In September 2014, NPAworldwide merged with another recruitment network called NBN (The National Banking Network) specializing in Finance, Accounting and Banking positions on a national basis. I am now exposed to a completely new group of recruiters that do splits. While this group tends to focus efforts on splits in North America, they have a passion for splitting that is infectious. It is fun to learn how similar two formerly “competitive” networks can be. The reasons for belonging to a split network are the same, the expectations for results are the same, and the results delivered by the successful operators is the same too!
I was recently speaking with a long-time member of NBN’s split fee network about his return on investment. He calculates this as the fees generated divided by the cost to belong. He told me that he averages about a 15,000% to 25,000% ROI on dues annually. OK, I thought he must have his math wrong! That cannot be real? So I did the math. He was dead on. For the last 3 years he has averaged more than a 20,000% return on investment. I thanked him for his membership!
So why are there not more firms joining recruitment networks? I guess the answer is simple. Some firms have different business models that do not allow their recruiters to share fees. Some firms are so regionally focused that a national network of partners has little value to them, while others are just not willing to change what has been successful for them. These all make good sense.
If splits are part of your plan, if you are willing to do splits, and if you are looking for ways to grow revenue without adding more staff, splits are a great option.
Advantages of Splits:
Faster fill. The speed-to-fill on openings can be increased when multiple recruiters work together.
Better fill. Sometimes a better collection of candidates can be developed working cooperatively on a job. Multiple points of view and methods can locate best-fit candidates that a singular focused search may not.
Increased Coverage Area. Recruiters that are doing splits have partners in other parts of the state, country, and even the world.
Increased Niche Opportunities. Have you ever turned an open position and potential client over to a fellow recruiter because you had no desire/ability to work the niche the opening was in? If that is an existing client, you now introduced potential competition. If it was a client you had not yet done business with, you are doing business development for your associates and perhaps even a competitor. The most disappointing part is that you have lost control of the fill and created a loss of client “mindshare”.
Economical Business Growth. If you have more work than you can perform, would it not be great to have someone that helped you fulfill for your clients who was not in need of a draw or salary, did not require your management time, no office furniture to buy for them, no phone services or job board subscription to acquire? You can grow your “staff” without making a hire.
By many accounts, there are about 137,000 recruitment firms worldwide. Based on the population of split networks and the number of franchised recruitment groups, about 50% of these recruiters are open to splits. If you count internal splits, the numbers might be even higher. If you have been closed-minded to splits, is 2015 the year you dip your toe in the split pool and learn what is happening? A 20,000% return could be the result in a few years’ time. It might be worth some consideration.