Would you like to make money and help other people at the same time? As a freelance recruiter, you can help others find great jobs and you’ll get paid by the hiring company for your work.
Let’s take a deeper look in this article/interview.
I’ve covered a lot of different ways to make money here at Vital Dollar, and I’m always excited when I come across new options that don’t get very much exposure.
Today, I have an interview with Mark from Financial Pilgrimage. A few years ago he worked as a freelance recruiter and made $25,000 from it in his spare time (over a period of two years). He’s agreed to share his experience and tips for anyone else who may be considering this side hustle.
For disclosure, Mark is no longer working as a freelance recruiter because of a change in his role at his day job. He stopped after taking a management role with his employer, to avoid a potential conflict of interest.
There is a lot to like about this side hustle, and we’ll look at the pros and cons after the interview.
For more side hustle ideas, please see:
How to Start a Freelance Recruiting Side Hustle
Now, here is the interview with Mark (I’ve added the bold and italics to his responses to emphasize certain points).
Can you tell us a little bit about yourself?
“Thanks for the opportunity to participate in this interview series. I hope that you and your readers enjoy my story about side-hustling as a freelance recruiter.
“At Financial Pilgrimage our mission is to help young families pay down debt and live financially free. We’ve been on a journey to pay down nearly $200,000 in debt since 2011. We became completely debt-free, including the mortgage, in August 2018.
“My wife and I live in the Midwest and have two young children, a 4-year-old boy and a 10-month-old girl. I am 37 and my wife is 34. We’ve been married for eight and a half years.
“I am in management in the financial services industry and my wife taught middle school for the past six years. While we both had full-time jobs during the majority of our debt pay down journey, we also had several side hustles along the way. During the early years, we made a little extra money reselling items on eBay found at garage sales and dollar stores. Other side-hustle endeavors have included real estate investing, online poker, and last but not least, freelance recruiting, which we’ll go into more detail below.”
→ Related reading: 25+ of the Easiest Things to Flip for Profit
How did you get started with the recruiting side hustle?
“Two of my good friends worked for a recruiting company years ago. The long story short is their office ended up closing and both decided to start their own small recruiting businesses after their non-compete clauses expired.
“One friend needed help sourcing candidates as job openings from his largest client were increasing significantly. Ironically, his largest client was Aldi, the national discount grocery chain. I started by helping with back office type work including searching for candidates on sites such as Indeed and LinkedIn, reviewing resumes, conducting background checks, and occasionally conducting phone and in-person initial interviews.”
What exactly is involved in being a freelance recruiter?
“Recruiting, in general, is a roller coaster of a job. Most recruiting companies don’t get paid unless a candidate is hired. While there are wild swings, the rewards are significant when placements are made. Recruiters often receive a commission of 15 to 25 percent of the new hire’s starting salary.
“What many people don’t realize is the recruiter’s customer is the company for which they are filling the open position, not the candidates. The candidates usually pay nothing for the services of a recruiter, so if you’re looking for a job it doesn’t hurt you to reach out to recruiters in your area. Just know that a recruiter gets paid to fill job openings for companies such as Aldi. Since companies pay recruiters a lot of money, the pressure is high to deliver the very best candidates. Having a strong understanding of the company’s needs is critical.
“The hardest part of recruiting is finding companies willing to pay for your services. Competition can be fierce and you can lose a client overnight if you’re not delivering up to their standards. Like many professional situations, having strong relationships and trust with the businesses you recruit for is essential.
“Once a company requests your help to fill a potential opening, the recruiting process involves finding candidates, screening, background checks, initial interviews, and then prepping them to meet with the client.
“Freelance recruiters can be involved with many different aspects of this process, so it really depends on the needs of the company you’re working for or if you’re doing it on your own. Once a candidate is introduced to the client there are often several more interviews, cognitive testing, and drug testing before a hiring decision is made.”
How much time did you spend on this side hustle, and about how much money did it generate?
“I spent 10 hours per week on average. Some weeks I’d work for 20 plus hours and others not at all. It was driven by demand and depended on when there were openings I could help fill.
“I recruited for about two years. During that period, I made about $25,000 total. For any position that I helped place, I’d receive about one-third of the total commission. My largest commission received was $4,500 for helping to place a district manager position. My fee was larger for this candidate as I found the candidate, met for an initial interview, and facilitated all background screening.
“For my situation, the skills I gained from recruiting benefited me far more than the $25,000. As someone who is analytical, calling and interviewing candidates stretched me far outside of my comfort zone.
“It also taught me a lot about hiring candidates, which has been a huge help as I transitioned into a management position at my corporate job. Hiring is one of the most important things a manager can do. Hiring the wrong people is a recipe for disaster no matter how strong an overall manager you are.
“I’m convinced that my salary at my day job is higher as a direct result of the skills I learned recruiting for two years, which is hard to put a price tag on.”
What kind of skills or experience are needed for someone to get started?
“There are a lot of soft skills involved in being a good recruiter. While organization and responsiveness are important, even more important is the relationships you establish with your clients. Having a strong understanding of your client’s needs is absolutely critical. This can be tough because sometimes a client doesn’t even know exactly what they are looking for in a candidate, so you have to be a bit of a mind reader.
“Being an effective communicator is the most important skill to work on. If you are not a strong communicator, clients will not be willing to work with you, and you’ll quickly lose credibility with candidates.
“This is also very much a sales job, so understanding basic sales tactics is important. If you work directly with clients you’ll need to sell them on why they should use your service. Even with recruiting, you often have to sell candidates on the benefits of the job since many of the best may be currently employed elsewhere.”
For someone who is just getting started, how would they know what to charge?
“Recruiters typically charge clients anywhere from 15 to 25 percent of a starting salary on average. Positions that are more difficult to fill will usually result in a higher fee.
“If you are freelancing for a recruiting company, the amount you make can widely vary. Some companies may be willing to pay you by the hour on a draw. Others will pay a commission when you make a placement. In my case, I didn’t get paid a commission unless the candidate was hired. We had a pay structure worked out where I would receive anything from a few hundred dollars for finding a resume for a lower level position, to several thousand for completing the initial interview myself.”
Do you think it would be necessary (or wise) to specialize in recruiting for a particular industry?
“This really depends on your situation. Larger recruiting companies may have clients all across the board. When starting out, most will narrowly focus on a specific niche and then branch out if they choose to do so. As mentioned earlier, developing a strong relationship with your client is most critical so you can understand their needs.
“Once my friends left the larger recruiting firms, they both only had one or two main clients yet made six figures in revenue annually. Since they worked from home and only paid their freelance recruiters when positions were filled, their overhead costs were kept low. If you find the right client they can make you a lot of money.
“Of course, like with anything, putting all your eggs in one basket comes with some risk especially since most companies can change recruiters whenever they want.”
Do you have any tips for finding clients?
“Finding clients is the hardest part of getting started as a recruiter. I’ll answer this question in two ways, both as someone who owns a recruiting company and then for someone who freelances for a recruiting company.
“First, if you are trying to start your own recruiting company finding clients is going to be really challenging. Most companies are going to want to work with someone who has experience hiring for positions in their niche.
“However, if you’ve been a hiring manager in a corporate job for years and want to start your own recruiting company, you’ve got a better chance. You can start by doing internet research to try to find out which companies use recruiters in your area.
“After identifying a few companies, preferably in a similar niche, you could start reaching out to potential candidates on LinkedIn. If you are able to find great candidates in a specific niche you could then approach potential clients letting them know that you may have a potential candidate for their position. Since most clients only pay when a position is filled, there isn’t much risk to them in getting started.
“As a disclaimer, the recruiting and human resources field is complex in general so you’ll want to seek out a legal specialist in this area to ensure that you aren’t violating any laws.
“If you are looking to freelance recruit for a small company, similar to what I did, you could start by reaching out to recruiters in your area on LinkedIn. Ask them to lunch or simply ask if they need help filling positions. Offer to start by searching for candidates online or reviewing resumes from a job posting. Most recruiters get more resumes than they can ever look at. Every situation is going to be different, but if you ask enough people you’ll find someone that can use some help.”
What are some of your favorite and least favorite things about this side hustle?
“My favorite things about this side hustle were the skills I developed related to communication, sales, and hiring. Many of the skills I learned helped me immensely in my day job. It was also a side hustle that I could, for the most part, do at night since I had a day job.
“Finally, with recruiting you really are changing someone’s life by helping them find a new job. Since Aldi typically paid better than the individual’s most recent employer, it really did feel like we were changing people’s lives for the better. We had one candidate literally break down in tears because of the 30 percent pay raise they were going to receive.
“My least favorite part was the ups and downs of recruiting. There were some individuals who we’d work with for months through the initial screening and multiple interviews with the company only to have them reject an offer at the last minute. It’s probably similar to being a real estate agent where you need to keep many individuals in the process to manage the fluctuations. Otherwise, you’re going to be relying on a handful of candidates to get paid for that month.
“I ended up stepping away from the side hustle primarily because I became a manager at my day job and recruiting for other companies would have been a conflict of interest. Instead of doing a side hustle that made me five figures a year, I now blog about money and don’t make a dime from it. 🙂
“Thanks for taking the time to read through my story. If you have questions about recruiting as a side hustle, feel free to leave a comment below or you can email me directly at [email protected]”
Pros and Cons of the Freelance Recruiting Side Hustle
Now, let’s take a look at the specific pros and cons that you should keep in mind if you’re considering this side hustle.
1. Good Income Potential
As you saw in this interview, freelance recruiting has the potential to bring in a significant amount of money. Of course, results will vary, but we’re not talking about a side hustle with a very limited upside. You could make a few thousand dollars for a single job placement.
2. Possibility to Grow to a Full-Time Income
Some side hustles are great for making a little extra money, but they don’t give you the potential to scale up. That is not the case with freelance recruiting.
If you’re simply looking for a way to make some extra money, that’s an option. But if you are looking for a side hustle that gives you the potential to grow it to a full-time income or to start a real business from it, this is an option too.
It’s possible to work as a freelancer full-time, or start your own recruiting agency.
3. Flexible Schedule
Like most good side hustles, working as a freelance recruiter gives you some flexibility with your schedule. We saw in the interview that he was able to do it in the evenings on top of a full-time job.
4. You Get to Help Others
Aside from the benefit of making money for yourself, as a recruiter you can get satisfaction knowing that you are helping other people to increase their income or find a job that they love. That’s pretty powerful.
5. Improve Your Own Skills
As was mentioned in the interview, as a recruiter you’ll develop and improve valuable skills like communication and sales. These skills can help you to make money today as a freelancer, but they can also be extremely valuable for you going forward.
Of course, like anything in life, there are some cons as well.
1. Not the Easiest Side Hustle to Start
Some side hustles can be done by anyone, anytime. This one requires some experience in recruiting or hiring, or the willingness to really hustle to get a shot with someone who is willing to work with you.
The nice thing is, some of the side hustles that are a little more challenging to start will also give you the potential to make more money. Most people choose to go the easy route when it comes to side hustles, so if you’re willing to do something that has a higher barrier to entrance, you’ll probably have potential to make more money.
2. You Don’t Get Paid Unless Your Candidate is Hired
This is a side hustle that could wind up taking a lot of your time without much financial reward, because you’ll only be paid when one of your candidates is hired by the company engaging your services.
3. Inconsistent Income
Since you’re only getting paid when someone is hired, you’ll make money in chunks. It may be several hundred, or even a few thousand, dollars at a time, but it will be inconsistent and somewhat unpredictable. Since it’s a side hustle, that may not be a big deal, but it’s something that you should consider when you’re evaluating the opportunity.
If you’ve decided that this may be a good side hustle for you, reach out to local recruiters to see about the possibility of freelancing for them. You can also see my article How to Start a Side Hustle for more guidance on how to choose the right opportunity for you, and steps to take when you’re ready to get started.