I just read Jerry's post on SPLIT placements and I thought I comment through a blog post. The business model of split placements seems to be challenged by many members of the recruiting community. Some recruiters love split placements while others shy away from it and avoid it like the plague. For me, a lot of my business is through split placements and I love the concept. Don't get me wrong - I encourage recruiters to do split placements. I believe it provides a good complement to my permanent search business. However, many members of larger recruiting organizations discourages split placements and act to shy away from it.
One of the main challenges of split placements is the following: Why would independent recruiters sub out their 'best' candidates to another recruiter. If one wants to build a company (or his/her brand awareness in a certain niche marketplace), the recruiter that is giving the candidate (I'll call him/her an exporter) has no recognition to the end client. All of the work, brand awareness and trust from the existing client goes towards the recruiter that controls the job order (I'll call him/her an importer). Basically, the end client (company XYZ) does not know anything about the exporting independent recruiter. In the end, the importer is really building his/her business based upon another recruiter's hard work. In exchange, the importer will pay out 50% of the recruiting fee back to the exporter.
This seems like a band-aid solution in order to build a buisness. The exporter loses any identification with the end client in order to receive 50% of the payout. If Company XYZ has another job order, there is no guarantee that the importer will sub out this new job order to the exporting recruiter. The exporting recruiter then loses credibility with the end client and no brand awareness is gained by the exporting recruiting firm to the end client. Almost all credibility that client XYZ gives is put towards the importing recruiting firm and no credit is given to the exporting recruiting firm except for a 50% payout.
The other major challenge of split placements is the following: If an independent recruiter secures a job order, the client expects that the recruiting firm that the client has engaged will spend 100% of their time and effort in order to search the marketplace and find the best candidate to fill this position. At times, subbing this job order out to another recruiting firm seems almost like a cop-out. It feels that the importer did not put as much time and effort into the search as the client expects and expects a good recruiting fee out of it.
Now, I strongly believe in split placements and my position is that I encourage split placements amongst recruiters. I believe it builds teamwork between recruiters and I think it is fantastic when an independent recruiter finds a great split recruitment partner. However, I also believe that one must be careful. If the bulk of your business is built upon split placements, one must ask themselves, "are you really building a strong, solid recruiting firm and building brand awareness with your name/company in a certain niche marketplace OR are you really working for someone else"......
My position - split placements are great and fantastic but should only complement (and not replace) your existing book of business.