OK, raise your hand if the last few years have been something less than wonderful for your recruiting business. Happy New Year!!! Keep that hand waving if you have the feeling that 2011 is going to be a breakout positive year. If you put your hand down, get it back up if you feel 2011 will be better than either 2009 or 2010.
So what does this have to do with split fees? Here’s the connection…I believe you will be busier than ever this year and filling open positions will be more difficult than in past boom times. So having split fee partners ready to help you work jobs and place quality candidates will make the difference between a good year and a great year.
Split fee arrangements will help you address client needs in areas outside your core area of expertise. Split fees will add to your bottom line and grow your market coverage area from both a geographic and industry perspective.
When splitting fees, it is important to get in writing what the terms of your short-term partnership are with your split fee partner. You will want to document the split fee percentage, when the split fee will be paid, and if there are any conditions that require a partial or full refund of the split fee. You may want to document the specific opening you have a split fee agreement in place for and cover what happens if your candidate gets used for a different job at a future date. In fact, it might be good to detail what is the agreement relative to secondary sourcing of your candidate or even with the client.
Here is a Sample Split Fee Agreement that is not a legal document, but gives you a fast framework for a document you can run by your legal counsel. Split fee agreements come in many shapes, sizes and levels of complexity. Build a split fee agreement for yourself now. That will save you fumbling with the details when you are deep into the deal. OK, your hand should still be in the air. Slam it down on the table, desk, or lap in front of you and say with me, “I’m going to do more splits in 2011 and grow my business!”