Split Placements

Does it seem that the “War for Talent” is more often a war between recruitment agencies? Perhaps agency clients feel it advantageous to pit recruitment agency vs. recruitment agency to get better service and lower prices? In a recruitment network, I see the opposite as true…top talent, quickly, effectively and at a fair cost can be delivered by recruiter collaboration. It is time to have recruitment agencies suspend the competitive battle and collaborate for success. Read the rest of this entry »

More and more, the recruitment industry experts say that you need to specialize on an industry in order to survive in the current recruiting marketplace. I agree that it helps to have a specialty rather than being exclusively a generalist. But for those that are moving from a generalist recruitment business to a specialty niche it might be best to target a hot recruiting niche and keep yourself open to generalist jobs that have made you what you are.

In 2013, our network of more than 400 recruitment firms found “chemical process” and “process engineering” jobs to be one of the hot recruiting niches. Nearly 25% of all the splits done by NPA member firms were done in the “process” specialty niche. The manufacturing specialty niche was a close second in terms of placement results for 2013. So if you are moving from a generalist recruitment business and beginning to specialize, pick one of the best niches for recruitment rather than a specialty niche that might underperform in the year ahead. Generalist recruiters have to have strong skills in order to survive. If you use those skills to focus on a hot recruiting niche, you are likely to excel once you get some industry/niche experience. As a generalist, you can make a decision to focus on particular specialty niches on a regular basis, depending on what might be the hot specialty niches for recruiters in the months and years ahead.

I’m interested to learn of recruiters that have moved from a generalist business and added a specialty niche in the last 12 months. What do you see as hot specialty niches for recruiters in the year ahead?

Joining a split placement network can be a smart way to grow your recruitment business without increasing overhead. If you’re considering joining one, here are six critical questions to ask:

Who owns the network? A split placement network can be privately-owned or publicly-owned, or in NPA’s case, a member-owned cooperative. There is no right/wrong, better/worse ownership model, but you should understand it before you join.

What is the average return on investment for members? Ideally, you want to join a split placement network that offers a high value for your investment. The most common way to measure ROI is to consider the average split fee revenue earned by each member, compared to the costs of membership. You can also measure VALUE, whether in terms of cost (or time) savings through member discount programs, or access to a network of peers who share business acumen.

What does it cost to belong? Some common models include dues-only, brokerage-only, or a combination of dues and brokerage. Informal networks, such as LinkedIn groups, are often free. Some networks also sell software or other business tools. Be sure to find out if you’ll be required to use any particular tool and if so, if there is an additional cost for that tool.

How do I work on positions / share candidates? A split placement network can have almost any arrangement for how its members ‘work the network.’ Some offer exclusivity on a particular role or candidate. Others follow a ‘first in, first out’ rule. Some allow recruiters to ‘bid’ for work and may control the number of roles you can work at any one time, or control the length of time during which a candidate referral will be honored. Recruiters may be required to use the network’s software tool, or they may be able to work directly with other recruiters. Pick a system that feels comfortable for you.

How are disputes handled? Even in the best of circumstances, there are bound to be disagreements or disputes from time to time. You’ll want to spend time exploring how these are handled. Does the split placement network provide formal dispute resolution? Are there time-tested rules and policies? What happens to network members who continually break the rules?

Is there any protection in the event of non-payment by a partner? If you’ve ever been burned on a split placement, this question is probably on the top of your list. What does the split placement network you’re considering do in the event one partner fails to pay another? This is an especially important question if you’re the partner with the candidate, since you’ll have to trust your partner to pay you on time. Will the network help you collect the monies you are owed? Does the network offer indemnification?

If you’re looking for even more research assistance, click the button below to download our free split placement network checklist:

Agency recruiters (at least, most of the recruiters I know) are a notoriously competitive bunch. They like to be first, they like to win, and they like to tell stories about it. They do not, as a general rule, appreciate losing placements to a competitor agency. So you might be surprised to hear that some former recruiting rivals have figured out it can be more lucrative to work together than separately.

In our network of independent recruitment agencies, we do not offer ‘exclusivity’ based on territory or occupational niche (one of the things that makes a network different from a franchise). Recruiters who join NPA are often looking for trading partners who work in similar markets. Sometimes agency recruiters will find out that their arch rival is an NPA member, and they may hesitate to join NPA because of that.

One of my favorite NPA stories involves two such recruiting rivals. I’ll call them Bob and Steve. Steve was a longtime, successful NPA member. Bob worked for a firm that was considering NPA membership. Bob and Steve worked the same niche, with a lot of the same clients. Over the years, Bob lost a fair number of deals to Steve, so he wasn’t too thrilled about “joining sides” with his rival. But you know what? Bob learned that even though they had a lot of the same clients, they didn’t have ALL the same clients. More importantly, they weren’t always working on the same jobs from the same clients. Their candidate databases weren’t identical, either. And that meant that Bob actually got to work on MORE placements than he did when he and Steve were competing with each other. Bob and Steve have a great trading relationship in NPA, with each of them ultimately making more money by working together (and sharing fees) than they did when they didn’t pool their resources. Not only that, they’ve become great friends as well.

The point of this story is that split placements can help agency recruiters serve their clients more efficiently, even when it may seem both recruiters are ‘competing’ for the same business. Working cooperatively allows agency recruiters to have more deals in the pipeline and can speed up the hiring process. As the old cliche goes, “When you can’t beat ’em … join ’em!”

What’s stopping you from working with your competitors?

It’s the start of a new year and if you’re like most people, you’ve at least THOUGHT about making a resolution or two. If you’re looking for some ideas on how to improve your recruiting performance, here are 5 resolutions for independent recruiters:

1. Use the phone more. Resolve to spend more time on the phone TALKING to your clients and candidates this year. You’ll be rewarded with deeper, richer connections than you can possibly achieve via email. As the electronic landscape continues to change, real human interaction becomes more and more valuable. With the increase in email, texting, and automated delivery of messages, independent recruiters who rely primarily on the phone may find out they ‘stand out’ from their competitors.
2. Grow your network. Independent recruiters, especially sole proprietors, often find themselves working in a vacuum. It can be lonely, and it can also be difficult when you don’t have a peer group where you can share questions, concerns, and best practices. Cultivate a peer network that you can lean on for advice, benchmarking, or other best practices. Joining a formal network is one way to do that, but there are plenty of other options!
3. Invest in professional development. Everyone, including independent recruiters, needs to sharpen their skills. NPA members can attend our global conference for peer networking and industry training. There are other conferences, professional associations, and a variety of online learning resources. Whether you’re learning about social media, new recruitment technology, or getting ‘back to the basics,’ make sure you devote some time to professional development this year.
4. Mobilize your website. Even if you don’t expect to attract candidates via your website, understand that mobile browsing is expected to surpass desktop browsing THIS YEAR. Visitors who come to your site via a mobile device will run away quickly if they have a poor experience.
5. Consider adding split placements to your business mix. Split placements can help independent recruiters level out revenue fluctuations, offer economical business expansion, and serve clients faster and more effectively. Investing in split placement relationships now will serve you well when business conditions change.

What resolutions have you made this year?

I have been reading the blogs and content on LinkedIn regarding recruiting scripts for cold-calling candidates. Sometime we can complicate the most simple things. You can and should create your own recruiting scripts, based on what is most comfortable for you. Here are some basics to consider:

• Open the call by saying who you are and what you do…your SPECIALTY RECRUITING NICHE. You need to have a specialty that aligns with the candidate’s background. If you do not, the call may not produce value for the cold-called candidate. And why would a candidate invest time in you if they get nothing in return?
• Explain to the candidate how you can provide value to them as an expert in the specialty area. Here are a few examples:
  • Act as a BENCHMARKING tool for them on career progression, salary, etc.
  • COACH them on career moves that might be suitable.
  • Act as a source of NEWS on what is happening with people and companies in the industry.
  • Offer VISIBLITY TO CAREER OPPORTUNITIES in their area of interest
  • Ask if they are interested and if the timing is good to discuss any of the areas you have positioned.
  • Determine a best way to stay in contact for future OPPORTUNIITIES or UPDATES. Look for a way to develop an ongoing relationship.

Anyone can create sample recruiting scripts for you, but it is better if you create your own. You need to think it through as the cold-called candidate. What would make you invest 5 minutes with someone you have never talked with? The value needs to be clear and obvious. To minimize pressure, be sure to offer options. Most candidates do not want to talk to you when they are sitting in their work stations. Don’t forget to confirm a best way to stay in touch for the future. Cold-calling is the toughest way to start a relationship.

Any tips from you as to what is working when cold-calling candidates?

Image courtesy of Ambro at FreeDigitalPhotos.net

We often describe NPA as a “relationship-based” versus a “transactional” network. It leads to some great conversations with recruiters who are exploring membership in a split placement network. The differences between a relationship recruiting style and a transactional recruiting style aren’t always apparent. Today I’d like to discuss some of the differences as I see them.

Relationship recruiting, to me, means:

Recruiters who take a long-term view. They realize that today’s candidate is tomorrow’s hiring manager. They value repeat business from loyal clients. They understand that cooperation (and sometimes compromise) now can pay huge dividends down the road. They work cooperatively to ensure that all parties achieve their objectives.

Recruiters who spend a lot of their time on the phone. Relationships still need to be cultivated (in my view) through telephone and in-person conversations. Email is a great tool and automated services can save a lot of time, but they really aren’t designed for you to get to know another person.

Recruiters who receive lots of referrals from their contacts, and those contacts’ networks. Relationship recruiting requires a significant investment of time and effort into truly cultivating personal connections.

Generally, NPA recruiters value deep relationships with their trading partners as well as with clients and candidates. Our most successful members treat their trading partners the same way they treat their clients. Each side is an important part of the process, with mutual goals. Business relationships often evolve into true friendships. They have run each others’ businesses and attended funerals for other NPA members. As is true in so many business contexts, it’s easier (and more fun!) to do business with people you know and like.

Transactional recruiting, on the other hand, tends to focus on the ‘here and now,’ with more emphasis on speed. Transactional recruiters may devote more of their time and effort to internet searches, email, or high-volume cold-calling. They may spend less time talking to clients, candidates, or trading partners. There is nothing inherently wrong with this model; in fact, for certain types of recruiting needs it may be preferable.

What other differences do you see between relationship recruiting and transactional recruiting? Do you prefer one style over the other?

Joining a split placement network can be a big boost to your recruitment business if you have an open mind and a good attitude. Below are five mental roadblocks that can hamper your success and lead you to question your decision.

Not being willing to consider new markets. Many recruiters have a defined niche whether it is geographical, industrial, or occupational. Joining a split placement network gives you the opportunity to expand your business if you keep an open mind. Perhaps you will have an opportunity to fill different types of roles for your existing clients (instead of having to turn those down). You may be able to serve your clients as they expand into new countries.

Not being willing to consider new ways to work. Your split placement network may offer proprietary software or access to a third-party ATS, which might offer the ability to streamline your recruiting process or improve efficiency. You may get to know other recruiting firm owners who run their businesses differently than you. While it can be difficult (and scary!) to make changes, it’s important to keep an open mind. In our network, for example, everyone does things a little differently. There are lots of ways to be successful; be willing to try something new!

Not being willing to trust your trading partners. For recruiters with limited (or unpleasant) experience making split placements, it can be daunting to trust your new trading partners. Hopefully you checked out your new split placement network to see what policies are in place, how frequently disputes occur, and how they are handled. If you are satisfied with these answers, you should feel comfortable trusting your trading partners. You know what else helps? Calling people on the phone and attending face-to-face meetings – both of these are so much more effective at building personal connections than sterile email communications.

Not being willing to share more information than “normal.” This goes hand-in-hand with trust. The recruiters I know who are most successful in a split placement network are those who share as much information as they can – the candidate’s complete contact details, the name of the client, the location of the job, etc. The ultimate goal is to get the opening filled quickly with the best person; withholding information doesn’t help achieve that goal. This particular item can be a big hurdle to overcome, but it pays big dividends.

Not being willing to learn from others with more experience/success. It’s generally not a good idea to come into a new experience thinking you already know how it works. Even if you’ve had previous success, listen to your peers. If they’ve been part of a split placement network for a long time, you might pick up a trick or two.

There are a lot of things to think about when you’re considering membership in a split placement network. Once you’ve made the commitment to join, make sure to keep your mind open to new ideas, new concepts, and new ways of doing business. Don’t block your own success!