Managing the Human Assets in Your Real Estate Company
Every one I know, who manages a sales organization, is focused on recruiting, which is a good thing. Recruiting is the lifeblood of building any company, but doing what is required to keep the good people you have is just as important.
Recruiting new people is important because everyone you currently have on staff will leave you. That is not a scare tactic, rather it is a “truism” in the very real sense. Some will leave because they get recruited by others, some because they are bored. Some will relocate and others will retire or die and many will just decide they have had all they want in this job and seek another field.
That is real world.
So yes, I am an advocate of having a well defined, planned and supported recruiting plan in place, but having said that I would also like to suggest that a huge part of building a successful company needs to address the issue of re-recruiting and managing the current staff, which are the human assets of your company.
What Can Happen
Years ago, in the real estate business, there was a company that changed the way the real estate business worked because they recognized a major flaw in how the traditional Broker/Owner and Manager were handling their sales staff. Obviously, I will not use or refer to company names or logos, but I think you will get the message without the need to provide that information.
The wedge that this new player discovered was inherent in the business practice of the more traditional business model. That model treated every agent about the same and management set the standard for how commission income was split. Top producing agents were paid mostly on performance incentives. No problem with that approach. The problem was with what management failed to do as a part of the process of managing their egos and the sales organization that made up for the balance of the staff. The new player used this insight of the status quo to launch a new business model, which was very successful.
What they did was approach the top level producers and create a level of doubt in their minds. They asked questions like
- Does your Manager appreciate you?
- Are you loosing business because your Manager allows other sales people, not as good as you to handle calls?
- Are you working with winners?
The alternative was simple, invite them to join a team where only top producing sales people would be housed and where the majority of the commission would be paid to them. History records the result. It worked.
The lesson learned is clear. Management needs to pay attention to what is going on with competitive choices and make certain that attention is given to managing the human assets within their own environment. Here are five things to make sure you are meeting that challenge
- Replace the Bottom Quartile
- Pay For Performance
- Manage Individuals, not a team
- Hold Them Accountable
Let's take a look at each of these keys and examine a little closer.
Sales Associates who have proven that they have the capacity to be successful in the real estate business are a valuable asset and your job is to make sure you have created an environment in which they can prosper. By helping them reach their goals and objectives it is almost impossible for you not to achieve your own.
Other company’s are always on the look out for “winners” and there is a whole industry that has been built on how to approach and recruit existing agents. Don’t make the mistake of ignoring the process and make time to acknowledge performance and success. When you hired people, you made it a point to sell the benefits of working with your company, make sure you continue with the process. If you are not meeting with your people, one on one each quarter you are at risk.
Replace the bottom Quartile
Even though the desks are filled, don’t stop recruiting. Top agents want to know that you are focused on bringing quality people to the company. If you allow non-productive agents to linger one thing is certain, your better agents will leave you. By continuing to replace people who are not meeting your expectations you are continually raising the bar for meeting standards and expectations. Nothing is more important.
The single greatest reason that agents in your top quartile are susceptible to be recruited by your competition is that you allow those who live in the bottom quartile to stay in play.
Pay for Performance
However you structure your compensation plan, it is important to reward top producing agents for their success. Agents who invest their time, effort and money in producing business for your company are worth the money. Agents who only produce on business opportunity’s that you create through your effort and expense are not the same, so care needs to be given on how to structure and manage the system.
Constructing a compensation program that recognizes the difference between company generated business and business that a sales associate creates within your business is not that difficult to achieve. It will pay dividends for you and the people you want to keep on your team.
Manage individuals, not teams.
Without getting into too much detail, let me suggest that beyond making money, each member of your sales team have different needs, wants and desires. It is your job, as a manager to know what those are and how to use what you know to provide motivation and leadership. It might be as simple as knowing what a person’s favorite candy is, so when they do something well you can leave a personal note and “their favorite” sweet on the desk to acknowledge performance and say thanks for being here!
Too often managers believe that motivating people can be accomplished at the sales meeting or attempting to rally the staff with incentives and contests. All of these elements have a purpose, but are not the way to maximize results.
Focus on helping each individual reach their fullest potential and the results will follow.
Hold them accountable
Probably the greatest challenge in managing real estate sales people is learning how to help agents define and create a business plan. The simple approach comes with the understanding that you need to start helping them define the end result. What is their income need? If they exceed their basic need, what will they do with the extra money? Why is that important?
Helping each sales associate set their goals and objectives will provide you the opportunity to understand what is important in their life and how the time they invest in working in your company can add to the accomplishment of goals that are important to them. It's more than just focusing on listings and sales, so invest the time to find out what the "whole person picture" looks like.
Once you get these questions answered you can help them create a marketing plan that will, based on averages, produce appointments. Appointments to closing ratios produce income. The number of closed sales (income) defines the goal. Easy enough, but not the manageable result where accountability comes into play. The only thing you can hold them accountable to is the activity that produces the result, so the key question,when you have it figured out, is one that needs to be asked:
“If you don’t do what we have agreed you need to do to achieve these goals…what do you want we to do’?
If they are serious about achieving their goals they will give you permission to help them stay on track and hold them accountable.
The key to have a company worth owning is to do what is required to Find and Keep good sales people. If you agree with that resolution then you are well on the way to being successful.