Last week, I started a discussion concerning the noteworthy desire many real estate companies have to hire ex-military individuals. There are some significant obstacles that make this process a challenge, and very few real estate companies have been successful in this endeavor. If you didn’t catch the previous discussion, you may need some background to understand today’s WorkPuzzle.
While real estate companies have not been overly successful in hiring veterans, there are some other industries that have cracked the code. For example, insurance companies and financial services companies have demonstrated success at transitioning military personnel into sales positions.
The compensation model for real estate agents (full commission from day one) is a “deal breaker” for most individuals leaving the military. Other industries have overcome this hurdle by offering “commission draws” or startup compensation packages, but real estate companies have not embraced this practice.
So, are we at an impasse? Perhaps. However, I’d like to suggest you consider one more example of an industry that has been successful at hiring veterans—the franchise industry.
This may come as a surprise, but some franchises have been remarkably successful at attracting and “hiring” ex-military individuals. This topic was recently identified as one of the top small business trends in the country. Also, Michelle Obama recently promoted the marketing of franchises to veterans.
Why are franchises so interested in hiring veterans? For the same reasons you’re interested in
hiring them---they believe they are uniquely qualified to be successful in the
role as a franchise owner.
There is much to read on this topic (starting with the articles cited above), and I hope I have peaked your interest on investigating this connection on your own. As I’ve studied this connection, I’ve noticed three things that franchises do well in attracting veterans.
The Cookbook Mentality. Franchises are famous for promoting the idea that success is the result of closely following a proven system developed by the franchisor. “If you meticulously follow these 50 steps, you will be successful,” is the franchise promise.
Military veterans connect with this line of reasoning because it is very similar to what they’ve experienced in the military. A soldier is not expected to develop his or her own plan for shooting a missile at a target. That would be crazy. Instead, they are expected to follow a detailed specification that, if executed correctly, will guarantee the missile will hit its target.
If you want to be more successful at hiring ex-military individuals, develop your own “cookbook,” and then promote the idea by following the step-by-step procedure that will guarantee success. Be ready to demonstrate how other veterans have stepped into this position, followed the cookbook, and experienced success according to the plan.
The Expectation of Camaraderie. Some of the best memories I have from serving in the military center around shared experiences. The solidarity in purpose allows relationships to flourish in a unique manner. When people leave the military, they miss this feeling and often seek-out other individuals with military backgrounds with which to reconnect.
Franchise companies have noticed this pattern and use it to
market to veterans. Research this topic
and you’ll quickly notice that franchise aggregators make a big deal of
highlighting the number of veterans who are successful franchise owners.
It doesn’t stop there. Some franchise companies highlight support and mentoring groups for ex-military personnel. These companies are purposely attempting to duplicate the camaraderie the service members felt when they were in the military.
Convincing a person that he/she will be successful in a new role is an important selling point, but convincing a person that they belong there is a powerful attraction. Notice the company highlighted in the graphic—this company produces a searchable list of names, branch of service, rank when they left the military, and location. A candidate who goes on this company’s career site quickly sees how he or she could potentially fit into this community of veterans.
The Path to Financing. As you may know, buying into a franchise is expensive. Start-up costs for most franchises are $50,000 and up. There are very few veterans (or normal citizens) who are able to afford this expense as a lump sum. Every franchise company has to deal with the issue of providing financing options to potential franchisees.
Real estate companies are fortunate that their startup fees for agents are not this substantial. However, to a military member with a family living paycheck-to-paycheck, even $5,000 can feel like an insurmountable hurdle. You’re in the same boat as the franchise company.
Franchise companies have become very creative on this issue. Options include commercial loans, SBA loans, collateral-backed bank loans, crowd-sourced funding, angel investors, third-party lenders, etc. The Wall Street Journal recently reported that the Department of Veterans Affairs runs a program called Patriot Express (it is called this because of the fast approval times for the loans) that makes business loans up to $500,000 to active-duty military preparing to transition to civilian life, as well as to spouses and survivors of veterans.
When a veteran makes contact with a franchise company, they are ready and well-prepared for the financing question. They assume the candidate will not be able to afford the start-up costs, and they put time and effort into helping them solve the financing issue.
To successfully hire veterans, real estate companies need to adopt the same posture. The financing issue needs to be “front and center” and addressed early in the hiring process. To someone leaving the military, there is not much to talk about until this issue is addressed and solved.
Summary
I had one of our readers write me earlier this week and mention (after reading the previous WorkPuzzle) she was looking forward to hearing about my “magic bullet” for hiring veterans.
I wish there was a magic bullet. Unfortunately, hiring veterans takes strategic focus and a lot of hard work.
Most real estate companies have not boiled down their process to the franchise “cookbook” level. Often new agents are expected to be self-directed and creative in how they build their businesses. This is a tough transition for most veterans to make.
Most real estate companies do not have groups of veterans working in the company who are ready and willing to provide the camaraderie that makes an ex-military person feel at home. This takes time, effort, and focus to build.
Most real estate companies have not thought through the financing challenges that veterans face in making a transition to the real estate industry. On this issue, franchises are very proactive. They know the challenges the candidates face and they’re ready and able provide solutions.
If your company is ready and willing to address these issues, you can be successful at hiring veterans. Franchise companies have proven it can be done. Real estate companies could potentially have even greater success because the financial barriers to entry are not as significant as franchises.
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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.
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