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As a Talent Acquisition Specialist in Japan one of the questions I get asked over and over again is about incentive schemes.

We all know recruitment consultants work hard everyday to improve people’s lives, and whilst there is a huge amount of satisfaction gained from finding someone their ideal role  the bonuses that can be earned definitely make it more rewarding. Interestingly whilst the majority of recruitment firms in Japan do offer incentive schemes it seems that the general understanding of how they work is pretty poor. So I thought I would try and shed some light on how they generally work.

You tend to find that agencies offer either a discretionary or a transparent incentive scheme. Recruitment consultants usually have a base salary and will be given incentives on top of this, depending on how much revenue they generate for the company.

A discretionary incentive scheme tends to be offered by the larger multinational corporations. Under a discretionary model, consultants work towards achieving an individual and team revenue target and whether they meet these targets, a bonus may or may not be paid dependent on how the overall team and in some cases the business has performed. 

Each person’s bonus will be calculated depending on multiple factors such as, whether the whole team achieved the quarterly target, whether the consultants contributed equally, did they receive positive client and candidate feedback and based on their managers perception of their value and contribution to the team. In the ideal world, provided they are demonstrating the right values, the person who generates the most revenue would be rewarded the most, however in practice this is not always the case. As the name suggests it comes down to the managers discretion which means you may not know what you will receive for your efforts until it pretty much lands in your bank account. 

In contrast some companies, often the medium size or boutique firms, offer a clear and transparent incentive scheme, essentially a more meritocratic system, which rests on an individuals performance. There may still be team KPI’s and revenue targets to meet but what goes into your pocket at the end of each month or quarter comes down to what you deliver. 

Because we call it a transparent incentive scheme, you know from the outset how much you will receive for the revenue you bring in. So it is much easier to keep track and forecast your potential incentive earnings. It can also be much more motivating.

At Morgan McKinley, we offer the best of both worlds with a transparent incentive scheme and an environment that truly values teamwork, collaboration and going the extra mile for our customers and each other. Our people share a set of common goals and they work together to achieve them.

If you are considering a move into recruitment and would like to have a general discussion about the industry and various incentive schemes, or if you are an experienced recruiter looking for a collaborative environment where you can still run your own business and your financial rewards, then please do get in touch.