Real-Life Math -- Solution
The first step is to convert the annual salaries of the hired applicants
into monthly salaries and calculate what they would earn in 3 months. To do
that, you would divide their annual income by 12 to get a monthly income,
then multiply by 3.
First Hired Candidate -- $42,000 /
12 x 3 = $10,500
Second Hired Candidate -- $32,000
/ 12 x 3 = $8,000
(rounded to the closest dollar)
Third
Hired Candidate -- $48,000 / 12 x 3 = $12,000
Fourth
Hired Candidate -- $36,000 / 12 x 3 = $9,000
Fifth
Hired Candidate -- $48,000 / 12 x 3 = $12,000
Total: $10,500
+ $8,000 + $12,000 + $9,000 + $12,000 = $51,500
Your commission
is 25 percent of $51,500.
$51,500 x 0.25 = $12,875
Now
you calculate your monthly salary.
Total Monthly Salary: $24,000
/ 12 = $2,000
Things are looking good! Your potential
earnings are much greater working on commission. Even better, based on your
performance this month, you're well on your way to earning an annual income
in the 6-figure range. But before you start planning how to spend your future
earnings, you need to figure out the total amount that you would have had
to reimburse the employer whose candidate quit after 90 days.
Total
Amount to be Reimbursed: $34,000 / 12 x 3 (since you owe 3 months' salary)
= $8,500 (rounded to the nearest dollar)
Commission: $12,875
- $8,500 = $4,375
Potential Annual Income: $4,375
x 12 = $52,500
Suddenly the pitfalls of working on commission
are all too clear. While $52,500 is still a respectable income, one more slip
and you might actually have ended up owing the firm money that month. You
agree to work on commission, but vow to be extra vigilant in checking out
job applicants in the future.
Math skills do not play a large role
in the day-to-day tasks of a technical recruiter. Jeanne Hudson runs her own
technical recruiting firm. Math comes into play only when she's billing a
company for her services, or calculating whether she can get a candidate a
higher salary than he's earning in his current position.
"I always
find it hard to ask somebody what their salary is, but you've got to do it."