Split Placements

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?

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?

Image:  FreeDigitalPhotos.net

As I pack up my desk and bags to head to Dallas, TX for a couple days to attend The Fordyce Forum, I find myself also preparing for what is sure to be a great event and even greater networking opportunity for me. No doubt, it will be the people I meet that will make the event worthwhile – not to mention the knowledge and training I will pick up along the way. This morning I prepared few ideas and goals that I think will be crucial to my success at The Fordyce Forum. Having said that, I thought it would be rude of me not to share my prep-strategy with our readers. Granted, as recruiters yours might be a little different, but I think the same basic fundamentals are there.

• Create an elevator speech:  rehearse a 30 to 60 second speech that identifies who you are, what you do, and why you are there. As an example, mine is below. Depending on the days events and who i’m talking to, this will obviously change a bit. It’s a starting point nonetheless.

  “Hi, my name is Annie Weller and I’m with NPA, The Worldwide Recruiting Network. Our network’s primary goal is to help our recruiters make more money through split fee recruiting and increase opportunities for their clients and candidates. We currently have about 400 member firms on 6 continents with the average member’s ROI at more than 800%. Our members share between 7 and 10 million dollars annually and their membership in NPA represents the difference between an average year and a good year. I’m here for the next couple days to talk to recruiters who are interested in increasing revenue through split placements. Are you interested today or in the coming days to talk further?”

• Set goals: If you don’t set any goals, how do you know if you are successful? Try to make them as specific as possible and break them out into categories.

• Identify a strategy: Review the schedule or agenda and decide which sessions would be most beneficial for you to attend.

These are obviously very basic ideas; however, I do feel a lot more prepared than before I nailed down my elevator speech, goals and strategy. I am a very “dive-in-head-first-kind-of-girl” so this type of preparation is not something I do very often. I have to admit, though, I feel much more confident

What do you do to prepare for this type of an event? Are you attending The Fordyce Forum? If so, I’d love to connect with you!

As the Director of Membership for NPAworldwide, I occasionally am asked by independent recruiters how our network is different and better than BountyJobs. In my opinion, neither one is necessarily better than the other as they are so very different. As an independent recruiter, deciding which to join will depend on how you like to work.

The following is a brief summary of the key differences between NPAworldwide and BountyJobs:

1.    Organization Structure
NPAworldwide is a member-owned and -run network of independently-owned recruiting firms that work together to make split placements. The network began in 1956 and has grown into a network of more than 400 firms located throughout the world.

Owners of NPAworldwide firms set the strategic direction of the network. The network is led by a Board of Directors of owners of member firms and has a selective membership process. At the end of the year, profits are re-invested in the network to continue and improve services to our members.

Membership gives independent recruiters and small firms a way to compete in a global marketplace without sacrificing the unique qualities that distinguish them from larger competitors. Members rely on our split placement network to build relationships that result in more effective and efficient service to clients and candidates in their own market. Those relationships translate into enhanced revenue-generating opportunities and increased financial stability. In the process, members also add value to their businesses through improved speed, reach, and capacity.

BountyJobs is a privately-owned company so I do not know how profits are spent or distributed. In 2011, BountyJobs was impressively ranked No. 389 on Inc. magazine’s annual Inc. 500. The press release announcing this ranking states that “BountyJobs is the preferred contingent search solution for more than one-third of the Fortune 500 . . .”   The organization appears to be a good solution for large employers managing a high volume of open positions resulting in the need for them to manage relationships with many recruiters.

2.    Work Style
Success in NPAworldwide is a result of the relationships built between recruiters. The quickest way to build trust with potential trading partners is to meet face-to-face at one of our conferences. Of course, if that is not possible, recruiters develop relationships through telephone, Skype, and/or email conversations.

In BountyJobs, independent recruiters only work with employers and have limited opportunities to build a relationship with an employer until much later in the hiring process.

3.    Control
In NPAworldwide, recruiters post jobs and candidates in our private, web-based sharing tool called SplitZone.  Recruiters may work on any job, anywhere in the world. We also have a private Job Board where only NPAworldwide recruiters can post their jobs. Members can post their jobs for free on our Job Board and only pay if they place a Job Board candidate in a job. With NPAworldwide, an individual recruiter is in control of how they work with their trading partners as long as they abide by the Bylaws and operating procedures.

BountyJobs is a one-way street. Employers post jobs through BountyJobs. Then after viewing posted jobs, recruiters may contact employers and request that they be given permission to send candidates to the employers. A recruiter cannot speak with an employer unless the employer authorizes the recruiter to send candidates. After the permission is granted, the recruiter is able to view the full contact information of the employer. Wiith BountyJobs, the employer is definitely in control.

Additionally, NPAworldwide recruiters control the type of guarantee they offer employers. With BountyJobs, recruiters have no control. All recruiters are required to provide a 60-day money back guarantee; no exceptions.

In conclusion, which option is better for independent recruiters to join – NPAworldwide or BountyJobs?  It  depends! NPAworldwide is a relationship-based network facilitating split placements among its members. If you prefer to not build relationships with your trading partners, then you should consider BountyJobs.  Or, if you are undecided, you may want to consider joining both and experiencing them each firsthand.

If you do consider joining BountyJobs as an independent recruiter, I suggest you take some time to understand how candidate ownership is addressed. Specifically, who owns the candidate six months after a recruiter submits the candidate to an employer.

As an independent recruiter, which option do you prefer?