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19 August 2009

Next Generation: Talent Attraction and Retention

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Attracting and retaining talent to a real estate office has never been more important or more challenging then it will be in the decade ahead. Not only has the housing market seen dramatic changes, but the expectations of current and future industry professionals have dramatically altered.

During the market boom of the early to mid 2000’s, the frenzy to recruit anyone with a license reached a fever pitch. Generally speaking, brokers were both eager and generous in growing their companies by offering higher and higher compensation packages to incent agents them to choose their particular brokerage. Companies began competing on price and not value for the steady stream of new agents. An increasing average house price and number of transactions masked the negative effect this tactic had on the bottom line.

During this same period, the focus on attracting experienced agents diminished. This area of talent attraction for most brokers and managers has always been more challenging. Several mantras became common place: “Experienced agents have baggage, I can train new agents to do business the way I want, and experienced agents are just other people’s problems.”

It’s not that there isn’t truth in these statements, but for many they just became excuses.

With the current rate of licensed REALTORS® as reported by NAR dropping (down 9.96% July 08 to July 09) and expected to continue to decline for years to come. Brokers looking to expand their agent base are faced with additional challenges. Newer agents will be fewer and farther between and the need to attract experienced agents will require a new kind of expertise; one that takes into account that depleted budget brokers have to “buy” agents based on compensation plans of the past.

The experienced agent will need to be a focal point of office growth through the next generation real estate brokerage. Today, the average REALTOR® has been licensed for about 10 years and is 54 years old. They have weathered a dramatic change in the market and are poised to excel in this profession as long as they choose. The criteria they use when choosing which company name they will carry on their website and business card is changing.

They’ve lived through downsizing, mergers and acquisitions, buy outs, office closings, rebranding and more. All of these decisions, for the most part, were beyond their immediate control and made without their input, but each impacting them on a very personal level. Moving forward they will evaluate their local brokerages with a different set of eyes.

Leadership, financial stability, support, training, environment, vision, relationship, technology, online strategies, lead generation, business systems and culture will rank just as high or higher as compensation plans for the reasons to join or stay with a particular brokerage.

Next generation brokerages must figure out how to communicate their value proposition and core messages in these areas to their current agents, potential new agents to the industry and existing agents with other companies. A nice brochure or presentation isn’t going to cut it.

Potential and existing agents have more tools than ever to continually monitor and evaluate a brokerages commitment to them and their success. They will rely on multiple experiences created by the company to act as their measuring stick.

These experiences will include the interaction with the broker or manager, the physical office, the culture of the company, the online presence of the brokerage, how training and coaching is conducted and more. Walking the walk will be way more important than talking the talk. To attract and retain tomorrow’s real estate professional a broker must do more than talk about culture; they will have to present it and allow the agent to experience it themselves.

12 thoughts on “Next Generation: Talent Attraction and Retention

  1. Wendy,

    Thank you for a well written article on why many brokerages are where they are today. I like the fact that rather than recruitment you are using terms like talent attraction and retention.

    Every Broker’s challenge will be to overcome the financial incentive and replace it with the attraction incentive – good luck on your quest.

    Everyday my e-mail box is full of 100% offers from one new company after the next – we should all know when something is really to good to be true. Perhaps we will shortly see them offering 124% splits – LOL.

    What will your brand do differently to attract that high producing agent? Could you give us 5 examples?

  2. Wendy,

    Right now we have a very high unemployment rate in many parts of the country and more than 50% of our population is looking to change careers. You would think that Real Estate would be booming with agent growth even with today’s market conditions.

    Interestingly enough, I can spend less than thirty minutes with a real estate company and tell them why they are not growing, why they are not attracting the right talent and why their retention is horrible at best. Some listen but many do not and yet they wonder why they still have this recruiting battle to fight. Culture, leadership, support, development, and so forth absolutely all help in attracting talent.

    Getting people to look at you company and joining is only a small part of the overall growth equation. Attracting quality talent is by far the number one critical business step in a real estate company’s cycle of growth and retention. Attracting the right talent with your suite of services is no good if you attract and attempt to retain the wrong people. Corporate America has long known this “success key to hiring” yet most real estate companies still want “bodies”.

    A comment on compensation, income is often sited as the number one reason people enter this business. Giving away the company to a person who is not deserving or qualified is one of the worst things a broker can do to harm their agent retention pool and net growth. When there is a lack of perceived value “money” is always the issue. Often times it seems many Brokers forget they are in the business to make money. On top of that they forget what makes their company so special and how to communicate the value in a way the agent can understand how it will help them grow. Offering higher splits is a weak cop out many times just to get bodies in hopes a diamond in the rough will appear.

    A comment on agent training, career development is often sited as one of the top two job satisfiers. Sheep dipping everyone into the same bucket of training is “old school”. In order to best help a person advance their career a managing broker “must” understand a person’s strengths and weaknesses and be willing to coach an agent to improved performance for retention. Offering training is not enough today, offering the right training focused on the agent’s core skill sets and competencies will get your further faster. Oh and remember, this is only as good as you are at attracting the “right” fit talent.

    Wendy, I concur with your blog today. You can see from my short five minute comment that I have so much more to say on the subject. Thanks for revving my engine today.

    Maria Mull
    919.372.9092

  3. Very well said Wendy. What you are describing is companies responding to this next generation by changing the way things were traditionally done in an industry. (I believe automotive is another parallel) Imagine a real estate company behaving like an a-typical organization with assets; ours happen to be human capital; a work force, ours made up of sales people; and an investment product; in our case, real estate.

    I would bet any amount of money an organization following this next generation business strategy will outperform the random non-selective collection of agents doing business as usual.

  4. Wendy…here is another piece I thought you would appreciate as it puts a different spin on your insightful comments.

    Reel Estate…Wet Lands…

    That’s what this past Sunday on the water fishing was like for me. It was beautiful out; the seas were flat; I had a few close friends on board; we were catching fish, and I was dreaming about a name for the next boat . . . life was good!!! On the ride back to the marina, I began thinking about what I needed to do next week at the office; conversations I was going to have, meetings scheduled, etc., and the parallels between my fishing trip and recruiting dawned on me.

    I realized our industry actually goes fishing every day, and their hope is to have a great day like I had. So let me share my 6 simple steps to a “great day.”

    1. Don’t fish without lines in the water
    2. Don’t fish with old lines
    3. If you fish with one line in the water…you might catch a fish
    4. If you fish with 10 lines in the water… your odds get better
    5. Always use fresh bait
    6. And always use the right bait

    Every day, we speak with organizations around the world who would like to catch fish, but is using broken lines, bad bait, and no poles…and don’t understand why they can’t have great days.

    My family said if I keep leaving them at home to fish with my buddies, the boat name is…A Loan Again.

  5. Wendy,
    I like this article and, ironically, it came right when I’d written my blog about the reasons why I, as a Gen X&Y cusper, choose to work where I’m at, Better Homes and Gardens The Masiello Group in Keene, NH. From the Gen X&Y perspective, what Wendy wrote about above is pretty right on for me. Just short of building a company focused on the Gen X&Y inspired models, I’ve chosen for now to be here at this company, read on for why:

    http://activerain.com/blogsview/1200126/attracting-generation-y-agents

  6. I was inspired by the Facebook F8 conference last week and just did a video blog on this at my site. One of the things during that conference that caught my hear was when the former CEO of FriendFeed shared that he and his team discovered the magic number 5.

    If a new registered user didn't find at least 5 of their friends on the FriendFeed website, they were less likely to become an active user.

    I feel a real estate brokerage and can learn alot from that research even if it is for a social media website.

    Ask yourself,

    Is every agent in your brokerage connected to 5 other people in your brokerage? – maybe its staff, maybe its other agents, or maybe its the LO. But I think its important that an agent have relationships so they feel comfortable showing back up to the office every day and every week.

    Like you said its about the agent experiencing the culture. And culture is created by people.

    A thought about training and coaching also – As you shared and Maria Mull talked about it, but I'm still stuck on the culture, the experience, them feeling comfortable and that magic number of 5. I don't think it matters how awesome your training and coaching is if the agent doesn't have relationships with SOMEONE in the office.

    My advice, put together and Ambassadors Council, a group of current real estate agents in the office that can engage them and reach out to new recruits. So that the recruit has some familiar faces they know.

    If you want to increase your real estate agent retention, get them connected to five people already in your real estate office.

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  9. I feel a real estate brokerage and can learn alot from that research even if it is for a social media website.

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