As an industry we frankly do a mediocre job of recruiting. We rarely position ourselves and our companies as a first choice employment opportunity for college graduates or others seeking employment in the early development of their career. We have hired mangers and told them they need to recruit but rarely support such efforts either with capital, training or high priority. Consequently at the end of the month or year we complain and criticize that we are not doing a good enough job in recruiting.

Our managers have become overburdened in trying to stay in tune with changes in legal issues effecting our business, risk management, satisfying the plethora of questions from agents, handling customer service, managing staff and attempting to satisfy ownership that ancillary services are promoted to offset the declining company dollar. When production does not increase and company dollar continues to shrink we look to the manager as the “fall guy” the same way that major league baseball looks to the manager for not making the playoffs.

Two recent interesting pieces of data materialized from the recent Top Performing Office Study published this past month for RealTrends. First was the fact that the average Top Performing Office recruited a net of 7 agents for the preceding year which for an office of 70 agents amounted to a 10% gain; and second, that the amount spent for the year on recruiting amounted to less than .22% of gross commission income, a fraction of what we spent on technology, advertising and other large office expenditures.

Considering the fact that the National Association of Realtors has about a 10% turnover in membership each year adding 10% to the office seems a small gain….especially for Top Performing Offices. The fact that so little is spent on recruiting speaks for the commitment we have for this important function.

The 2nd Annual Compensation Study for Real Estate completed last summer on behalf of RealTrends reported that there were few full time recruiters in the business and if there were they were employed only in companies of 400 agents or more. Does this mean that all companies of 400 agents or less treat recruiting as a minor function falling either to the managers and/or others in the company?

Is there really any one of us with offices completely full? Managers may tell us that they are full but production statistics do not bear this out. Perhaps managers are simply comfortable with where they are, or they are not educated in the benefits of recruiting, or they have never seen recruiting as a priority nor has it really been made a one by themselves or management. As a small solution for the recruiting effort over the years we have been paying agents to recruit. This rarely solves anything when the agent is supposed to be listing and selling real estate.

College campuses have for years had recruiting at certain times of the year for businesses like banking, accounting, law, engineering, healthcare, education, pharmaceuticals and many more. Where has the real estate industry been? Our websites do not even do an adequate job of linking inquiries to someone capable of answering questions or presenting our business as a viable first choice.

The problem lies with us as broker/owners and managers/teachers/developers of people. We have come to believe that our business is not necessarily a first choice, that it takes too long to become successful and profitable. We have not educated ourselves let alone our managers into the importance of adding to the service base of our population for profit growth and the amount of money we have spent on this has been miniscule. Instead we re-cycle agents and offer higher commissions to dilute our company dollar… even if the veteran is a mediocre producer.

Granted, professional sports have their drafts and there are specific contracts with the players but in the end all are looking to the fresh face that is going to make the team of the future. Now, this is not an indictment of the seasoned veteran! It is saying though that we certainly need to do more to compete for talented, energetic, younger, educated and technically competent people who can create the future of our companies while remaining profitable. We need to change our thought process. We need to shift the paradigm.

So what are some steps we might take to engage in a long term change in how we are going to grow our companies?

1. First is the thought that what we are going to do is not a “fix” for the short term but rather a long term change to remake our companies. If the national statistics are to be believed the average real estate agent is at least one full generation older than the average buyer. We are not going to change that overnight but we can effect some gradual growth changes that can close the gap over time.
2. We need to get a handle on our market. What is the age and education and earning capacity of our buyers and sellers? We probably can develop a pretty good profile of the market both for our sellers, buyers and transferees. If we could describe the ideal office and the human resources we need in the future to meet the needs of the existing marketplace what would it be? We should create a written descriptive vision of what we want the office to be including the retained company dollar.
3. Now, what about our existing current offices? Do we have a census of who works for us? Do we know their educational background, age, experience, earnings, interests,background and other factors. We need to do a census and at least annually update it. What commissions are being paid and what did that person generate over the past 2-3 years in retained company dollar? Do the agents have a laptop and are they competent in using it? Do the agents support and use company related services and if so, which ones? Yes, Tampa Bay may have won the Super Bowl but they are already assessing what positions they need to fill in the coming year to sustain a winning season and achieve their plans. If we want to get to a specific destination then we need to know our starting point. It seems logical that we ought to complete a census in order to know where we are today and what we have to do to meet tomorrow’s plan.
4. We need to re-educate our managers in why recruiting is so important. They need to be trained in how to interview and select, market and advertise for positions. They need to know the dollars and cents in recruiting with an understanding in how they can shift the decline in retained company dollar and they need to be educated in how to coach agents to achieve results. This is a process that can not be accomplished in a short time but rather we need to invest in the long term with our managers in order to achieve long term results.
5. Consider that a full or part time recruiter trained and committed to supplementing what your company is already doing can accelerate the time line in achieving your long term recruiting goals. This is not to say that such a person replaces what the managers are already doing but rather can serve as a conduit for generating more contacts, conducting first interviews, follow up with your growing data base of contacts and direct truly serious recruits toward your own pre-license programs and greatly assist in growing your company.
   For example, one company hired their first recruiter in early 2002. By the end of the year that person had recruited 89 new agents to the company, recruited 105 people to the pre-license school, recruited 2 loan officers to the mortgage company and has an ongoing contact list of 475. In the first month of this year she recruited 9 new agents to the company and 32 individuals to the pre-license program. This company grew it’s agent base by 26% in the past year and not through acquisitions. It should be noted as well that most are under the age of 30 and have a college education. A paradigm shift? Most probably. A good return on investment? Absolutely.

If, as the data point out, per person productivity is not increasing over the past 6 years since the advent of the internet and other technology then perhaps the reason is not the technology but the people. As a service related industry it is the people that provide the service and we ought to realize that we need to invest capital in training and building our management programs and a way to grow our companies to achieve the desired plan for the future. Let’s start with the way we create and develop a recruiting program and what we can do to teach and train our managers.