What recruiter commission plans should I disclose when selling my firm?

Gather the plans into one document. For each recruiter, say how pay is built, when it is earned and when it is paid, and what happens if the placement falls through. Include informal arrangements, such as a promise to raise a split once a target is hit, because a buyer who inherits the staff inherits the promise.

Explain how the plans affect the firm’s margin. A generous split may be fair, but it changes what is left for the owner. Show how pay lines up with the placements recorded in your books, so the buyer can follow the money without guessing.

Be clear about any pay owed on pending deals. Placements that have not yet been paid by clients may carry a commission that falls due after closing. Ask your accountant how to show that. Lastly, ask your lawyer which employment terms need to be shared and when. Staff will notice a sale, so decide who hears what, and in what order. Offer to walk the buyer through one example placement from search to payment, which makes the plan easier to follow than a table alone. If the plans changed lately, say when and why, so the buyer does not read a recent tweak as an attempt to hide something.

Key takeaways

• Put every written and informal pay arrangement into one document.
• Show how pay on pending placements will be handled after closing.
• Ask your lawyer when each term should be shared and with whom.