How Does Your Firm Pay Out On Interoffice Splits?

I am currently one of the managers at a 25-person, primarily contingency-based search firm that does a lot of interoffice splits. We have been in business since 1991, and have a long-standing company policy of our recruiters being able to “own” candidates in our database, ad infinitum, as long as they were the first person to bring in that particular candidate’s resume. We have even gone as far to allow those that put in meaningful information on a candidate into the database without obtaining the resume, to retain a piece of the ownership once the resume eventually comes in.

Since information is much easier to come by on the internet these days, compared to the 1990’s, we are giving serious thought as to possibly restructuring how much of a percentage we offer to candidate “owners.” As a result, I am very interested to hear how other firms with multiple recruiters deal with this issue.

Does your firm allow recruiters to “own” candidates and pay them when they are placed by others? If so, is there a statute of limitations? In general, how do your interoffice splits get paid out?

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Permalink Reply by Dylan Howell on March 18, 2011 at 6:04pm

I'd also like to hear how this is handled, I'm currently in the process of putting together my firm's compensation plan.

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Permalink Reply by pam claughton on March 19, 2011 at 9:32am

I used to work at an agency that grew from 20-100 recruiters and this was something that was always discussed. Everyone worked off a shared database and everything had to be documented in it, every time you spoke or emailed a candidate. In order to keep ownership of a candidate you had to 'touch' them at least once every 90 days. Obviously you'd do that much more often when you first get them, but if you didn't place them right away you had to remember them and keep in touch, otherwise if someone else in the office was referred to them and you hadn't been in touch, you'd lose them.

We also had a rule that all candidates had to be called within 24-48 hours of a new search coming in. The job order person would make a rollup list and it was up to you to check and call your people. If you dropped the ball, and didn't, that person was up for grabs and you'd get 10% of the applicant side of the fee for putting him into the database. Reasoning there was that you deserved something because otherwise the job order person wouldn't know about your candidate when they did the database search.

It worked well and created a sense of urgency to call your people regularly. Oh, and you had to actually connect with the person during that 90 day period, couldn't just leave a message or send a bulk mail.

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Permalink Reply by Christopher Poreda on March 19, 2011 at 10:34am

Great post Kevin. There is no right answer, only what works for your office. The method we used seem to work well...it rewarded the recruiter who brought the candidate in (and kept in touch with them), at the same time encouraged and reward the recruiter who used the database most effectively.

Here was the plan. If you brought the candidate in, interviewed them (with viable notes) and kept in touch with them (entered their most current company in the database) you owned that candidate for life. If a job came into the office and the original candidate recruiter brought that candidate to the attention of that job order recruiter and a placement was made...50/50 split. If, however another recruiter identified that candidate for that job and the placement was made, the recruiter with the job got 50%, the recruiter who owned that candidate got 25% and the recruiter who identified the candidate in the database got 25%.

This method accomplished two critical goals: recruiters stay in contact with their candidates (if the info is outdated, you lost the candidate) and encourage everyone to scour the database to fill a job (usually the quickest and most efficient way).

Good Luck!

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Permalink Reply by Kevin Glassel on March 21, 2011 at 1:08pm

Thanks for your replies, Pam and Christopher. They are both interesting and enlightening, and should provide good food for thought as we look at potential modifications to our plan.