From Rolex watches, to yacht parties or the lure of swanky new offices, there’s endless incentives tempting brokers to join the “next best” real estate team.
Selecting an agency to work for is often a hard decision for the budding real estate recruit. Every office has its own pay structure, support systems, culture, incentives and other non-monetary attributes that make it stand out.
So how can an agency monetise its value proposition, in order to attract the best talent in the market? And what other factors can influence new agents to join, whilst retain those already employed, so a brand’s most valuable assets aren’t poached by the competition?
A Fine Line
There are thousands of real estate companies across the globe. It’s a minefield for all the newly-licensed agents, hoping to pick the right agency to earn them that million-dollar commission cheque. But the truth is, over 80% of agents don’t even make it past the two year mark. And if launching a career isn’t hard enough already, the choice of brokerage can be the difference between success and failure.
“Culture eats strategy for breakfast”
There’s about as many factors in what makes a real estate brokerage desirable as there are real estate agents. Culture undoubtedly plays a huge role. The unquantifiable advantages of a real estate agency, such as its culture, and brand values, can actually have a real impact on how successful an agent will be.
Finding a real estate brokerage with the right culture is crucial to any employee, regardless of their experience in the role. Different cultural styles will appeal to different people.
There’s the typical suited and booted type real estate agency which might attract the no-nonsense money-hungry agent. Contrast this with a more relaxed, open style agency culture, favoured by the mobile, millennial agent. Or consider the tech-driven, remote-work oriented agency, certainly a popular approach in post-covid times.
Spoilt for choice
One thing’s for sure, both the recruits and the recruiters wont be short of choice. New real estate agencies are popping up almost as quickly as your neighbourhood SOLD boards, in the hope of capitalising on the hottest property market we’ve seen in decades. Entrepreneurs, investors and brokers of all experience levels, are branching out, in search of a bigger slice of the pie. And with covid-19 creating worldwide job losses, many people are turning to real estate as an enticing new career path.
But employment packages and payment structures differ widely. From full-service brokerages to 100% commission companies. And without brand reputation on their side, some newer firms are focusing on the commission split as a method of luring in candidates.
Did someone say commission?
Many brokers work on a commission-only basis, meaning earning potential is uncapped. This is wonderfully attractive when times are good. And given the state of the post-pandemic property market, most brokers are taking home healthier commissions than ever before. But when the market is down, spirits can follow.
Some companies do pay agents a minimum guaranteed salary, as employees rather than independent contractors. And this can have its appeal. But most still have a commission element, where earnings will change depending on success and productivity.
Do the maths
Whatever the model, agencies need to be able to monetarily contrast and compare it to those of their competitors. Clearly showing agents that affiliating with your brand is in their best financial interest will have impact, so do the maths and make it count. Some of the numbers (e.g. agent commissions on “x” amount of gross commissionable income (GCI) or units) will be relatively easy to calculate, while others will require some estimating.
Real estate professionals may also regularly be charged ad-hoc fees. For example this could be admin support, lead generation, signs, etc. So this is also worth considering in your pitch, if these factors can be offered as incentives.
Non-monetary items are the tricky part, but a critical element of any brokerage comparison. For example, what is a brokerage firm worth to the agent’s business? What are their chances of generating more transactions with you versus another company?
Heart or Head?
If you’re an agency owner, your pitch must quantify the value of the agent’s affiliation with your brand, and monetise your value proposition. But don’t underestimate the unquantifiable advantages of a company. The look and feel of the physical office. The “type” of brokers that may dominate the workforce. The company website or even the style of its logo, can impact a final decision.
While the metric comparisons are used to make the monetary case for this mutual affiliation, the “soft” advantages often act as deciding factors for a potential recruit. So, depending on the type of broker you want in your line up, be ready to tailor your pitch accordingly.
Of course, there’s no exact science behind it. At the end of the day, gut instinct often overrides logic, with heart ruling over head. But the way in which any person feels valued in the workplace, as well as the monetary (and non-monetary) rewards, plays a huge part in everyday employee mindset. And if a business wants a truly productive workforce, it pays to keep its people genuinely happy.
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