Disruptive and divisive split commission - the debate rages on
Split commission is disruptive and divisive! It has no place at Harrington Starr. We’re recruiting the best talent and can offer a remuneration package that is in the top 5% of anywhere in the industry.
That is how Toby Babb, Founder & CEO, succinctly described our position on LinkedIn recently following the publication of his blog post “Saying 'No' to split commission and 'Yes' to sharing success”.
And it certainly seemed to encourage discussion including a split in some people’s opinions.
For example, Don Morgan, a CTO and advisor, commented: “50% sounds better than 0% ... in business terms what am I missing?”
Toby answered: “100% sounds better than 50%. This approach gives the very best for consultant, colleague, candidate, and client. We are looking to incentivise the best behaviours. This does just that.”
A key element of our success at Harrington Starr is we do not offer split commission. We find that our teams work better together for the benefit of each other and the clients.
Within the LinkedIn discussion, Tom Waddell, Recruitment Manager at Optical Express, questioned: “Are you saying only one gets paid the full commission and the other gets nothing?”
Toby responded: “Everyone works together, Tom, and shares jobs. Sometimes they will fill them, sometimes it will be a team-mate. It massively increases the options to place their candidates. Everybody wins. No politics. Just good teamwork.”
Everybody is incentivised to deliver
Oliver Cracknell, Business Analyst, also had a view. He commented: “So if Consultant 1 places 10 candidates and Consultant 2 places 0 candidates, they both get the same reward? If I were Consultant 1, I think I'd feel quite hard done by / unrewarded.”
Toby said: “Exactly my point, Oliver. The person who places the candidate gets 100%. Everybody is incentivised to deliver without ‘he said, she said’ over a split. I have never seen it work without issues any other way.”
In actual fact, our consultants are well rewarded. We have looked to ensure that Harrington Starr provides a remuneration package that is in the top 5% of anywhere in the industry. Operating with no threshold, our consultants have the opportunity to earn up to 40% commission on all that they bill.
However, Emma White, Senior Specialist Office Support & Commercial Recruiter, prefers a different model. She had this to say: “50/50's work well in my team - 50% to the person who picks up the role / holds the client contact and 50% to the person who fills it.
“If the person who picks up the role, fills it, then they get 100%. My team find this fair and I think it encourages team-work, more of my clients’ roles get filled, thus making a happier client.
“I can’t stand the mentality of this is my job to fill so I am going to cut my nose off to spite my face. The only person who ends up losing most is the poor client.”
Toby responded: “I agree - 100% against client ownership. Delivery to the client is the focus of all this.”
Working together is the key part
Boyan A., technology recruiter, added to the discussion with: “If you OWN the job, the onus is on you to fill it so you should get the full coms. No splits! Makes perfect sense, Toby!”
This provoked Nico Rosandic, Director - Digital Technology at Aquent, to say: “In theory, you are 100% correct. BUT what if you have, for example, a managed accounts team that can't fill a certain role as they are generalists and ask for assistance from one of their company verticals? Should the vertical specialist get 100% considering it isn't their relationship?”
The response of Boyan A. was: “In that case, I would seriously question the way roles are assigned / distributed within that agency in the first place. But, to answer your question, yes, the specialist should get 100%.”
Toby’s comments also provoked Tom Waddell to question: “To make a hire is divisive? Presumably one of them had the client relationship and the other the candidate part or perhaps they both were able to source different candidates?
“Unless you just decide to give part of the successful consultant’s commission away just for the hell of it, I cannot see how the practice is divisive.”
Toby answered: “Collaborate absolutely. Everything we do is designed to get people working together. As soon as companies start splitting commission though, we see problems and one party feeling hard done by.
“My point is that the very practice of working together is the key part. What goes around comes around if you get the right team in place.”
Mark Znowski, Active Investor in Staffing Companies in the UK and US, offered a voice of reason on the subject. He pitched in with: “Not sure that works for every business. We went from a zero split system to a 50-50 model at Staffgroup and EBIT went up dramatically. If it works for you great but would advise against a one-size-fits-all view.”
And Toby agreed saying: “Hard to argue with the man who gave me my final interview back in 1999, Mark Znowski! Points taken on board and agree it’s got to work for your business. I can see maturity of markets and customer base will play a part.”
So, plenty of healthy discussion and, no doubt, more to follow. As Toby has said, we do not offer split commission and, rather, look to incentivise the best behaviours ...
“Everybody wins. No politics. Just good teamwork.”