As many of you know, our company’s core business is helping our clients source high-quality candidates for difficult-to-fill positions. While we assist companies in several different industries, much of our focus has been on the hiring difficulties real estate companies experienced over the last five years.
This has not been an easy task. It is difficult to get talented individuals to consider changing careers during a recession and during the subsequent recovery.
Employment Stagnation
This may seem counter-intuitive, but pervasive high unemployment and lousy job prospects in the economy create stagnation in sourcing and hiring for real estate companies.
On the surface, you might surmise that if there is a large
number of people who are unemployed (some of whom are talented individuals), a
fair number of them might be willing to give real estate a try. Our sourcing data doesn’t support this
hypothesis.
In reality, most people who find themselves unemployed are not in a strong enough financial position to start a real estate career. Instead, they pursue the quickest path to a steady paycheck.
But, what about the people who are in low-paying, dead-end jobs? Certainly, some of those individuals would be willing to look at the real estate industry as a way of “upgrading” their career…right? Our sourcing data doesn’t support this hypothesis either.
Many people who are underemployed are thankful just to have a job. They don’t feel comfortable taking a risk that would put their current financial situation in jeopardy. The proverbial “bird in the hand” is good enough for them.
What’s Changing?
So, what’s changing? Why are candidate sourcing metrics starting to improve so dramatically in the last 3 months?
I believe there are two reasons for this change. First, the real estate market has improved in many areas of the country. The national media has picked up on these changes and started to report positive news. Candidates perceive this change and are now more open to considering real estate as a career option.
While positive reports help, most of the momentum is being created outside the real estate industry. It is related to how average employees in non-real estate companies feel about voluntarily leaving their jobs.
The data for this theory is buried in the metrics that are tracked by the Bureau of Labor Statistics. It was recently highlighted in an article written by Vivian Giang at Business Insider:
“People are voluntarily quitting their jobs at the highest rate since the pre-recession era, according to the Job Openings and Labor Turnover Survey — known as JOLTS — published by The Bureau of Labor Statistics.
The report says that 2.16 million people quit their jobs in the latest data, which represents 53 percent of all job separations — this includes quits, layoffs and discharges — when accounting for retirees.
The graph below, published by Gluskin Sheff Research, illustrates the trend in the quitting rate and the number of people who have quit as a percentage compared to the total number of people employed in the past decade:
So what does this mean about our labor market? In short, it's an indication that people are confident that they can find other opportunities elsewhere and is a sign of sustained improvement in the labor markets…. This confidence happens when the economy grows fast enough…and people have [enough] faith in their own skills to make a living some other way rather than stay in a job they're not satisfied with.
So who are these workers? There's a good possibility that people are leaving their jobs to pursue freelancing, consulting or the entrepreneur route. This need to work for yourself is predicted to reach 40 percent of the American workforce by 2020, and is most common in sectors of the economy that are growing.”
As you can tell, much of what goes on in the labor market is out of our control. When a positive trend happens (and in this case, two positive trends), it is important to take advantage of the rising tide.
When engaging “new to real estate” candidates, now is not the time be on the sidelines. Develop and deploy strategies for engaging the millions of individuals who are finally starting to feel less risk-averse about their careers.
Question: What strategies are you deploying to engage the 40% of the American workforce who lean towards working independently?
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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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