What is Split-Fee Recruitment?

 

Recruiting successful talent for companies is a complete win-win situation for everyone in the process. All members of the recruitment cycle need a piece of the pie to win, and split fee recruitment does exactly that. Split fee recruitment is a revenue sharing model that is used primarily by staffing agencies. These agencies will subcontract work to independent recruiters and pay a commission (split-fee) for bringing in qualified candidate to make a successful placement. Depending on the staffing agency (also known as prime vendors), the split fee commission can vary as low as 70:30 to as high as 50:50 split.

 

Essentially, it is the prime vendors’ responsibility to find qualified candidate based on the requirements provided by their clients. These prime vendor get paid by their client 30-120 days after a successful placement. In return, the prime vendor will then pay the independent recruiter (subcontractor).

 

Here are the steps of how split fee recruitment works between a staffing agency and its client (employer):

1.      Employer agrees to pay Agency a 30% commission of annual salary on placement

2.      Agency agrees to pay 70:30 split fee to independent recruiter (subcontractor)

3.      Employer hires a candidate submitted by independent recruiter through Agency

4.      Agency gets paid 30% after 30-120 days

5.      Independent recruiter gets his/her cut with the 70:30 split

 

Here is the example with numbers:

Annual Salary is $100,000/year

Total Finder’s Fee @ 30% = $30,000

Split Fee Payment to Independent Recruiter = $9,000

Profit for Prime Vendor Staffing Agency = $21,000

 

Applying Crowdsourcing to Split Fee Recruitment

 

At Jobhuk, a crowdsourced recruitment marketplace, employers outsource their recruitment efforts to a large pool of independent recruiters. Our platform enables recruiters to work on a Split Fee model with 20:80 payout; being it fully automated with the highest payouts in the industry.

 

Here are the steps of how crowdsourced split fee recruitment works with Jobhuk:

1.      Employer digitally agrees on a 5%-30% commission of annual salary as Finders Fee

2.      Jobhuk digitally agrees to pay 20:80 split fee with independent recruiter

3.      Employer hires a candidate submitted by independent recruiter through Jobhuk

4.      Jobhuk gets paid the Finders Fee after 30 days

5.      Independent recruiter gets his/her commission with the 20:80 split

 

 

Here is how the numbers work with Jobhuk:

Annual Salary is $100,000/year

Total Finder’s Fee @ 30%** = $30,000

Split Fee Payment to Independent Recruiter = $24,000

Jobhuk’s cut = $6,000

**Used for example purposes. Client chooses the Finders Fee between 5% to 30%.