No real estate brokerage can succeed without real estate agents. This only means that you should put more effort into your recruitment efforts, if you haven’t already. Otherwise, you’ll have a severe lack of talent in your team and you won’t be able to reach your business goals.
That said, it’s not only recruitment that’s important to growing your brokerage; retention is also as important, if not even more so. Fortunately, thanks in large part to technology, both recruitment and retention have been made a little easier. Modern real estate brokerages now have access to software like Brokerkit recruiting and retention CRM, which comes with features that help accelerate and sustain growth.
Suffice it to say that if you’re only investing in real estate recruitment, then you aren’t using your resources wisely. Here are some reasons you need to focus on your retention strategies as much as you pour your resources on recruitment:
Hiring a New Employee Is Expensive
There isn’t an exact figure, but hiring new employees is much more expensive than retaining them. For entry-level positions, the cost can be about 50% more than the employee’s salary. For more senior positions, the cost can balloon up to 200%.
Aside from monetary costs, other expenses can also add up after a real estate agent leaves your brokerage for whatever reason. For one, you’ll suffer productivity losses (more on this in the next section). A high churn rate can also affect morale. In short, you’ll have more to gain if you spend time developing strategies on how you can make real estate agents stay rather than just how to reel them in.
Retention Boosts Productivity
As mentioned earlier, your brokerage’s productivity takes a dip whenever an agent leaves. For one, you’ll be understaffed until you can hire someone. Then, there’s also an adjustment period before the new employee reaches the same level of productivity as the one whole left. Then there’s also the concern of social connections, both with clients and with fellow real estate agents. Obviously, it will take people some time to warm up to the new hire.
Of course, employee turnover is an inevitable part of any business. Nevertheless, if you can increase the number of real estate agents that you retain, you can save your brokerage about 1 to 2 years of productivity loss.
Recruitment Is More Difficult In an Applicant’s Market
At the time of writing, the job market is an applicant’s market. This means that top-tier candidates can freely choose an employer to work for. This makes it more challenging for your brokerage to stand out from the competition, especially if you’re going against bigger companies with possibly more to offer. Ultimately, you might spend more than your usual budget just to hire a couple of new real estate agents.
With a sound retention program, you won’t need to worry as much. If your real estate agents don’t leave, then there’s no need to replace them. (Of course, this doesn’t mean that you shouldn’t polish your recruitment strategies because you definitely should!)
Retention Can Better Cultivate Company Culture
When your brokerage has a revolving door of real estate agents, it can be difficult to uphold and cultivate your company culture. In fact, when employees come and go frequently, you may not even have the chance to share and inculcate your values. It can also affect the loyalty of your other employees; at the very least, they’ll wonder why people keep on leaving.
When you put in enough focus on your retention programs, on the other hand, you can continue to strengthen your brokerage’s culture and character.
Retention Can Actually Help You Recruit More Agents
One of the results of a robust retention program is high morale in the workplace. When your employees are happy and motivated, they can serve as passive recruitment tools for your brokerage. Just imagine what outsiders and potential candidates might think. Why are the real estate agents in that brokerage so much happier than others? Why do they stay there for years? The curiosity alone can work wonders for your application rates!
In addition, happy employees are more than willing to share what they’re experiencing. They can refer quality candidates, who in the future can also join the ranks of your most productive employees. In short, if you want to hire new talent, you need to find reasons for your current roster of real estate agents to stay.
Now that you know how important retention is for your recruitment program, it’s time to develop one or improve what your brokerage currently has. Invest in employee wellness and benefits, including an ample paid leave package, a competitive commission structure, and flexible work schedules. When your employees know that they’ll have a healthy work-life balance with your brokerage, they’re less likely to leave.
You should also consider conducting exit interviews with employees when they leave. This can give you an idea about which aspects you can still improve on. Finally, be transparent. Open your doors and welcome conversation. You’re not a mind reader so ask your employees what they need and encourage them to approach you if they have concerns.
Good luck and more power to your brokerage!