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12 December 2008

Measuring Talent Attraction (AKA Recruiting) Success in Real Estate

The concept that ‘attracting talent’ as opposed to simply ‘recruiting people’ is central in the hiring of sales agents, an it has been discussed in several blogs by Wendy Forsythe in recent months. These are articulate and well written pieces that you may want to review as you consider the ideas contained in this entry.

What key attributes attract top professionals in the real estate business? Sales agents will rarely verbalize them, but observation and experience in the industry bears out the importance of the following:

  • A Distinctive and Professional Image
  • Market Dominance
  • Effective Business Technologies
  • A Competitive and Evolving Compensation Plan
  • A Relevant Management Style
  • A Sound Organizational Structure
  • Strong Administrative Support
  • Career Advancement Opportunities
  • Effective Sales Agent Marketing Tools
  • High Standards for Productivity
  • A Strong Emphasis on Business Ethics

Our success in attracting great talent into our organizations is testament (or not) to the public perception of the company. But how can we accurately measure success in this critical area?


Talent Attraction Analysis

A Talent Attraction Analysis is developed in order to assess how your organization is faring in “attracting” and retaining strong agents. A Talent Attraction Analysis is a concentrated history of hiring and retention performance over the Last Twelve Months (LTM) and Prior Last Twelve Months (PLTM) periods. It also assesses the talent attraction performance of a company/office as a separate ‘profit center’ unto itself.

Possible views include a year-to-year analysis of talent attraction and retention upon Adjusted Gross Commission Income (AGCI), or the performance of ‘new’ agents as opposed to experienced agents hired over time. It is also critical to track the AGCI lost via agent terminations in order to calculate year over year Net AGCI gain or loss from the combined effects of talent attraction and retention.

The importance of measuring the effectiveness of your talent attraction efforts cannot be overstated. Often in our industry, companies struggle to grow due to failure in establishing clear metrics to track their progress. Asking the right questions about your Talent Attraction program will lead to a better analysis. The types of questions include, but are not limited to the following:

  1. How many new hires did the company attract during a given time period?
  2. How productive are the new hires during the early months of affiliation?
  3. Are we seeing success in attracting both new and experienced agents?
  4. Are we measuring new and experienced results as two discrete measurements?
  5. Are we tracking part time vs. full time agents hired? (…hopefully your agents are all full time!)
  6. Have we calculated the Gross Commission Income (GCI) added to the company as a direct result of the Talent Attraction program?
  7. Are we tracking revenue lost (and reasons for leaving) due to attrition of agents from the company?
  8. Have we calculated the Net GCI resulting from hiring and terminations combined in order to view Talent Attraction as its‘ own separate profit center?

The following is a sample Talent Attraction Analysis constructed to demonstrate the concepts mentioned above. Many other views are possible.

Talent Attraction Analysis

2 thoughts on “Measuring Talent Attraction (AKA Recruiting) Success in Real Estate

  1. Wendy, most real estate companies today and even before the US housing market crash simply can not afford new agents or recuits. The turnover is far to great and the Broker is not willing to commit the time and energy necessary to have sucessful real estate agent. So the industry solution is just to get some more bodies in and hope they bring Listings. More information on sucessful agent recuiting can be found at http://www.viewmylisting.com

  2. Your point is well taken and that is why I have included an analysis of ‘net revenues’ created through the hiring and termination process. If we measure the productivity of agents hired as well as the number of agents hired and keep revenues lost from terminations in view, the resulting measurment is a truer and better measure of success.

    Thank you for your comment,

    Bob

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