New Business Commission Structure
I collaborate with four sourcing consultants and one 360 recruitment consultant. The 360 consultant is newly onboarded and has begun engaging in business development activities. She has expressed that when she acquires new business but is unable to fill those positions herself, the responsibility then shifts to the sourcing consultant. She believes that in such cases, a commission split of 30% for her and 70% for the sourcing consultant is appropriate. Furthermore, she feels this arrangement should apply to any new business she brings in for a period of 12 months on all placements she cannot personally fulfill. Is this an appropriate approach?
RCadmin
The situation you’ve described raises important considerations for establishing a fair commission structure in your business. Here are some key points to consider:
Value of Business Development: The 360 recruitment consultant is bringing in new business, which is crucial for the growth of the company. It’s reasonable for her to expect some compensation for her role in generating leads, even if she can’t fill the positions herself.
Role of Sourcing Consultants: The sourcing consultants are playing a vital role in fulfilling the placements. They should also be fairly compensated for their work in sourcing candidates and closing placements.
Commission Split: A 30-70 split (30% to the 360 consultant and 70% to the sourcing consultant) may be reasonable, especially if the 360 consultant is the primary driver of bringing in that business. However, it’s also essential to ensure that this split does not demotivate the sourcing consultants.
Duration of Split: The proposal for this split to last for 12+ months after bringing in new business could be seen as beneficial, as it accounts for the ongoing efforts of the sourcing consultants while still rewarding the 360 consultant for her business development efforts. However, it might also be worth discussing a cap or time limit on the split to prevent potential resentment or imbalance within the team over time.
Team Collaboration: It’s vital to communicate clearly and ensure that all team members are on board with the proposed split. Encourage open dialogue to assess how everyone feels about the arrangement and whether it reflects the contributions of each individual.
Ultimately, the key is to strike a balance that recognizes the contributions of both the 360 recruitment consultant and the sourcing consultants while motivating everyone to work collaboratively towards the common goal of filling roles and growing the business. Consider holding a meeting to discuss this proposal with your team and seek their input.