Are you paying your internal staff the “right” amount? There is no easy answer to this multifaceted question. While every firm has its own approach, it can be valuable to consider how some of your peers are compensating their staff to see how you compare. Given that personnel costs were by far the top SG&A expense among firms in our recent industry benchmarking survey, staffing companies would be well-advised to keep a close eye on their compensation structure.

We asked more than 6,000 internal employees at 146 US staffing firms the question, “What was your approximate total compensation in 2014 (salary + bonus + other incentive compensation)?” We also asked them to identify their level of experience, job title, company size and the skill segment from which their company derived the most revenue. Some interesting patterns emerged. The full set of data was published in Staffing Industry Analysts’ 2015 US Internal Employee Compensation Estimator, but here are several trends we identified.

Recruiting vs. sales. At $55,000, median annual compensation for recruiters lagged behind the $75,000 level of sales account executives (see table on next page). To compare apples to apples, we tested whether this difference remained even when comparing recruiters and sales account executives with the same level of industry experience. Among those with one to two years of experience, recruiters earned a median $45,000 compared to $55,000 for sales account executives. Among those with more than 10 years of experience in the industry, recruiters still came in lower at $80,000 compared to $95,000 for their sales colleagues. Assess whether there is a similar pattern at your firm, and if not, it can be instructive to analyze why your company may differ.

Leadership. Branch managers earned a slightly higher median income than sales account executives ($80,000 vs. $75,000). A number of job titles crossed the $100,000 threshold in median compensation. Area/region/ division heads came in at $110,000. The VP level and above commanded incomes above the $100,000 mark as well, with some variation by the functional area which the position oversees. Heads of sales earned a median $175,000 compared to $125,000 for heads of finance/CFOs. Not surprisingly, those at the most senior position in our survey (CEOs/presidents/COOs/general managers) earned the highest median income at $250,000. Consider whether the gap in compensation between your senior staff and more junior positions is of a similar magnitude and whether the size of the disparity is consistent with your strategy and compensation philosophy.

The value of industry experience. Median compensation for both recruiters and sales account executives grew significantly with additional years of industry experience (see accompanying charts). For recruiters, up to the “more than 10 years” level, every two to four years of additional experience was associated with at least an additional $10,000 in median compensation. A similar pattern emerged for sales account executives and nearly every other job title. Are you bumping up your employees’ compensation appropriately with each year of additional experience they gain?

On a median basis, sales was thus a more lucrative profession regardless of experience level.

Larger does not mean more money. Do bigger staffing companies provide higher compensation than smaller ones? At least among recruiters and sales account executives, we did not observe this phenomenon. Among staffing firms with 20-50 internal employees, median compensation was $60,000 for recruiters and $80,000 for sales account executives. For those with more than 200 employees, these figures came in at $50,000 and $70,000, respectively (the decrease may be partially attributable to the survey’s margin of error). Larger staffing firms thus generally did not offer greater median compensation to their recruiters and sales staff.

In contrast, company size was a significant factor affecting compensation for the most senior positions. Those at the CEO/president/COO/general manager level earned a median $150,000 among firms with 19 or fewer internal employees, compared to $400,000 for firms with more than 200 internal employees. This correlation between company size and median compensation was weaker but still present for sales VPs and marketing VPs, and there was some evidence of a similar pattern for CFOs/finance VPs. If your firm is experiencing large growth in headcount, your top executives may become more expensive to retain.

The skill segment difference. Differences in median compensation also emerged between staffing firms specializing in different skill segments. Recruiters at firms that derive the most revenue from IT temporary staffing earned a median $65,000, and healthcare- focused firms paid recruiters a median $60,000. At the other end of the spectrum, recruiters in office/clerical staffing earned a median $50,000, while those in industrial staffing earned a median $45,000.

For sales account executives, the highest median compensation was reported in IT staffing at $95,000. Healthcare staffing followed at $75,000 while the office/clerical and industrial segments came in at $65,000 and $45,000, respectively.

For VP levels and above, the main difference in median compensation was found between industrial/logistics temporary staffing ($110,000) and the other skill segments, each with $125,000 or more in median compensation. If your firm is considering entry into new segments, it may be valuable to explore different compensation schemes according to the unique staffing skills and profitability associated with each one.

A parting thought. There are indeed many dimensions to the internal employee compensation decision. Take these insights as an opportunity to critically analyze your firm’s approach. In a “people business” like staffing, paying your staff appropriately is integral to your company’s success.

compensation