Split Placements

Recruiting Ideas: What to do with “Leftover” Candidates

by Veronica Blatt

image of word bonusThe chemical process industry (oil/gas/refinery, chemicals, pharmaceuticals, foods, pulp & paper) is hot, hot, hot in NPA. Split placements in this area are up 50% over the same period last year. And still, our chemical process recruiters are leaving business on the table because they can’t find enough qualified candidates. Whether you recruit in the chemical process industry or some other sector, you probably have “leftover” candidates – the ones your client did NOT hire. What recruiting ideas do you employ after the job is filled?

The easy answer is to leave them in your database until a future opportunity arises. Another option is to pitch one of these great candidates to a prospective client as a way to solicit new business. In today’s market, great candidates have a very short shelf-life. Both of these options decrease the likelihood that you’ll be able to quickly turn these assets into revenue for your recruiting business.

Another recruiting idea to consider: use those leftover candidates on a split placement basis with other recruiters. Contact other recruiters you know who work in the same specialty to see if THEY have a current need for your hot process engineer. If you’re not part of a formal recruiting network, make sure you have a signed split fee agreement in place with your recruiting partner (click here for a free template). If you don’t already have some split placement partners, you can certainly look for a group on LinkedIn; lately, I have been seeing lots of posts from independent recruiters looking for split opportunities. Or, you can seek out a formal (or quasi-formal) split placement network. There are relationship-based networks like NPA as well as transactional networks; pick one that matches your business style.

Reports we are reading and seeing indicate that hiring demand is strong in many sectors, although actual hiring may be slower than expected due in part to the extreme shortage of top-level talent. As an independent recruiter, you likely have plenty of great recruiting ideas to ensure satisfied clients and robust business. Split placements should be considered a strategic part of your business mix.

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Work “Coopetively” to Make More Split Placements

by Veronica Blatt

hands-blurred-tug-of-warToday’s guest blogger is Rick Corey with OpticsProfessionals, LLC in Rochester, New York, USA. OpticsProfessionals specializes fields of optics, photonics and imaging technology. OpticsProfessionals, LLC assists employers in staffing key talent, while helping individuals with career transition and growth opportunities. Rick is the immediate past chair of the NPA Board of Directors.

As a recruiter, do you ever work cooperatively with recruiters from other firms to make split placements?

I have done this a number of times, reaching out to someone who may be viewed as competition, but who could also be a trusted partner. It can be a recruiter I ask for assistance with if I’m having a problem coming up with appropriate candidates, or a recruiter I know that has some great connections into a company and I’ve got the perfect candidate.

In any case, it’s a recruiter with a good, ethical reputation; someone I feel I can trust. We make an agreement as to how we will work together on the split placement (usually a 50/50 split).

Years ago, I kept hearing of a recruiter working in the same field I do. I would call a candidate with a job order and find out the “other recruiter” had already called him. And it turns out he was hearing the same about me. He called me one day and left a “stinging” voicemail. I called him back and invited him to lunch. We met, and our respect for each other greatly increased.

From that day forward we worked on a number of split placements together, and to this day are the best of friends (he retired from the business a couple of years ago).

A client of mine once coined the term “coopetition”… working with a competitor for the betterment of both companies. That’s what I like to think when I’m closing deals with other recruiters: coopetition.


NPA 2012 Review: Split Fee Placements Prove Profitable Once Again

by Veronica Blatt

NPA is a global network of independent recruiting firms working together to make split fee placements. The network enables members to provide their clients and candidates with better service and increased opportunities. All of these network advantages have proven to be true in 2012 as NPA members made over 800 splits.

The beginning of January brings new business ideas and resolutions for the year ahead. But we can’t forget to close out the year that’s passed. This is very important to see what changes need to be made and so that business can be evaluated accordingly for what lies ahead. With that, here are some of NPA’s 2012 split fee placement statistics.

  • Placements of positions with US$80,000 and above salaries were 56% of total split fee placements
  • Placements of positions with US$100,000 and above salaries were 33% of total split fee placements

Top 5 Trading Groups based on the number of split fee placements, listed highest to lowest:

  • Manufacturing/Mining/Construction
  • Strategic Management/Supply Chain
  • Chemical Process
  • Sales/Marketing/Business Development
  • Information Technology

In 2012 there was over 7.5 million dollars of shared revenue among the more than 400 member firms. NPA also saw increased productivity throughout North America and Australia with continued growth throughout the rest of the world.

The NPA Job Board has also proven to be a key tool for NPA members as its first full year it brought in just under $250,000 in revenue.

Overall, 2012 was a good year for members in NPA as end of year totals have been steadily growing over the past couple years. This leaves me feeling optimistic that the employment market may be becoming less volatile.

Are split placements part of your annual business plan?

by Veronica Blatt

With the start of a new year, many recruiters are developing their annual business plans. Will split placements be part of your business mix this year? Split placements can help level out revenue fluctuations, but it takes time to build the solid relationships that allow splits to flourish. With the continued angst in the US over Obamacare and a sluggish jobs recovery, as well as lingering economic issues around the world, global recruiters really should consider split placements as a way to stabilize, and even increase, revenues. Here are some examples to consider:

  • Your current niche is soft (or softening). Working split placements can help you diversify into niches that are more robust.
  • Your current geography is depressed. If your jobs are located in ‘undesirable’ geographies (high cost-of-living, poor housing, etc.), split placements can help boost your business beyond your current geographic limitations.
  • Your clients are nervous about expansion plans. If your current clients have put expansion plans on hold because they are unsure what the future will bring, reach out to recruiting partners whose clients ARE growing. Remember, someone is ALWAYS making money!
  • You have more jobs than you can fill, but don’t want to hire more staff. Split placements offer economical business expansion – you pay your partner when you need their services, without ongoing costs for equipment, larger office space, etc.
  • You have a good database of in-demand candidates, but not enough jobs. Every recruiter I know is screaming for candidates. If you’ve got ’em, there are people who will help you place them on a split-fee basis.
  • You have jobs that are outside your normal area of expertise. You’ve been placing HR candidates at your best client for 15 years, and now they want you to provide engineers? Reach out to an engineering recruiter who has (or can find) the talent your client needs, without having to invest tons of time/money into learning a new niche from the ground up.

If you are currently experiencing even ONE of these situations in your recruiting firm, split placements may be the solution. Will this be the year you commit to splits?


Split Placements Add Value to Recruitment Businesses

by Dave Nerz

hand making a flow chartIndependent recruiters are risk takers. Recruiters typically strike out and leave the comforts of the corporate life behind. Many of these entrepreneurial ventures grow and prosper. One of the things I am seeing more frequently is the desire to create an “exit strategy” from the recruiting franchise that produces value in return for the risks taken and the successes achieved. In some cases the founding entrepreneur has been better at creating and growing the business than they have been at making the business saleable. Those buying a business want to see what value has been added to the business. They are not buying the entrepreneur; they want to buy what is left after the founder is gone.

So what can be done to add value to a recruiting business?

Add Process: The buyer wants to know that the success of the business is not dependent on any one individual. There needs to be a process for recruiting, doing the books, hiring and retaining, marketing the recruiting franchise, and even keeping the place clean and stocked with pens and toilet paper. A rule of thumb: if it is not written down, it is not yet a process.

Add Quality People: What people stay behind when the entrepreneur leaves? They don’t all need to be employees but they should be part of the process and the relationships might be better if captured in writing. This one is a little trickier as some buyers may want to use their own bookkeepers and cleaning services, so don’t get locked into irreversible contracts.

Add Connections: Develop and document the relationships that separate your business from others in the same niche or market. Trading partners that work cooperatively with your business can be the difference between a good year and a great year. They can add the revenue that represents the total profit for any year. These connections add value, but need to be documented in order to produce value at the time of sale.

Add Sources of Revenue: The number one value added source of revenue for any recruiting business is contract placement. These contracts smooth the peaks and valleys associated with contingent recruiting. The ongoing revenue adds to the basic value of the business and increases the likelihood of a sale for a recruiting business.

A second way to smooth the ups and downs is the inclusion of split placements. Split placement revenue is not guaranteed, nor is there a guarantee of continuation on the departure of the founding entrepreneur. But if properly documented as part of the recruiting process, split placements can be demonstrated to add value and reduce the risk of long dry spells for incoming revenue. The ability to work others’ jobs when you have none—or to seek the help of others (without adding staff) when the business is overwhelmed—is a great value that needs to be documented and sold as part of the business.

Add a Formal Split Fee Network: Showing a potential buyer that you have formalized the process to the point of being an active member of a split fee network is a bonus for any potential buyer.

Make your years of risk-taking pay off. Plan ahead and add value that a future owner would potentially pay for.

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5 Ways Split Placements Can Benefit Your Recruiting Firm

by Veronica Blatt

NPA has been in the business of fostering split placement opportunities since 1956. Obviously we are big believers in splits, since that’s the very reason for our existence. If you haven’t considered integrating split placements into your business model, here are some reasons you should:

  1. Split placements can help level out cash flow fluctuations. Splits are good for business in all kinds of economic conditions because they provide incremental revenue that stabilizes seasonal or cyclical revenue fluctuations.
  2. Split placements can allow to you work on more projects simultaneously. A split fee recruiter can complete more projects. More completed placements means more satisfied clients and more profitability.
  3. Split placements help you serve your clients faster and more efficiently. The most successful recruiters I know are those whose sole desire is to get the best candidate in front of their client faster than anyone else. By building a reputation as the “most reliable provider” they are guaranteeing future business.
  4. Split placements can help you expand your scope of service in terms of both geography and occupational or industrial markets. Participating in split placements means you can help your clients with a wider variety of assignments, whether that means branching out geographically or different types of roles.
  5. Split placements offer an affordable alternative to hiring additional recruiters in your recruiting firm. Instead of hiring a new recruiter or investing resources in developing a new niche, you can reach out to trading partners who are already established experts. Best of all, there is no ongoing overhead – you simply pay for their services when you need them.

If you’re interested in adding split placements to your business model (or increasing the number of splits you currently make), there are two primary ways of doing so. One way is to relentlessly build your own network of like-minded recruiters that you can trust and who work the same way as you. You’ll need to spend time creating a split fee agreement, upfront, each time, to ensure your client and candidate relationships are protected. The other way is to join an established recruitment network. Split placement networks bring you a ready-made cadre of trading partners, infrastructure and ground rules governing how splits will be made, and dispute resolution if needed.

NPA offers a free tool to help you determine if joining a split fee network could benefit your recruiting firm. The NPA self-evaluation tool is anonymous. NPA does not capture any of the data you submit so you won’t get any phone calls or emails as a result of filling out the questionnaire.

A Split Fee Network Organizes the Playing Field

by Dave Nerz

I’ve been reading some interesting blogs lately on how recruiting compares to sports. Barb Bruno had an interesting one just a few days ago comparing recruiting to golf.

It got me thinking about where a split fee network might fit into the comparison of recruiting and sport. My conclusion is that networks function much like sporting leagues. They group like-minded recruiters together and organize the playing field for participants with various levels of tools and rules. Read the rest of this entry »

Membership in a Global Recruiting Network Is One Way to Reduce Cost

by Veronica Blatt

I recently saw a “pin” on Pinterest about everyday ways to save money. The list included things like hang your laundry to dry, use coupons, re-evaluate your car insurance, try DIY projects, make your coffee at home each morning and bike and walk more and drive less. The article got me thinking about ways recruiting firms can reduce their costs. I did an Internet search about ways to reduce or save on recruiting costs and came across a post by SilkRoad. I’ve included a few tips below that are both practical and relatively easy to implement.


  • Improve retention – You don’t have to spend money hiring new people if your existing good employees stick around. Study retention, track it, and continuously work to improve it.
  • Stay on top of new sourcing technology – Let’s face it, sourcing is your mainstay. A continual investment and investigation of the latest tools and techniques will pay off.
  • Use social recruiting – Twitter, Facebook and LinkedIn are all free ways of building a brand and seeking candidates.
  • Assess value, not cost – One of the biggest recruiting costs is hiring poor performers. Assess the quality of the hire and go the extra step of asking managers to put a dollar amount on the difference between top, average and poor performers.
  • Join a global recruiting network – This tip wasn’t included on SilkRoad’s list but I think it’s a good one. Instead of hiring additional employees with no guarantee of performance, consider joining a global recruiting network. Recruiting networks, like NPA, allow you to make money without the overhead of managing and monitoring your employees. Plus, you only pay those who perform. Can’t beat that model!

See the remaining 6 tips to reduce recruiting costs at SilkRoad’s website. In what ways does your recruiting firm cut back on cost?

Not All Split Placements Are Created Equally!

by Terri Piersma

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?


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8 Ways to be a Better Split Placement Partner

by Veronica Blatt

soccer netAt a recent NPA meeting, members shared tips and ideas for how to be more effective split placement partners. These ideas are valuable whether you make splits within a formal network or on your own.

If you work the job/client side:

  • Share the client’s name with your partner. That way, your partner won’t accidentally source candidates from the company that is hiring. While you’re at it, provide the names of competitors that COULD be a good source of candidates.
  • Share how many candidates are currently in the process. How many have been interviewed? Are there any internal candidates? What’s missing from the candidates that have already been presented? This will help your split placement partner recruit more precisely.
  • Tell your split placement partner about your relationship with the client. Are you friends with the hiring manager? Do you have a long track record of making placements there? They have a great history of speedy payment? You can guarantee that candidates you present will get interviews? Especially for recruiters who work on a contingency basis, these details will help them feel more confident that a successful split placement will occur.
  • ALWAYS provide feedback on the candidates you receive. Nothing alienates a split placement partner more quickly than sending candidates into a black hole.

If you work the candidate side:

  • PLEASE talk to your candidates before submitting to a split placement partner. And yes, extensive written communication can ‘count’ as having ‘talked’ to the candidate in some circumstances.
  • Add value to the information you provide. Do at least 50% of the work, even though it’s common for the recruiter with the client to drive the hiring process. Be ready to support your split placement partner when it’s time to close the candidate, extend the offer, etc.
  • Make sure the information about the candidate is current. At a minimum, you need to provide the candidate’s current phone number and email, the most recent employment situation, salary requirements, and relocation details. Your split placement partner isn’t interested in sharing 50% of the fee for out-of-date (or incorrect) candidate details.
  • Don’t pester your partner for feedback on the candidate. Your partner is trying to get feedback from the client. Sometimes clients are slow. Nagging your split placement partner won’t make the feedback appear more quickly. And NEVER interfere with your partner’s client relationship.

It takes a great deal of trust and commitment to be a successful split placement partner. Many recruiters are more comfortable making splits within the boundaries of a formal network. If you’re making splits on your own, be sure to execute a signed split placement agreement with your partner to avoid any disputes.

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