WorkPuzzle

Population Dynamics 2: Understanding Fundamental Changes

Last Friday, I had the opportunity to spend some time with the owners and managers of a large real estate company in the Northwest.  I enjoy these meetings because it gives me an opportunity to see and hear the realities of the business challenges many of you are facing.

The message I heard on Friday...the real estate world is changing quickly and there is a constant need to evaluate and plot a course to meet the changes.  As leaders struggle with this issue, our first inclination is to focus on surface issues (i.e. How do my circumstances today resemble something that happened in the past?).  But by doing this, there is a tendency to overlook the core issues that are responsible for the changes.

I touched on this topic last week.  How do you first find the “horizon” in your recruiting world and then work on developing tactics that meet reality?  As you ask yourself this question and wrestle with the answers, you may find that your “reality” is much different than you expected and even more troublesome to understand.

I ran across a discussion by John Sumser over the weekend that does a great job of illustrating one of these fundamental changes.  The topic is the traditional understanding of a population pyramid.

“I am going to stick with the pyramid idea just a little longer.  The theme is so embedded in our world view that it shapes the way we see, imagine and execute our possibilities.

The ‘Recruiting Funnel', where masses of candidates are winnowed down to a select few, is an example of pyramid theory.  The whole notion emerges from the longstanding shape of families and governments:  a few old people running things, lots of younger people ‘being run’.  It’s mommy, daddy, and five kids.  It’s the foundation of hierarchical management.  Large organizations, with their single point (winnowing) authority, perpetuate the view that pyramids are essential elements of society.

The reality is that family structure has changed.  One or two kids and two parents is not an organization that can be run hierarchically.  Combined with technology that is flattening our organizations, we’re in a transition period.  The pyramid is built into our perceptual framework and it’s outmoded.

Historically, economic growth depends on a pyramid structure.  More people, more work, more jobs, more goods.  We have no idea how to engineer growth without an underlying impetus of population expansion.”

So, John’s point is that the disruption of the traditional population pyramid changes everything.  It is a fundamental issue that must be understood in order to build successful recruiting strategies (or to run a government, or to market a college, or to build a restaurant clientele, etc.).  If you were to make plans without understanding this important piece of information, you'd struggle to be successful. 

I brought this example up to get you thinking about the fundamental issues that may be shaping your business.  Of course, population dynamics affect everyone, but many other important issues are industry specific. 

What are the foundational issues that have changed in your profession, industry, and community?  The companies that can successfully identify these issues and deploy tactics that address these changes are the ones who will find themselves significantly ahead of their competitors in the coming years.

---

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.

Population Dynamics: Does Your Ideal Agent Really Exist?

As we start the New Year, many of our clients are putting together their recruiting plans for 2011.  It’s an exciting season for our company because we have the opportunity to hear about many new ideas, assist in implementation, and start to envision how 2011 will shape up.

As this process unfolds, I’ve noticed a trend.  Many companies tend to quickly focus their efforts on the tactics of recruiting and don’t take time to consider the bigger picture.  The tendency is to use last year’s methodologies as a baseline and then try to tweak things to get results.  Planning in this manner will result in missed opportunities.  Instead, take some time to step back and look at the horizon. 

In recruiting, the term “horizon” includes understanding the “population dynamics” of your area.  Once you’ve figured out who you want to recruit, you’ll need to know if there are enough potential candidates available in your recruiting area for optimal goal achievement.

Experienced agent recruiting, convincing experienced agents to leave their company and join your team, is a great example of one way to identify a group of potential agents.  You have a vision of your ideal agent.  This includes a list of characteristics such as revenue history, experience level, current company, reputation in the marketplace, etc.  The more complete and valid you make your ideal agent profile, the better your chances will be of finding an agent who will produce the needed revenue in your organization and help you realize a return on your recruiting efforts. 

But, do the population dynamics of your recruiting horizon support your vision?  If your requirements are too specific, you’ll be unable to meet your goal AND you’ll likely need to lower your standards and hire agents who do not meet your long-term objectives.  To get an answer to this question, consider some of these factors: 

1. Geography.   Get a map and draw a circle around your office.  As the radius, use whatever distance you believe people will reasonably travel to be part of your office.  Now, mark each competitive real estate office inside your circle on the map.  Next to the office, write the number of agents who work in that office.
2. Age / Gender.   While it is frowned upon by EEOC regulators to exclude anyone from your office based on age and gender, there is nothing wrong with focusing your proactive recruiting efforts on the specific individuals who will best meet the needs of your team in the years to come.  Many real estate offices have a substantial number of agents who will retire in the next few years.  You can increase the diversity in your office by hiring younger agents who can grow into their positions.  Also, some groups of clients are better served by hiring one gender rather than the other.  Again, the point is not to exclude anyone, rather to build your team with the optimal players who will maximize revenue.
3. Client Focus and Success.   Effective real estate sales execution is a neighborhood-by-neighborhood exercise.  If your office is getting shut out of certain neighborhoods by your competitors, then how can that problem be solved by recruiting?  It only makes sense to target the individual neighborhoods where you’re missing opportunities.  Can the agents who are successful in those neighborhoods be lured away from their companies?  If so, it’s a big win for your office.

There are probably several more population dynamics categories that can be targeted.  The point is that defining what kind of population is available is an important first step in building a recruiting plan.  If you don’t have this starting point, then deploying recruiting tactics may quickly and effectively lead you to an undesirable destination.

Going through an exercise like this will produce one of two results:  The hopeful result is that you’ll have identified exactly who you’re looking for, know whether the potential candidates exist in your recruiting horizon, and be ready to attack the challenge of hiring them with energy and excitement.  The more common result is that this exercise will help you realize that your objectives may not be realistic.  If this is your result, work to identify new sources for locating candidates and review well-thought-out compromises you are willing to make in order to meet your long-term objectives.  With either result, you’ll have a clearer view of your recruiting horizon and will have further defined your goals for the year. 

---

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.

Trends and Opportunities for 2011: What Will the New Year Bring in the Recruiting World?

I know I mentioned on Monday that I would wrap up this discussion, but I found an outstanding article earlier this week that is worth sharing.  The article was written by Kevin Wheeler.  Kevin is a recruiting guru who has worked with many of the best companies in the United States.  He has become one of the most well-respected voices in the recruiting industry.  I’ve read many of Kevin's articles over the past several years and have benefited greatly from his viewpoint.

Kevin's recent article highlights some predictions for 2011 and is particularly insightful.  Since he doesn’t specialize in the real estate industry, I’ll provide some commentary on how Kevin's thoughts apply to what you may be experiencing.

Hiring Situation

“Mid-level hiring will remain slow, and there will be few additions to support administrative staff.  Much of this hiring will be outsourced to Recruitment Process Outsourcing companies (RPOs) and agencies that specialize in specific areas.  The demand for workers with minimal skills will shrink even further as technology replaces them.  Many organizations have already replaced receptionists with automated sign-in systems and automatic call systems.  Accounting and bookkeeping systems are using OCR to automatically input receipts and other data into their systems.”

“Mid-level hiring” is the category of positions that we see typically make a transition to the real estate industry.  The good news…the supply will be good (lots of people will remain out of work).  The bad news…many people in this position can’t afford to start a real estate career, or don’t want to risk giving up their current job (if they still have one).

Recruitment Process Outsourcing (RPO)

“RPO will continue to grow as a service with more sophisticated approaches and more technology.  Some firms will focus on specific regions or on functional verticals.  These RPOs will invest the time and conduct research that will help them build large communities of candidates with narrow, deep expertise.  They will do this cheaper and better than a corporate recruiter can because of dedicated resources and investment in technology.  Corporate recruiting functions need to build better ways to assess RPO firms, establish firm performance criteria, and negotiate contracts based on how well your needs are met, rather than on cost.”

In the interest of full disclosure, Tidemark is an RPO firm.  These are the issues we focus on every day and companies use our services because it’s cheaper and more effective than sourcing candidates on their own.

Talent Management

“I have long advocated that every organization should increase its focus on developing a holistic and integrated approach to talent.  That will begin to happen in earnest this year.  Every major survey, including those from Pricewaterhouse Coopers and the Boston Consulting Group, indicate that CEOs are now relentlessly focused on getting better people in their organizations and are willing to put the resources in place to make it happen.

Critical positions need to be clearly identified, and there should be a plan as to how those positions will be filled.  The plans should rely on a mixture of internal promotions/transfer as well as external placement.  Development should be a key component and lead to a percentage of positions being filled by newly trained internal candidates.  Entry-level hiring can feed this pool, as long as development and assessment are in place.  Rigorous performance assessment in real time as well as feedback to recruiting on success traits are also important parts of a successful talent management plan.”

As we talk to real estate leaders across the country, we constantly hear about the lack of talent at the first-level manager position (commonly referred to as a branch manager or sales manager).  This is, by far, the number one issue that limits growth for most real estate companies.  How can this be solved? Understand and apply the “talent management” strategies that companies in other industries have developed.  One quick warning…doing this is not quick, easy, or cheap.

Employment Brand

“Building a believable and vigorous brand will consume more time and resources than it did in 2010.  A recruiting website will be much less critical, although still important, to success.  It will be more important to use a variety of marketing tools, including targeted marketing, Twitter, and Facebook, as well as LinkedIn, to interest more people in learning about your organization and opportunities.”

We’ve spent a bunch of time in WorkPuzzle over the past year talking about positioning your company in the mind of the potential candidate.  Just like someone needs to envision your company as the best choice when buying or selling a house, they also need to see your company as one of the most desirable places to work in your local marketplace.

Internal Sourcing Teams

“Internal sourcing teams will morph from a focus on Internet search, which will remain a small part of the process, to a major focus on social media.  The purpose of the sourcing team will be to ensure a supply of interested people who can be turned into candidates by a combination of skilled recruiter involvement and sophisticated marketing tools.  These teams will be small, technically highly skilled, and capable of being community managers, marketers, and experts in identifying and assessing key candidates virtually.”

In late November and early December, Dave Mashburn wrote a WorkPuzzle series about Lessons from an Expert Recuiter.  This series (1,2,3,4) highlights Kevin’s point.  There is no substitute for having one of the most talented individuals in your company be the first line of interface to the candidates who are considering making a transition to a real estate career.

Social Media

“In every way, the backbone of the recruiting function will be its ability to use social media — the tools that connect and engage millions of potential candidates.  Their success will be in how effective they are in convincing people to take part in the sub-communities that they create for their firms.  This will require a strategy that has been carefully thought out and is revisited constantly and updated as its effectiveness is evaluated.

Whether they use Facebook, Hyves, LinkedIn, or another community is immaterial.  What matters is that the community they choose attracts the kind of people they need.  New smaller specialist communities may arise over the next year, and staying abreast of these, or even creating them, may make the difference between success and failure.”

This is an area that needs growth for many real estate companies and it’s an arena that is a major focus for our company in 2011.

Kevin’s Summary

"In many ways 2011 will look a lot like 2010 but with more focus on implementing the initiatives that were started in 2010 and in being realistic about the use of RPO, outsourcing, and the need to focus on critical positions."

---

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.

Trends and Opportunities For 2011: What are the Best Sellers Trying to Tell You?

Happy New Year!  I’m going to wrap up this discussion today by sharing some insight from some of the bestselling business books of 2010.  The popular blog 800CEOREAD and Inc. Magazine compiled the list below.  I think we can learn about trends and opportunities by noticing what others are reading.   

Strengths Finder 2.0 by Tom Rath; Gallup Press -- The original Strengths Finder book was published in 2001.  A full decade has passed and people are still trying to figure out where they best fit in the workplace.  This particular book was published in 2007 and it’s still at the top of the list.

The Go-Giver: A Little Story about a Powerful Business Idea by Bob Burg, John David Mann; Portfolio -- People are trying to find meaning in their work and purpose in the arena of business.

Switch: How to Change Things When Change Is Hard by Chip Heath, Dan Heath; Broadway -- When things are difficult, change is necessary to stay in business and make sense of the new realities.

Love Leadership: The New Way to Lead in a Fear-Based World by John Hope Bryant; Jossey-Bass -- You’ll see a lot of the books on this list addressing the emotion of fear.  There’s a lot of fear out there…

Return of the Gold: The Journey of Jerry Colangelo and the Redeem Team by Dan Bickley; Morgan James Publishing -- This is a story of how the NBA has sunk to an incredible low after many good years in the past.  There are many organizations that need to make a comeback after being beat-up by the recession.

Doing Both: How Cisco Captures Today’s Profit and Drives Tomorrow’s Growth by Inder Sidhu; FT Press -- Great case study on a great company.  

Rich Dad’s Conspiracy of the Rich: The 8 New Rules of Money by Robert T. Kiyosaki; Business Plus

Accelerating Out of the Great Recession: How to Win in a Slow-Growth Economy by David Rhodes, Daniel Stelter; McGraw-Hill -- More fear.  Both of the previous books offer help on making sense of what is happening in the economy.

Linchpin: Are You Indispensable? by Seth Godin; Portfolio -- Many people are concerned about keeping their jobs and maintaining a viable career.

What Got You Here Won’t Get You There: How Successful People Become Even More Successful by Marshall Goldsmith, Mark Reiter; Hyperion -- More change.  People want help with setting a path for the future, as they are feeling anxiety about their current situation.  

How Companies Win: Profiting from Demand-Driven Business Models No Matter What Business You’re In by Rick Kash, David Calhoun; HarperBusiness

Keep Swinging: An Entrepreneur’s Story of Overcoming Adversity & Achieving Small Business Success by Jay Myers, Darren Dahl; Morgan James Publishing -- Entrepreneurs are alive and well.  Although they try to make it sound new, businesses have always found success through identifing and meeting needs. 

Six Pixels of Separation: Everyone Is Connected. Connect Your Business to Everyone by Mitch Joel, Business Plus -- Businesses are still trying to make sense of the social networking phenomenon.

Rich Dad’s Prophecy: Why the Biggest Stock Market Crash in History Is Still Coming… and How You Can Prepare Yourself and Profit from It! by Robert T. Kiyosaki, Sharon L Lechter; Business Plus

Mojo: How to Get It, How to Keep It, How to Get It Back If You Lose It by Marshall Goldsmith; Hyperion -- Some guys are just good at publishing books!  This is the second book on this list by each of these authors. 

The M-Factor: How the Millennial Generation Is Rocking the Workplace by Lynn Lancaster, David Stillman; HarperBusiness

Employees First, Customers Second: Turning Conventional Management Upside Down by Vineet Nayar, Harvard Business Press -- People always want help dealing with employees and people.  For some reason, we never seem to get this totally figured out.

The Medici Effect: Breakthrough Insights at the Intersection of Ideas, Concepts, and Cultures by Frans Johansson; Harvard Business Press -- This is one of those eclectic idea books that capitalizes more on great writing than on meaningful ideas (ex. The Tipping Point and Freakonomics).  These books were all the rage a few years ago, but are now starting to wane...

Different: Escaping the Competitive Herd by Youngme Moon; Crown

Empowered: Unleash Your Employees, Energize Your Customers, and Transform Your Business by Josh Bernoff, Ted Schadler; Harvard Business Press -- These are the motivational business books that tend to make it into the bestseller lists each year.

The End of the Free Market: Who Wins the War Between States and Corporations? by Ian Bremmer; Portfolio

Spend Shift: How the Post-Crisis Values Revolution Is Changing the Way We Buy, Sell, and Live by John Gerzema, Michael D’Antonio; Jossey-Bass -- Small businesses are worried about how the government will impact their ability to be successful in the future.

Crush It!: Why Now Is the Time to Cash in on Your Passion by Gary Vaynerchuck; Harper Studio

The Mirror Test: Is Your Business Really Breathing? by Jeffrey W. Hayzlett, Jim Eber; Business Plus

Inside Every Woman: Using the 10 Strengths You Didn’t Know You Had to Get the Career and Life You Want Now by Vickie Milazzo; John Wiley & Sons

=================================================================================

I hope this helps you gain some perspective for the year ahead.  If some of these concerns resonate with you, pick a couple of books off the list and start your own reading program for 2011.   

---

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.

Trends and Opportunities For 2011: Fantasy Team Hiring and Firing

This next trend was brought to my attention by an article that Peter Weddle recently wrote.  As I’ve mentioned in the past, Peter quite often is able to see and explain things that the rest of us don’t easily notice.  His insight on this topic is quite good.

Are you one of the 30 million people in the U.S. who participate in a fantasy sports league?  In not, you probably have relatives or friends who participate in this obsession.  The basic premise of the hobby is that participants select fictitious teams of players and then use real statistics to determine who wins or loses. Winning strategies usually involve continually selecting those with the best statistics and releasing those who don’t perform well.

Peter makes the point that during the recession, corporate America has developed their own “fantasy sports” techniques to manage employees.

“Employees may never have really been treated as assets – despite the sugar-coated words of their corporate executives – but today, they are managed as statistics.  Without any explanation or notice, companies have begun to prune their ranks of employees they deem to have less talent and to limit their hiring to only those who are perceived to have the most talent.  It is fantasy sports team management for real.

The term for this new approach is 'quiet recruiting.'  Even as employers continue to slim down their structure and lay off excess employees, they are silently trading out those considered less capable for those with more perceived value.

• In some cases, that value is acquired through 'bargain staffing.'  Employers simply hire an often younger and less experienced person who can do (or be taught to do) much of what an often older and more experienced person would accomplish, but at a much lower salary.

• In other cases, the value is acquired by 'all star staffing.' Employers trade out those in their workforce who they judge to be 'C level' performers (or worse) in order to adjust their structure and hire individuals with a track record of 'A level' performance.

Although seldom formally acknowledged, bargain staffing has always been a part of the American workplace.  If offshoring moved work to less expensive labor overseas, such 'downcosting' moved it to cheaper employees right here at home.  It is an insidious and often illegal strategy, but one that can effectively pare payroll and benefit expenses.  Hence, employers consistently disclaim any allegiance to age bias, but all too often practice de facto ageism in their staffing.

What’s new in the post-Great Recession era, therefore, is all star staffing.  For the first time ever, many companies are now hiring rank and file workers with the same score card and tactics they have long used to hire their most senior executives.  They are no longer content with a normal distribution of capability; they want, instead, to skew toward a preponderance of accomplished performers.

On the surface, that strategy would appear to be beneficial for America’s workers.  In reality, it’s quite the opposite.  Tens of millions of decent, dedicated and capable people—men and women who have successfully worked their entire lives—are now unemployed, unsuccessful in their search for a new job and unable to figure out why.”

Certainly the ethics of this strategy could be argued both ways. It is a problem that involves unfair treatment and potentially illegal behavior.  But, the reality is that this kind of hiring/firing is going on in the workplace and it will probably continue until the employer/employee balance shifts back to the employee.

Here’s the good news:  As a recruiter or hiring manager, you have the opportunity to be part of a solution to this problem and help yourself at the same time.  As Peter pointed out…“Tens of millions of decent, dedicated and capable people—men and women who have successfully worked their entire lives—are now unemployed, unsuccessful in their search for a new job and unable to figure out why.”

It only makes sense that some of these capable, experienced, and dedicated people could be a fit on your team.  Combine this with the previously discussed trend of independent contractor / full commission hiring becoming more common, and the pool of potential candidates may be much larger than you envision.

How do you connect with these candidates?  That’s a difficult question.  But, it is one we have addressed in many WorkPuzzle discussions over the last year.  As you’re tooling around the office waiting for things to pick up after the first of the year, take some time to review some of the topics we’ve covered.

---

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.

Trends and Opportunities For 2011: Full Commission Jobs Are Becoming More Common

I hope you’ve wrapped up a wonderful holiday weekend with family and friends.  Assuming that you got everything you wanted for Christmas and you’re not out exploring the after-Christmas sales, you’re probably starting to think about the year ahead.

The job of any leader is to help those on their team to see and understand the business trends and opportunities that will affect their future.  Just as an airline pilot lets his passengers know when he sees turbulence on the radar, it will help your teammates feel more safe and be more productive if you can help them interpret the events going on around them.

We’ll take the next few posts to relay some of the trends and opportunities we see for 2011.  The purpose of these discussions is not to provide an exhaustive list of things that we think will happen in the future, rather it is to help get you in the mode of recognizing how the things going on around you will potentially affect those on your team and your recruiting efforts.

The first topic I’ll address is the future of full commission jobs.  As we mentioned in a WorkPuzzle discussion last summer, there is a lot of economic pressure being put on the traditional “job with benefits.”  At the time, I made the point that more and more companies are moving toward independent contractor employment models.

A recent article in Business Week conveys how this trend is not only continuing, but may be growing in the coming years:

 ================================================================================

You can't buy Dallas clothier J. Hilburn's shirts in a retail store or online. Nonetheless, the company expects to sell 60,000 of them this year by dispatching salespeople to customers' homes or offices to take measurements and suggest fabrics and styles.  They send their orders to a factory near Macau, China, where shirts are cut and sewn from Italian fabric. Buyers receive them in two to three weeks and pay between $80 and $150, less than half the price of similar shirts sold in some high-end stores....

Some 30,000 people have bought clothing or accessories from Hilburn, the company says.  And 93 percent of its customers return for a second purchase, says Davis.  Since Hilburn was founded in 2007, its sales have tripled each year and are on track to top $9 million in 2010, driven by growing demand for its shirts as well as newer products such as trousers, cuff links, and cashmere sweaters.  "Customers are basically saying, 'You've become my solution, now offer me more products,' " says Davis, 38.

While new customers can find sales reps through Hilburn's website, most come through referrals.  The company has 650 "style advisers" who earn commissions of up to 25 percent on clothing they sell after paying $399 for fabric samples, sales materials, and training...

Amy Mancini started selling Hilburn shirts in 2008.  A mother of three in West Boylston, Mass., the former nurse says she earns about $60,000 annually, spending between 20 and 25 hours a week managing other reps and visiting customers.  "I have clients anywhere from college students all the way up to presidents and CEOs," she says.  The sales calls are crucial to getting measurements right and making customers feel comfortable about buying a garment they can't try on.  Clients' measurements are stored in a database, and the company plans to launch an online store next year where customers can order new shirts once they've been fitted….

The model removes some traditional up-front costs of retailing.  "You've got a sales force you're not paying until they sell things.  You're not paying to make the shirt until the shirt is sold," says Brian O'Malley, a Hilburn board member and partner at Battery Ventures.

================================================================================

Notice the last statement in the article... Isn’t this what the real estate industry has been saying for several decades?  Of course, it is.  What’s changing is that traditional industries, such as retail, are starting to use the same methodologies.

If you’re trying to attract talent into the real estate industry, this is exciting stuff.  It is always difficult to get someone to consider something new.  But when the value proposition is completely different (full commission) than what most people are used to, the jump can seem insurmountable.  As the independent contractor becomes more common, the gap in someone’s perception of what’s “normal” is diminished.  This should make the recruiting process easier.

The potential downside of this trend is that it may force you to compete with other businesses who will be continually trying to perfect the independent contractor employment model.  If someone can earn $60K working 20 hours per week measuring people for shirts, you may have to sharpen your value proposition in order to compete when it comes to recruiting.

---

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.

Have You Experienced TED? Great Ideas in 18 Minutes or Less

Where do you go to get great ideas?  I like to read...and I tend to best assimilate knowledge this way.  I know not everyone has this capacity or interest—some of you are more visual and auditory.  If you’re in this latter group of learners, you might want to spend some time on TED.

TED (an abbreviation for Technology, Entertainment, Design) is a nonprofit organization that began in 1984 with the purpose of spreading great ideas.  For years, they’ve hosted annual conferences, and in 2007 they launched a video-enabled website that has become quite popular.

The premise of TED is to challenge the finest thought leaders in the world to give the best talk of their life…in 18 minutes or less.  The speeches are traditionally given at one of two live conferences held each year (one in Long Beach, CA and one in Oxford).  Although, it appears that TED has recently started adding more conferences as their popularity has grown.

Here is a speech that you may want to digest if you’re a recruiter or a hiring manager who wants to become better at engaging the most talented individuals:

 

In this talk, author and consultant, Simon Sinek explains how great leaders have inspired great causes—both throughout history and even in modern day life. They do so by reversing the normal order of discovery, focusing first and most passionately on the question “Why?”  Most people focus their effort on the questions “What?” and “How?” and never get to the most important question.

This oversight is very common in real estate recruiting, and it’s one of the main reasons that so few candidates are inspired to action after an interview.  I don’t want to say any more at the risk of stealing Simon’s thunder, but let me assure you if you can master this technique and apply it to your candidate interactions, your effectiveness will skyrocket.  Enjoy!

---

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.

Effective Recruiting: A Microwave or a Crock Pot?

I hope you’ve had the opportunity to participate in the discussion that Dave has been facilitating on WorkPuzzle over the last two weeks concerning the best practices of high-performing recruiters (1,2,3,4).  We’ve had a lot of great feedback on this issue, so it seems to be an area that many of us are striving to improve.

I'd like to add to the discussion by pointing out a mindset that we’ve noticed among many of the highly productive recruiters and hiring managers with whom we’ve worked over the last few years.  This mindset is one of working a pipeline of candidates over time.

My attention to this topic was prompted by a recent errand I was running to drop my son off at a sports practice.  On the way back, I was flipping though the radio channels and ran across a call-in program that was offering financial advice.

The caller was asking the host whether he should replace his older car that had transmission problems with a newer model that was less likely to break down.  To purchase the newer model, the caller would have to take out a car loan.  The host’s ultimate advice to the caller was to pay the repair bill and stick with the car he had (which he owned free and clear).

What caught my attention was not the host’s answer, but how he delivered the information.  He did a great job of articulating what a pain and hassle it is to have a car that breaks down frequently. Secondly, he spent some time reminding the caller of the long-term objective—healthy finances down the line.  With those two issues setting the tone, he was able to deliver the answer the caller needed to hear.

The host summed up the discussion by saying:

“Most of the financial strategies that I teach are 'crock pot' strategies.  They take a long time to mature, but they do work if you have the discipline to stick to them.  There are a whole bunch of banks, financial services companies, and others, who want to sell you 'microwave' strategies.  These strategies are basically designed to alleviate short-term pain.  While they are sometimes effective at accomplishing this objective, they undermine your prospects for long-term financial success.”

Hopefully, you’re seeing the connection already.  Most good recruiting organizations resemble crock pots.  The individuals who work for these companies are willing to treat the hiring process from a long-term perspective, and put up with the hassles that this type of perspective, and ensuing process, entails.

Quite often, we have companies approach us with the hope that we can help them find some microwave strategies for hiring.  They have the short-term pain of diminished revenues and want recruiting efforts to fix this quickly.  While there are some methodologies for making that happen (it typically involves buying a “book of business” or offering commission splits that are unsustainable without very favorable market conditions), the research on this topic shows that the long-term success rate of such approaches is typically below 20%.

Good recruiting companies won’t play these odds.  Instead, they’ll develop a pipeline of candidates who have a high probability of success.  And then they’ll maintain the discipline of proactively working that pipeline with near religious consistency.  The results?  It works every time... 

---

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.

Competitive Advantage: Creating an Environment Where Your Agents Will Find Engagement—Part 4

Hopefully, over the last week you’ve had an opportunity to join the discussion (read part 1,2,3) we’ve been having regarding how the real estate industry has the opportunity to exploit the weaknesses of traditional employers to hire talented new agents for the future.

Last week, I made the following observation:

Many young people are willing to exchange a high income (or the potential at earning a high income) for job opportunities that offer flexibility, mental/social engagement, adventure, and a little bit of security.

Since the ability of real estate companies to offer high-income opportunities has been significantly reduced, it only makes sense to become proficient at focusing on the second half of this statement.

To help us understand this topic, I’d like to revisit the research compiled by Tony Schwarz in his recent book, The Way We’re Working Isn't Working.  Schwarz does a great job of identifying three arenas where managers and owners can improve the engagement those on their team will experience.

1.  Physical.  If you’re a leader or manager, creating a new way of working begins with recognizing that physical renewal serves performance.  You need to model physical renewal in your own behavior (discussed previously).  At the same time, organizations must create policies, practices, and services that support and encourage people to eat right, work out regularly, renew intermittently, and get enough sleep.

For example, what if a part of your recruiting message just focused on commuting?  Commuting can take a significant physical toll on peoples' productivity, draining their energy during the early-morning hours when they might otherwise be effective.  This is an annoyance to thousands of people and something that you can easily solve by allowing off-hour commuting and work from home opportunities.  As you know, this is not a big stretch for a real estate company.  There are many more ideas like this, but it’s up to you to find, highlight, and live them out in your organization.

2.  Emotional.  Every organization has a distinct emotional climate, and typically it’s set from the top.  A leader is effectively the “chief energy officer.”  The core responsibility of great leaders is to mobilize, focus, inspire, and regularly renew the energy of those they lead.

Leaders who default to negative emotions to motivate others may get the short-term performance they’re seeking, but the costs over time are high.  It is better to act like a doctor and propose to first “do no harm.”  This means avoid devaluing emotions such a anger, intimidation, disparagement, and shame.

The antidote to negative emotion is showing recognition and appreciation for the real accomplishments of those on the team.  It also helps to handle conflict correctly—keeping in mind the value of the other person.  A balance must be maintained between honesty (you need to improve) and appreciation (you’re doing great in some areas).

As you might imagine, it is difficult to promote a healthy emotional environment in your recruiting message because it has to be felt and experienced to know it’s there.  But, that doesn’t mean it’s not important.  If your team operates in a negative emotional environment, you’ll be swimming upstream on everything else you’re doing to attract high quality individuals.

3.  Mental.  As human beings, our attention is under siege.  There is an inverse relationship between the increasing volume of information available to us and our ability to prioritize and make sense of it.

Take email for example.  How many emails do you get a day that don’t contribute to something meaningful you’re trying to accomplish?  And, how often do you respond to the little “ding” letting you know that an email or text message has arrived?  Each of those events is an interruption to your focused attention.

Here’s something you may not know:  Most corporate environments promote distraction and fragmented thinking.  This “status quo” is a major source of irritation and dissatisfaction among many people who work in traditional jobs.  Is it possible for you to create a work environment where distractions are limited?

There are some small things that you can do on your team to change this dynamic.  For example, clarify what timeframe people are expected to respond to email, ban email during meetings, encourage firm start and stop times for meetings, and encourage intermittent rest and renewal during the day.

If you can create a work environment where agents are allowed (and even expected) to work uninterrupted with focused attention on high-return tasks, you’ll be offering something that is valued by many talented people.  And, it’s something that can be easily promoted in a recruiting message.

I know that much of what I’ve discussed above would require some cultural changes to your organizations.  Changing ourselves in hard enough, and changing a company’s culture is even more difficult!  With that said, I encourage you to not shy away from the difficult things.  The challenges that the real estate industry faces are significant.  Some drastic retooling may be needed to continue to compete.

---

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.

Competitive Advantage: Creating an Environment Where Your Agents Will Find Engagement—Part 3

Last week (1,2), I suggested that you will need to become proficient at competing for new talented agents in the months and years ahead.  Your competitors are not so much other real estate companies, rather, they are other traditional companies who have a difficult time offering work environments that employees find engaging. This is a major competitive advantage that very few real estate companies use to their advantage.

As we discuss this topic, the elephant in the room that I know many of you are thinking about is traditional pay and benefits — Most “normal” companies offer this nicety, while most real estate companies do not.  Granted, 78% of the global workforce is dissatisfied or disengaged in their jobs, but at least they are getting a paycheck!

For years, real estate companies have chided people for this behavior.  In fact, I can think of numerous discussions with owners and managers where candidates were mocked (typically behind their backs) for not having the “guts” to step out of their comfort zone and assume the risks of full commission work in the real estate industry. 

This bravado attracts some when the risk to reward ratio is in balance, but as the “reward” part of equation has started to diminish and become significantly less probable, the “make it big in real estate” engine that drives recruiting success has stalled.  The traditional real estate compensation paradigm is on life support and the prognosis for future success is not good.  It has obviously been strained because of economic circumstances in the last couple of years, but there is also a generational component that is adding to its demise.

Here’s the generational component that most real estate companies are missing:

Many young people are willing to exchange a high income (or the potential at earning a high income) for job opportunities that offer flexibility, mental/social engagement, adventure, and a little bit of security. 

Let me share a story that illustrates how this reality is playing itself out in industry today.  A few weeks ago, I met with the general manager of a large auto dealer on the east coast.  During the discussion, I asked him how their recruiting process has changed in the last couple of years.  To my surprise, here’s what he said:

"We used to have a lot of success with offering people a way to make $200K per year if they were willing to work 80 to 90 hour weeks.  We have a sales formula that reliably produces this level of income if a person has a reasonable amount of sales talent and is willing to put in this level of effort.

Problem is…no one wants to do the work anymore!  I can’t get young people to engage this value proposition.  They’ll often say, 'How about you give me a way to earn $40K a year, and I’ll put in 30 hours per week.  I only need $40K because my girlfriend earns about that much and that’s enough money.  I don’t want to give up my personal activities and flexibility for more money.' "

This general manager went on to confirm that this happens so frequently that he has given up trying to hire the $200K producers.  Instead, he hires more of the $40K producers (which he probably earns better margins on).  He has learned to embrace the generational trend, rather than putting energy into trying to recruit the increasingly few people who match his previous hiring framework.

This is not an isolated case.  I’ve seen this trend mentioned and documented in numerous research studies and articles I’ve read over the last five years.  Many projected that difficult economic times would reverse this trend, but it hasn’t happened.

So, how can you make changes to the way you hire in order to align yourself with this generational trend?  Here are some ideas.

1. Highlight flexibility in your hiring value proposition.  It’s not uncommon to see real estate companies highlight flexible hours and work conditions in recruitment ads, but it is usually alongside phrases such as “Unlimited Earning Potential!” and “Be Your Own Boss!”  If candidates are skeptical about any portion of the recruiting message, they discount it all.  It is more effective to construct ads that convey nothing but flexibility.  If you need to say something more, talk about how highly efficient and competent individuals thrive in a flexible work environment.
2. Replace the “all or nothing” compensation framework with something that offers a small amount of security.  I know that I’m treading on sacred ground by mentioning this, but it is worth putting some thought into this idea.  The auto dealer example demonstrates this principle:  Many very talented people will exchange money (i.e. work for much less than they can get working for other employers) for flexibility.  But, when you also ask them to take all the risk in the employment arrangement (full commission), it becomes too much.  I believe it is worth investigating a modified employment model where a modest commitment (such as $2,500) is made to a talented prospective agent with the expectation of receiving a return on that investment.
3. Learn how to truly offer engagement and adventure as an organization.  This is where things get really exciting because most traditional companies and teams are not adept at addressing this issue.  I’ll elaborate on this topic and wrap up this series in my next discussion.  

---

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.