactly, no adjustment needed since there's no commission scaling to account for.

Limitations

This is a break-even floor only; it doesn't reflect what a strong recruiter should actually be producing, which is typically well above this number.

Next decision

• Convert this into a placement count

Learn more

Staffing Recruiter Economics — what a recruiter needs to produce, when to hire the next one, and how ramp payback fits in.