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What
an exciting time for recruiting!! I predict that the changes that are about to
take place over the next 5-10 years in this industry will dramatically change
the market position of real estate firms all across America. There are
opportunities out there right now that have never been there before, and may
never be there again. For many brokers out there it will be the opportunity they
have been waiting for that will take them to the top, and those who are caught
off guard, could find themselves losing millions of dollars in marketshare, in a
very short period of time. What
are those changes? NAR has released some very interesting statistics lately: NAR
predicts that 50% of the agents, who are practicing real estate today, will
leave the business over the next 5-10 years. Why? Many think its technology. And even though, to a degree it may be
technology, the #1 reason that I believe we will see agents leaving the business
is age. Look at these statistics. Median
age of today's Realtor© is 54. Highest ever! Average
age of the successful broker is 56 67%
of brokers are 52+ years old 46%
are 60+ years old 54%
of Realtors© surveyed plan to retire between 55-70. We
Are There What
does that mean to you? I think it creates a wonderful recruiting opportunity
that has never existed, and may never happen again. The
baby boomer generation of Realtors© is about to retire. Thousands of
very successful Realtors© who are currently earning 6 digit incomes, and
selling millions of dollars of real estate will soon be leaving the industry.
When they retire, that business is going to get dumped back into the general
real estate pool of properties for other agents to pick up. A new breed of agent
is already entering the market place, and you, the brokers need to get ready. First,
let's take a look at how it will impact the current companies in the
marketplace. Let's say that a
fairly large company loses 10 good
agents in one year with an average production of 5 million each. That is 50
million in business that gets lost in a single year!! That same company needs to
recruit existing agents who are currently handling 50 million in business just
to stay the same. Many of these companies have focused on hiring new agents in
the past. Those companies will soon begin to see that without a focus on hiring
the existing agents, as well, they will begin to lose their market position.
In
fact, any company who consistently loses millions of dollars in business each
year, without replacing it, will
begin to drop in market share, and ultimately go out of business. I am already
hearing stories of large firms, who are concerned because they recruited the
same number of agents this year as they lost, but their market share is
slipping, and they are losing money. Why? This business is no longer a numbers
game. There was a time when you could replace what you lost and be OK. That is
not necessarily the case any more. Now, you need to track the production of the
agents that you lose, and compare it to the production of those who you are
hiring. I
am not saying that the new agents are not important, but the closed production
of a new agent in their first year is not always that great. So, what should you
do? On a quarterly basis, you should look at whom you lose, and compare it to
those that you hired. Take the production of those you lost and total it up.
Then add up the production of the agents that you recruited, and look at their
production. With new agents, you need to wait until they have closed production
to begin counting it against your loss. Are
you moving forward in the marketplace, or are you losing ground? If you are
losing ground, then you must focus on the recruitment of existing agents. How
vulnerable are you as a company?
Look at the current agents that you have. What percentage of your top quartile
are 50 years old, or older? How productive are your new agents in their first
year? What systems do you as companies have in place to recapture that business
as they retire? The companies that position themselves now, with a plan to
capture and recapture their market share will come out the winners over the next
5-10 years. But
you must start now. As you know, effective and consistent recruiting
is just like farming. Why Farming? Farming is the best way to maintain
contact with a large group of agents and to insure that when they become unhappy
with their current broker, and decide to make a move, you're the one they think about. You need to educate them
about your systems, your opportunities, and how you can take their career to the
next level. You need to talk to the agents on your hit list on a regular basis.
My recommendation is one hour of calling, three days per week. You should
conduct 2-3 interviews per week to hire an average of 2-4 agents per month. You also need a system that allows your retiring agents to retire, and
to allow them to collect a royalty on their business. This is the key to
recapturing your business. Keep in mind that any company that is not prepared to
capture the business of their retiring agents could find themselves in a very
vulnerable position, which would make it far easier to recruit additional
agents. Each situation is unique however. For information on how to set up a
system that allows agents to Retire
with a royalty in your office, call me a call. |
