In our most recent discussions, I’ve attempted to provide some insight regarding how candidates who work in traditional jobs perceive the real estate industry. When we talk about this topic, the elephant in the room is compensation. How do you get an individual who is used to working in a “normal” occupation to quit his or her job and take on the risks that are inherent to working as a full commission real estate agent?
While this is a challenge, it is not impossible. There are many talented people among the 13 million individuals who find themselves unemployed. There are also an additional 26 million people who have jobs today, but are constantly looking to apply their talents to new career opportunities. Many of these people have great skills, competencies, and motivation, but they’re frustrated, lack opportunity, or think they’ll find themselves unemployed in the near future due to circumstances they can’t control.
When the individuals in one of these two groups start to consider real estate as a possibility, the first and most significant obstacle that must be overcome is compensation. Unless a person can see a clear and highly probable path for making income, there will be immediate resistance and most people will disengage--especially the talented ones. Here are some ideas on keeping this from happening:
- Discuss Compensation Early in the Conversation. Acknowledging the issue and addressing it early in the conversation frees a person up to hear the rest of what you’re going to say during an interview. It is not hard to say something like, “I bet your number one question about real estate is how you’re going to get paid for doing this kind of work…” Avoiding the issue or waiting until the end of an interview to discuss compensation makes candidates think you have something to hide.
- Answer the Most Common Questions Before They’re Asked. The most talented people among us have more than one employment option. They want to know whether the option you’re offering is better than the others they are considering. They have questions like, “What percentage of the people who work with you make my desired level of compensation?”...“What are the obstacles that tripped up those who are not making it?”...“Do you have two or three people who I can talk with who were in my situation a year ago who are meeting their compensation goals today?”
- Learn About The Candidate’s Other Options. Ask questions about what else a candidate is considering for employment. Talented people always have options, so if you can get a person to articulate these options you can start to have a fair discussion regarding whether real estate is right for them. Try to maintain the perspective that you are an objective third party who is honestly trying to help the person make a good decision about their future. Validating the existence and viability of other options is the best place to start.
Once a person feels heard and believes that you understand their circumstances, they are much more willing to consider the things you have to say. There is still the hurdle of getting someone who is used to a normal salary with benefits to feel comfortable with a real estate compensation model. Here are some ideas to help you over this obstacle:
- Discuss the Decline of Traditional Jobs with Benefits. As mentioned in an earlier post, about 30% of the workers in the United States now work as independent contractors, and this percentage is trending upwards quickly. Some experts expect this level to exceed 50% in the next 15 to 20 years. As the traditional job becomes scarce, opportunities to succeed will naturally follow this trend. Teaching someone to operate in the independent contractor world is a valuable contribution you can make to an individual's career.
- Discuss the Long Tradition Americans Have of Becoming Business Owners. The U.S. Census Bureau reports that there are 23 million businesses in the United States. Of this total, over 17 million are businesses that have zero employees. Think about that number... There are about 17 million people who own their own business by themselves. And these aren’t just goofy businesses, they contribute almost $1 trillion to the gross domestic product. Use the paradigm of starting a business when you introduce someone to idea of becoming a real estate agent. While such a change may still feel scary, it can make it seem more normal, doable, and even exciting.
- Discuss the Idea of Duel Careers. Many real estate companies resist hiring “part-time” agents. This policy has some merit because there is a lot of data that suggests that those who work part-time do not maintain the necessary focus to be successful. For the large majority of people who have been involved in real estate in the past, this has been true. However, there is an emerging trend among working individuals that is worth noting: many of the most talented people in our society want to work more than one job for the sake of interest and flexibility. The real estate industry has an opportunity to tap this resource in some new and exciting ways. I’ll write more on this topic in a future blog, but for now be on the lookout for this issue when you interview highly talented individuals.
Compensation will always be one of the major issues in discussing any employment scenario. Being able to discuss the issue with confidence, a sense of creativity, and hope, will increase your chances of hiring talented agents.
Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. Comments or questions are welcome. If you're an email subscriber, reply to this WorkPuzzle email. If you read the blog directly from the web, you can click the "comments" link below.
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