As the Director of Membership of a split placement network, one of the first topics that come up with recruiters considering membership is if they have formerly, or are currently making 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 or Scout.
In 2020, I have found 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:
- 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 in various Facebook groups or on Linked-In. It is not unusual for recruiters in these informal networks to have never met face-to-face or know much about the others background.
- 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.
- Formal Network
- A recruiter pays to participate in a formal network. In NPAworldwide, 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. In NPAworldwide, we have over 10 practice groups that help specialized recruiters navigate the community and easily form relationships or customize their experience to their most prevalent industry. Some networks may include members located in only one country or state and others, like NPAworldwide, have members throughout the world.
- Formal networks should 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 include how to handle candidate referrals, client poaching, permission to advertise, etc . 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, NPAworldwide 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 NPAworldwide, a separate split fee agreement between trading partners is not necessary since the owners of the member firms signed the NPA Membership Agreement.
In contrast, split placements that come about from a client utilizing Bountyjobs or Scout are only labeled splits because the online platform itself is taking a percentage of the fee off the top. Many frustrations can exist in these types of splits due to the transactional nature of the placement, as well as the loss of candidate ownership and lack of direct communication and relationship building.
If you are considering adding to your bottom line, consider all of the above when making the best decision for your independent recruiting business.