Some professional recruiters and search consultants bristle at the notion of making split placements. They mistakenly believe that they have to “go out of their way” to make splits. This is simply not true. Split fee recruiting is a strategic way to generate more revenue on your desk and/or for your agency.
And we should know. Top Echelon started as a split fee recruiting network way back in 1988. At the time, we were known as Nationwide Interchange Service (NIS), but because that name was not the best name in the history of names, we changed it to Top Echelon 10 years later. During the past 30-plus years, we’ve helped thousands of recruiters earn hundreds of millions of dollars in split recruiting fees. So we know what of we speak.
And that’s why we can say with confidence that in the vast majority of cases, split placement opportunities present themselves. There are certain situations that lend themselves to making splits.
Once you’re able to recognize those situations (and recognize them quickly), you’re better able to generate revenue for your agency that you would not have done otherwise. However, before we get into the “tall grass,” so to speak, let’s examine this question: what is split fee recruiting?
What is split fee recruiting?
Simply put, split fee recruiting represents an agreed-upon arrangement between two recruiters in which one recruiter supplies the job order and one supplies the candidate in a potential placement situation. After the placement is made and the candidate is working for their new employer, the two recruiters split the placement fee. (And of course, the employer pays that fee.)
In this split placement situation, the recruiter supplying the candidate is called the “exporter.” That’s because the recruiter is basically “exporting” the candidate to the other recruiter for placement at the second recruiter’s client.
Conversely, the recruiter with the job order is called the “importer.” That’s because they’re “importing” the candidate from the other recruiter with the intention of placing that candidate with their client.
But let’s get down to the real nitty-gritty, shall we? How does a split fee recruiter make money?
How does a split fee recruiter make money?
You already know how a split placement works in a split fee recruiting network. One recruiter has the job order and another recruiter has the candidate, and they join forces like the “Wonder Twins” and activate a placement they would not have made otherwise.
As you might have guessed, the split recruiter with the job order is the one who has the relationship with the client. That recruiter fills said job order with a candidate secured from the other split recruiter. (Whether or not the client actually knows where the candidate came from is up to the job order recruiter. Sometimes they tell the client and sometimes they don’t.)
How money changes hands
From there, the client sends the job order recruiter a check for the placement fee. That recruiter, in turn, makes copies of the client’s check and writes two more checks. The first check is to the split fee recruiting network. This is a brokerage fee for the deal.
In Top Echelon’s case, the brokerage fee is 6% of the overall placement fee. This leaves 47% for each split fee recruiter. The job order recruiter sends the brokerage fee check and the candidate recruiter check through the mail, along with a copy of the check that their client sent to them for the placement fee.
So who is ultimately responsible for making sure that all parties are paid, including both split fee recruiters? The job order recruiter. And is there the possibility that the job order recruiter is just going to keep the whole fee and not pay anybody? Sure, but that doesn’t happen 99.9% of the time, and the reason is simple: the job order recruiter wants to keep making placements they would not have made otherwise. Placements fees, including split fees, are a healthy addiction, for the most part.
So that is how a split fee recruiter makes a split placement and makes money in a split fee recruiting network. The end.
Well, actually, NOT the end . . .
Split fee recruiting rationale
So we’ve set the stage. We’ve identified all of the players involved. But perhaps you’re still not convinced. Maybe you need a bit more convincing about the value of split placements and the value of membership in a split fee recruiting network.
Well, if that’s the case, then you’re in luck! Because below are five times when split fee recruiting makes sense for a search consultant:
#1—A client gives you a job order outside of your specialty.
This does happen. A client loves the job you’re doing for them so much and they have so much faith in you that they give you a job order that falls outside of your wheel house. After all, if you filled a bunch of other orders for them, why can’t you fill this one, too?
Obviously, you don’t want to turn down the order, but then on the other hand, how do you fill it? With the help of another recruiter, that’s how! Another recruiter working within that specialty will have the candidate that your client is seeking. You fill the order, your client is happy, and you’re happy. Everybody is happy.
#2—You have more job orders than you can possibly work.
Sounds great, doesn’t it? Until you realize that not only can you not fill them all, but you can’t even give them all attention. They just sit on your desk, collecting dust. You do not fill them when they’re collecting dust.
This is when utilizing the time and resources of another recruiter makes sense, even if they work the same specialty as you . . . especially if they work the same specialty as you. Send the job specs and ask them to source candidates. You present the candidates, your client likes them, your client hires them, and once again, everybody is happy. (See the trend here?)
#3—You can’t find the candidate your client wants to save your life.
You client wants to see another candidate . . . and another one . . . and another. “That last one was great and we really like them, but can we see another one?” Sound familiar? Sometimes, companies just won’t “pull the trigger” until they’ve found the “perfect candidate.” (Even though there is NO such thing as a perfect candidate.)
So if they want yet another candidate, send them a candidate from another recruiter. They could have somebody that you don’t have, and that somebody could turn out to be the somebody your client deems is perfect and wants to hire. Your client doesn’t even have to know that you got the candidate from another recruiter. All they need to know is that you provided the solution to their hiring problem. Cue the music and roll the credits.
#4—You have plenty of quality candidates, but not enough job orders.
This is the flip side of #2. Whenever there’s an imbalance on your recruiting desk, regardless of whether it’s on the candidate side or the job order side, making a split placement or two (or three) can help you to rectify that imbalance.
In this case, if you have quality candidates and a lack of job orders, not only can you market those candidates to existing clients as a MPC (Most Placeable Candidate), but you can also use them to fill the job orders of other recruiters and keep making placements. If your clients don’t want to create a position to hire your MPC, then perhaps another company represented by another recruiter will want to hire them. Either way, you get paid.
#5—You need a candidate from a specific geographic region.
Clients are constantly throwing you curveballs, aren’t they? Let’s say that instead of throwing you a job order outside of your specialty area, they want you to fill an order in a remote part of the country. Or in another country altogether.
Then let’s say that you don’t have any candidates in your database suitable for the position, or if they are suitable, they don’t want to move there. So you need a suitable candidate who wants to move to who knows where to fill your client’s job order. That candidate might end up being another recruiter’s candidate, and you’ll gladly split the fee because without that recruiter and without that candidate, you’d be placement-less and empty-handed.
The role of a split fee recruiting network
There are recruiters who make split placements on a regular basis. In fact, splits are a regular part of their business model each and every year. In other words, they make both split placements and non-split placements.
To them, it’s the “best of both worlds” because they make all the non-split placements they can make, plus all the split placements they can make that they would not have made otherwise. They view this as the true definition of maximizing the production on their recruiting desk.
And of course, many of these recruiters join a split fee recruiting network. As a member of such a network, they’re able to share job orders and candidates with other recruiters, who also see the value of making splits. And as mentioned at the top of this blog post, Top Echelon Network is a split fee recruiting network.
Since 1988, we’ve been helping professional recruiters and search consultants make split placements with our specialized tools and services. There are hundreds of recruiting agencies and thousands of recruiters working together in Top Echelon on a daily basis to pool and leverage their resource for more production.
Split fee recruiting with millions of candidates
One of Top Echelon’s most effective split fee recruiting tools is the Network Candidates Sourcing Tool. This sourcing tool allows Top Echelon Network members who use our recruiting software to share information more quickly and easily. However, if you’re a Network member and you don’t use our ATS, you can still use the Network Candidates sourcing tool.
While you can perform searches in Network Candidates to look for qualified candidates, your information will not be included in searches conducted by other Network recruiters. The reason, of course, is because your data is being housed in an applicant tracking software other than ours.
And here’s the good news: there are over 6 million recruited candidates in the Network Candidates Sourcing tool!
And yes . . . Top Echelon is a much better name than Nationwide Interchange Service.