Recently, I’ve noticed during conversations with some recruiters with whom I speak about membership in our split placement network that they say they have made split placements. Further questions reveal they didn’t make the split placements the “traditional” way. Instead, they provided a candidate to an employer via an online service like BountyJobs.
I propose that the “recruiter community” language for split placements has changed. You can no longer assume that when recruiters state they have made split placements that it occurred the “traditional” way. Specifically, what I mean by “traditional” way is when a recruiter with a job works directly with a recruiter with a candidate and the candidate is hired by the employer. This results in the two recruiters splitting the client fee.
“Traditional” split placements happen in one of the following ways:
1. Informal Network
- Recruiters form their own, usually small, network of trusted trading partners. Most savvy recruiters will have signed split fee agreements even if they make splits with recruiters they have known for a long time.
- In addition, larger informal split networks exist online including in LinkedIn. It is not unusual for recruiters in these informal networks to have never met face-to-face. Again, savvy recruiters will have a signed split fee agreement before working with another recruiter they met online.
- If you are a recruiter considering making split placements with other recruiters or are currently making split placements and do not have an agreement signed with the other recruiter, check out our sample split fee agreement which can be used as a starting point to create your split agreement.
2. Formal Network
- A recruiter pays to participate in a formal network. In NPA, The Worldwide Recruiting Network, members pay one-time enrollment fees, monthly dues, and brokerage payments when split placements occur.
- Networks can have a general focus or specialize in an industry or niche. Some networks may include members located in only one country or state and others, like NPA, have members throughout the world.
- Formal networks must have rules of engagement so that trust can build among its members. If the formal network is not built on trust, an environment develops where split placements will not flourish. The rules of engagement will typically including the treatment of candidate referrals. Also, a formal network should address what happens if something in the split placement process does not go well. Of course, clear and written communication between the recruiters can minimize these situations. As a cooperative of independently-owned recruiting firms, NPA recruiters are bound to act within the Bylaws approved by our members.
- Signing the network’s membership agreement or contract binds its members to abide by its rules of engagement and may eliminate the need for a split fee agreement to be signed between trading partners. In NPA, a separate split fee agreement between trading partners is not necessary since the owners of the member firms signed the NPA Membership Agreement.
Many differences exist between informal and formal split networks as well as split job boards. It is important for recruiters who make split placements to understand the differences including the different definitions of a split placement?
What is your definition of a split placement? Do you prefer “traditional” split placements or those made through split job boards?