Today’s post is courtesy of guest blogger Elsa Duty. Elsa owns executive search firm Recruiting Services International (founded in 1970)  that specializes in technical search globally (R&D/engineering, manufacturing, science). Elsa has been an active member of NPAworldwide for more than 10 years and is currently serving on the Board of Directors.

A lot of small business owners I know often struggle with the decision, “Should I grow my business (hire more employees) or stay small?” Many owners I know never had ideas of grandeur to grow their businesses to be the next Robert Half or Korn Ferry. They simply wanted the lifestyle that recruiting affords; the ability to be at the helm of their own success, the work-life balance, and of course, big commission checks. The struggle often comes from a too-heavy workload in a strong economy (and the inability to say no to a job order that lands on your desk, if you’re like me!)

Finding good recruiters/employees is becoming harder to do. The Millennial workforce is producing a slew of “renters;” employees who come and go three times as fast as they would have 20 years ago. According to EREMedia.com, over 30% of new hires are quitting their jobs after six months! This is especially detrimental to small businesses that are not prepared for this attrition. Losing a new recruiter can tally up quickly if you consider these potential costs:

• Hiring/Onboarding – draw/salary of 3-6 mo, averaging $9,000-12,000+, plus healthcare, office/computer expenses
• Training Costs – 6 months-1 year+, quantifying management time into dollars at roughly $10,000-$15,000+ “lost production hours” of a full-desk recruiting manager
• Employer Taxes – In the US, FICA match, SS/Medicare: 7.65% of every dollar earned (a $60,000 employee costs an employer ~$4,590/year)
• Customer Relationships / Business Reputation – This is the biggest one; hardest to quantify but most critical. New clients developed may not have a bond strong enough to survive account manager attrition. This could mean $20,000-80,000+ in “lost” clients/placements.

Should the economy take another dive, these new hires will bail faster than you can say “cold-call.” You could be $30,000 invested into a new recruiter who is gone in less than 6 months (with minimal production dollars). Hiring “renters” is detrimental to our business. We know recruiting success comes with longevity, dedication, and deep passion for the business. We are “owners” in every sense of the word. We hold ourselves accountable and will do everything it takes to succeed. So when we need extra bandwidth, how do we get help without getting sucked into this cyclical model?

I was thinking of this as I looked around a large ballroom of smiling, welcoming faces at the annual NPAworldwide Global Conference in Washington D.C. a few weeks ago. Who has better ownership of their work, than OWNERS themselves? We eat, sleep, and breathe recruiting. We are warriors who have survived the battles of job-short, candidate-short, or money-short markets. My fellow NPAworldwide partners were all there to help, support, and partner together for the better good of our businesses succeeding. Utilizing a great split-placement partner can be an excellent solution to the urge to hire.

I recognize there is significant value in hiring good recruiters that produce. But that model is not for everyone. Not every owner wants the financial gamble, especially given the mentality of the workforce these days. Instead, if we are able to build sincere, tight relationships with other owners, entrusting ourselves to them, we can build powerful recruiting teams WITHOUT ever saying, “You’re hired.” Our recruiting partners are ready to go Day 1 of being given a new job order: no training, no financial investment, no overhead. If we change our mentality from “my firm” and “your firm” to “we’re a team,” we can support any influx of jobs in good season and bridge any recession when things are slow. That is what a split-placement network is all about.

NPAworldwide is celebrating our 60th anniversary of helping members make split placements this year. We think splits are a terrific option for recruiters, allowing more effective client service and broader geographical, industrial, or occupational coverage. There are a few myths about split placements, though, and I’d like to dispel those for you today.

Split placements are easier than regular placements. There are more than a few recruiters who think that split placements are easy. And while they certainly *can* be, that’s definitely not true in all instances. On top of all the regular things that make placements difficult, you’re also dealing with another recruiter and the communication and trust issues that can crop up. Recruiters who are successful at split placements tend to over-communicate, have very clear expectations, and a clearly-defined process. You can certainly do some things to make split placements work more smoothly, but that’s not necessarily the same thing as easy.

Clients don’t like split placements. I’m not sure where this myth ever originated, but I hear it a few times every year. I don’t actually have any empirical evidence stating whether clients like or dislike split placements, but I think most honestly don’t (or wouldn’t) care. In fact, I’m not even sure it’s necessary to discuss split placements with your clients. After all, do you tell them how much you pay for your LinkedIn package? Or specifically where you advertise? A sales pitch that includes a message about working with carefully-selected recruitment partners might make sense. As long as you’re providing the best talent for your client, it shouldn’t matter to them whether you’re sharing the fee with another recruiter.

You can do “half the work” since you are getting half the fee. Boy, this one can be troublesome. On the surface, this seems to make some mathematical sense – you’re either working the client “half” of the equation or the candidate “half,” right? After all, you’re dividing the work and sharing the fee. But this can be a sloppy mindset to adopt. Even though you may only be responsible for providing candidates, you still have to do ALL of the work that requires. On the client side, you still have to follow ALL of your process. If each side actually did “half a job,” you’d probably never make a placement. Much better to think of split placements as a partnership where each side is willing to put in 100% of the effort.

Have you encountered any other myths about split placements? Share below, or comment on the myths above!