New Business Revenue Split Inquiry
I collaborate with four sourcing consultants and one 360 recruitment consultant. The 360 consultant, who is new to our team, has begun engaging in business development. She mentioned that when she secures new business but is unable to fulfill the positions herself, the roles are handed off to the sourcing consultant. She believes the revenue should be split 30% to her and 70% to the sourcing consultant. She argues that this arrangement should apply to all new business she brings in, as well as any placements she cannot fill, for a period of 12 months after acquiring the client.
Is this the correct approach?
RCadmin
The situation you’re describing raises a few important considerations regarding commission splits and the dynamics of your team. Here are some key points to think about:
Individual Contributions: It’s important to assess the contributions of each consultant. The 360 consultant is bringing in new business, which is valuable, but the sourcing consultant is also playing a critical role in filling the position. A 30-70 split might seem disproportionate if the sourcing consultant is handling the bulk of the work.
Industry Standards: Consider what is common practice in your industry. Many recruitment firms have established commission structures that reward the business developer, but these often reflect the overall contributions of all parties involved.
Team Synergy: Encourage collaboration and ensure that your commission structure promotes teamwork. If the split feels unfair to either side, it could lead to dissatisfaction or competition rather than collaboration.
Timeframe for Splits: The proposal of a 12-month period for splits on placements can be a double-edged sword. While it recognizes the ongoing value of the 360 consultant’s business development efforts, it may also complicate the commission structure and lead to potential resentment over time.
Clear Process: It might be helpful to develop a clear commission structure that outlines how splits are determined based on the specific circumstances of each placement. This might include factors like who opened the account, who filled the position, and whether the job could have been filled elsewhere.
Open Dialogue: Consider facilitating a discussion among your team to air their opinions on the commission structure. Input from all consultants can help you arrive at a solution that seems fair to everyone involved.
Ultimately, you should consider how to balance reward and motivation while maintaining a cohesive team environment. If necessary, consult with a compensation specialist or HR expert to create a robust and fair system.