Commission That Calculates Itself: Fixing the Vendor Payout Problem

For any agency working with external sourcing vendors, commission is where operational messiness meets real money — and it's often the single most contentious line item in the business relationship.

Why manual commission tracking breaks down

Vendor terms are rarely identical. One vendor might be paid a percentage of CTC, another a flat fee per placement, another per candidate joined — each with its own guarantee window and payment terms. Tracked manually, across multiple vendors and multiple clients, this becomes a spreadsheet of exceptions, recalculated by hand at month-end from scattered notes on who sourced whom and when they joined.

The predictable result: disputes. A vendor believes they're owed one figure; the agency's records say another. Resolving that eats time, and repeated disputes erode a relationship that's meant to be a reliable sourcing channel.

Automating the calculation, not just the record-keeping

PyHire lets an agency configure exactly how each vendor is paid — percentage of CTC, fixed fee per placement, or per candidate joined — along with the guarantee window and payment terms, set once per vendor. From that point, the moment a sourced candidate joins, the commission accrues automatically, calculated the same way every time.

This connects directly to source tracking: every candidate carries their source — direct, referral, job board, or a named vendor — through the entire pipeline, so there's never ambiguity about which vendor a placement is attributed to.

Placements are also tracked against fee terms and guarantee periods, so invoicing happens when a candidate clears the replacement window — not before, and not from memory.

Beyond removing the month-end scramble

The bigger win is what automated, source-linked commission tracking makes visible: which vendors actually convert candidates into joins, not just resumes into a database. That's the number that separates a vendor worth investing more in from one worth reconsidering — and it's only visible once commission and source tracking live in the same system.

Getting vendor payouts right, consistently and automatically, isn't just an efficiency gain. It's what keeps sourcing partners as long-term, trusted channels instead of recurring points of friction.