About a month ago, I received a call from a member who has been with NPAworldwide for a couple of years and in the industry for about ten years. The member explained to me that she had two great sales roles, competitively priced, yet she was getting very little NPAworldwide candidate-side (CS) submissions. After further discussion, I learned that although this position was with a long-time client, the member had no sales placement experience. The member took on the search with the hope of closing it with NPA CS help. Great strategy!! This is why we are in NPAworldwide.
Since the function of the position fell outside of the member’s core placement competency, I asked her if she would consider a non-traditional split as a means of attracting more candidate-side activity? Specifically, creating additional financial incentive for the NPA CS member. Surprisingly, this member had no idea that such a practice exists at NPAworldwide. The members agreed and changed the split to 60% CS—40% Job Side (JS). The result: one NPAworldwide split placement and one more on the way.
Of course, this writer and NPAworldwide recognize that members are independent, entrepreneurial-minded owner operators. The following are opinions or suggestions, use what can help you…toss the rest.
JS=JOB SIDE Partner, CS=CANDIDATE SIDE Partner
*Guidelines and Practice Examples by James Lyons*
REMINDER: 5% brokerage is due to NPAworldwide on EVERY split placement, regardless of how members share the balance of the fee. Sometimes it is easier to agree that the 5% comes from the side with the larger share; if there is not agreement in writing on a different plan, the expectation is 5% from each member's portion.
| Type of Split | Member Involvement | % Split Before NPAworldwide Brokerage | VARIATIONS, that can be added | NOTES |
| Standard Split | Standard split | 50/50 | non-exclusive | |
| Finder's Fee Search | JS partner out of market geographically and/or functionally. JS partner makes referral to CS partner. All process and submission (P&S) done by CS Partner | 80 to CS 20 to JS | 75 to CS 25 to JS | JS % may go up/down based on CS P&S, exclusive also given to CS. |
| Split 1, with CS incentive | JS partner remains active in submission process, but needs more CS help | 60 to CS 40 to JS | non-exclusive | |
| Split 2, with CS incentive plus | JS Partner takes a back seat in sourcing , empowers to CS Partner to lead in sourcing | 60 to CS 40 to JS | Option to also pay CS Partner’s portion of the NPA Brokerage Fee as additional incentive | NPAworldwide exclusive granted |
| Coverage search | JS partner finds ultimate hire, but CS partner covers the search with several top candidates | 60 to JS 40 to CS | 50/50 or 75 JS 25 CS & Pay CS Partner's portion of the brokerage fee as additional incentive | In instances of top CS Partner P&S coverage, the deal would not have closed without CS partner intellectual capital contribution |
| Engaged or Retained search | Any of the above options can apply | If NPA exclusive given, % of engaged or retained fee collected should be shared with select NPA CS partner on a cash in basis |
A reminder that 3-way splits are strongly discouraged. Non-members are not covered by NPAworldwide rules or indemnification protection. In cases of 3 NPAworldwide partners in the deal----Good Luck! It needs to be extremely clear, before work begins, that it is a non-traditional split or a 3-way.
NOTE: It is important to point out that all split fee agreements that fall outside of NPA standard operating percentages must be entered into the Marketplace and be agreed to in advance in writing by all partners.
Also, all candidate cash refund or replacement terms must be communicated.
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CONGRATS: Latest first placement is from: Josh Weiner, The W22 LLC–Firm 1st Placement (joined January 2022), well done Josh!!!
MARKETPLACE UPDATE: If you have yet to get on the new Marketplace, please do so. If you have, please encourage other members you know or come into contact with to get on. As an information-centric split fee network it is critical that we all embrace the Marketplace as the central tool that brings us closer together.