Recruiting and retaining talented agents is the most challenging part of the real estate manager’s job. How do I know that? The data in the WorkPuzzle survey was most clear on this topic.
There was large consensus that the top priority, as communicated by owners and managing executives, for the first-level manager in real estate companies across the county, is recruiting. The second priority is retention.
However, when managers were asked what job function they perform best, only 9% said recruiting. In addition, when managers were asked what part of the job they hear the most complaints about…75% said recruiting.
Let that sink in a little bit...
In essence, what managing executives want the most, first-level managers are the worst at delivering.
This prompts two important questions: Why is this happening? ...and... How can this gap be reconciled? I’ll address both issues.
1. Why do real estate managers hate recruiting? Quite simply—it is difficult work and the results come very slow. As discussed in previous WorkPuzzle blogs, both the demographics and the economics of real estate recruiting make it increasingly difficult.
For experienced agent recruiting, the bottom 60% of the typical real estate company is either nonproductive or marginally productive. The top 20% are very difficult to dislodge because they are well-respected and making money. This leaves 20% of experienced agents who are eligible to be recruited. Due to short supply, the competition for these agents is very intense. If you are lucky enough to recruit some of these folks, they are typically acquired at low margins (ie. unfavorable splits).
For “new to real estate" recruiting, the risk-to-reward ratio that used to consistently attract new talent into the industry is no longer a compelling draw. As house values have plummeted and transaction volumes have waned, an increasing number of candidates can do the math. Starting a real estate career has significant risks and the payoff is not what is used to be.
2. How can real estate managers be successful at recruiting in spite of the obstacles? Quite honestly—there is no simple answer! This is what we spend much of our time in WorkPuzzle discussing because it’s a complex problem. So, here’s a plug to read past discussions and become an email subscriber if you haven’t already done so. With that said, here are some patterns that I’ve noticed among companies and individual managers who recruit more successfully than others.
Compartmentalization. This piece of advice is for managing executives who have the latitude to adjust workflows. If a manager’s job description requires many different roles (ex. recruiting, training, coaching, building office culture, etc.), the role that has the least amount of short-term feedback will naturally get pushed to the bottom of a person’s priorities. It takes an extremely disciplined person to overcome the inertia of human nature.
If the recruiting function (or parts of the recruiting function) is broken out as a separate role and a limited number of individuals are solely responsible for the execution of this role, the job gets done more reliably. Why? Because there are no easy, “sugary” tasks for the manager to fall back on. The new reality is the difficult job at hand—making the recruiting process work. Also, there are some managers who have more natural talent for recruiting. Letting them focus that talent without distraction is a win-win.
Focus at the task level. If your organization is not willing or able to compartmentalize the recruiting function, you may have to continue to work inside an environment with competing priorities.
If this is your reality, I would encourage you to stop looking at the recruiting part of your job from a transactional perspective. Because many managers used to be agents, there is a tendency to look at the recruiting process like a home sale. Did the transaction close or not? Do I have the listing or not? Is financing approved or not? Is this candidate going to work in my office or not?
While there is certainly a time to “ask for the order” in a recruiting discussion, the normal, day-to-day pace of the recruiting process (as a whole) moves slowly and meanders.
Managers who recruit successfully have a large number of candidates in their pipelines (so that no one candidate makes or breaks them), and they focus on completing the tasks of recruiting rather than focusing on the end result. The transaction focus shifts from, is the person hired (end result) to, is the next task in the recruiting process for this candidate complete?
I hope you’ve enjoyed gaining some perspective on how your peers view the challenges of being a real estate manager. It’s a tough job and many of you could use the encouragement.
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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