In these challenging market conditions, how do you create an estate agency recruitment strategy to help maintain growth, profits and market share?
Andrew Deverell-Smith, CEO of Deverell Smith gives his advice…
“Due to a combination of challenging external factors, some agents are experiencing a 40-50% drop in transaction volumes, which naturally affects morale and directly impacts their staffing volumes. The overarching message today is that estate agency businesses need to be flexible and adaptable when it comes to employment strategy.
“There has been a big migration of very capable people leaving the industry with concerns of future proofing and stability. Whilst we have tried to encourage as many as possible to move horizontally within the sector, with many successfully doing so, there are some who have simply opted to embark on a new career elsewhere.
“We have also witnessed a significant flight from traditional agencies to online agency brands, as good quality job seekers are attracted by the forward-thinking, progressive nature of the brands along with their ambitious growth aspirations. The reality is that these large, online agents are here to stay and, in my view, they are only going to get better and more sophisticated.”
“The key tactic is to focus on keeping your best talent. There are several ways you can do this; start by ensuring there is fluidity for this top talent by looking at their individual progression routes and finding out what their individual aspirations and needs are. Today’s millennial workers are driven by much more than a good salary – they crave a better work/life balance, prefer working in teams and seek personal fulfillment from their job.”
“It is also wise to lose the negativity – you might have staff who perform well and are your top billers, but who inadvertently have a negative impact on other team members through their attitude. Whilst they may bring in good money, they could be costing your business in productivity, morale and relationships, which could prove more damaging to your business in the long term.”
“In adverse market conditions it always begs the question; how much were agents actually having to sell as opposed to simply reacting to interest when times were good? If the average age of a London estate agent is thirty, then most haven’t known anything but a good market and can therefore find themselves struggling when conditions turn tough. For that reason, many are choosing to give up and leave the industry.
“As a result, there are strong reasons to consider candidates who have experience in a more challenging marketplace. Many of those who have less than two years’ experience have only ever known the market as a hard sell environment and have essentially learnt their craft under difficult conditions. The same applies for what we call ‘career agents’, those with thirty plus years of experience who have witnessed the full spectrum of the market, good and bad.
“What we are essentially seeing is a flushing out of the mediocre and less capable agents, who do not have the skill set to generate revenue in these conditions, and a new type of candidate entering the sector; fresh talent that is hungry for a challenge who only knows the market as it is now and are coming in with a new mindset and positive attitude.
“We are also working with lots of forward-thinking agencies, helping them to hire ambitious, digital marketing talents from outside of the industry. Digital marketing is proving key, as is hiring the right people. For fee earners, possessing previous market experience is proving much less relevant than having the right attitude and motivation to do the job. Conditions will continue to change; they never really stand still. It’s having the right mindset and approach that is proving invaluable now.”
“Through our interaction with a multitude of different agencies, it is very evident which ones have strong leadership and which ones don’t. Those with motivated teams provide clarity of plan, focus and drive energy right the way through the business. With most firms facing the same market conditions, it is surprising how different the approach can be from one firm to the next. Those that are open, honest and share their medium-term strategy with team members are proving much more successful than those who are only focusing on the week ahead.
“If staff understand what the bigger picture is then they are often more engaged and better prepared for the road ahead. “
“It’s no surprise that people represent the largest expense to an agency and, as such, we are seeing many firms thinking more creatively around their fixed staffing costs and adopting different models from what we may traditionally be used to – never have I seen such a variety of compensation plans and employment structures. There is the old school way of being employed with a salary plus commission, a new school way of being self-employed with much bigger commission percentages and any number of hybrid models in between.
“We are also seeing an upward trend for flexible working in Estate Agency; employers are breaking away from the traditional 9 to 5 and affording their staff the freedom to complete their work at the times of day that will enable them to get the deals closed and across the line. This is serving the needs of the employees’ work/life balance, which is positively impacting retention levels, whilst providing a more responsive service to clients. Businesses need to be able to respond to changing market conditions and a level of flexible staffing enables them to do that.
“We also encourage our clients to leverage technology – not just for property sales but in terms of fluidly managing their staff and getting them in front of customers.”
“As the market conditions have evolved, we are looking at the whole recruitment and talent picture for small business estate agencies more than ever.
“We appreciate that these smaller businesses are being challenged from all directions and that cashflow is tight so we are creating much more non-traditional models around how we can charge our clients. We have performance-related fee agreements and monthly retainers, rather than big upfront fees that will only put extra pressure on their finances. More than ever we are offering a strategic partnership approach, which is helping many of our clients to thrive in tough conditions. And regardless of whether you are online or offline, it’s about the calibre of your team.”