Net Profit Versus Splits

Net Profit Versus Splits

Jeff Glover recently published an insightful article in Inman on how to keep a split negotiation from derailing the recruiting process. 

Over the years, I have witnessed or have been involved in many conversations with agents who are constantly chasing or looking for a company that will give them a higher split.

….The question you should be asking the broker or leader of a company is not “What is my split?” But instead, it should be “What is my net?”

And, “net” doesn’t just mean money. It’s a balance between the money and the time, effort, and stress it takes to earn the money.  

Jeff looks at this issue from several angles, here are the top three things you should suggest an agent consider:

Your taxable income at year’s end. If your GCI increases through a higher split and your expenses are higher too, are you really gaining anything? Business is about making money.

Your support and help resources. If your split is high, your support will be low. With low support, you’ll be doing more of the mundane/low-value work yourself. Smart agents look for ways to “outsource” this type of work.

Your ability to learn and grow. What you earn today is based on your split. What you earn tomorrow is based on how much better you’re getting at becoming a profitable agent.

Great hiring managers don’t allow themselves to be boxed into a split discussion.  

They change the basis of the discussion by helping their prospects to see the bigger picture. 

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