Let’s face it. As a broker, your number one job is recruiting agents. Anyone who says otherwise doesn’t understand this business. Our industry has an agent churn of 40%. In other words, 40% of your agents will change brokerages this year. If it’s less than that, you’re doing well. And if you don’t continue to recruit, it is just a matter of time before you have no agents.
So, as a broker, which agents do you target? Many brokers focus on recruiting top producers. I don’t. I recruit agents at every level, and here’s why. I want my business to be like McDonald’s. I don’t want to depend on the best agents to produce my income. The fact is that I make a higher gross margin from my lower producing agents.
Think about building a stock portfolio. You want diversification. Why? So no individual stock’s performance will impact your income. As a broker, my thinking is the same. If my income is tied to 70 average agents, I can predict my revenue. On the other hand, if it is tied to a small group of top producers, if one were to leave me, my income might change drastically.
Here is another reason. Who are the most recruited agents in our industry? That’s right. The top producers. On the other hand, who is nobody recruiting? The average producers. I focus on recruiting all the agents in my market. Sure, I love top producers, but I am happy with them all. Medium producers pay me a higher split and are not in high demand, so I love to recruit them.
Now, if you are the broker or owner of a Re/Max franchise, then go for the top producers. After all, your model needs agents who can afford to pay your rent every month. But if you run a typical brokerage, focus on recruiting regular agents — average producers — and you will do well. The key is having lots of average producers and not a few super-stars. That way your business is not in the hands of just a few agents. The diversification will keep your brokerage making consistent money.
Now let’s discuss how to recruit them. I believe that recruiting agents comes down to having a a compelling value proposition for agents. I’ve found three things that help me to recruit and retain agents. OK, maybe four. Here they are: money, business, training, and time.
Money. You probably remember the movie, Jerry McGuire. Here’s one of my favorite clips from that movie.
Why do agents work? For their health? Nope. For the fun of it? Nope. To help their fellow man? Nope. Sure, all of us want to do something that’s fun and that has a good value to society, but the bottom line is we all work for money. Pay your agents well, and use the same pay-plan for everyone and you will have no problem recruiting agents.
I pay all my agents a minimum commission split of 80%. And any of my agents can make 90% by by being either a top-producer (in other words by doing 4 deals a month) or by being a top-recruiter (in other words, by bringing 5 other agents to the company). We don’t charge them any rent, any transaction fees, any office fees, any fax fees, copy fees, phone fees, network fees, paper-clip or stapler fees, admin fees — no nickle and dime fees, period. Some brokers are so penny wise they are dollar foolish. The bible said it well: “Don’t muzzle an ox while it is threshing your grain.”
Business. Our company recently conducted a survey of nearly a million real estate agents, nationwide. You might have participated. The number one concern facing agents today is not enough business. Help your agents solve that problem and you will have no problem recruiting. If the number one pain point is no customers, ease their pain and agents will be happy to come work with you.
I personally provide all our agents with a technology package that costs $1,100 per month, per agent. It is the single most powerful bundle of lead capture and agent productivity tools available anywhere, at any price, and my agents get it free. One thing an agent in my company can never say is, “I don’t have any business.” If they don’t have any business, it’s because they choose to use old-school marketing methods instead of using the state-of-the-art tools we provide them.
Training. Remember that old song by Crosby, Stills, Nash, and Young: Teach Your Children Well? The same goes for agents. If you want to recruit and retain agents, it’s important to train them. I can tell you that one of the best tools I’ve found for recruiting agents is training. Today, many agents are struggling, and they want to learn to be successful. Most agents are looking for someone to lead them. So lead them and they will follow.
Time. Think about this: as an agent, the only thing an agent has to sell is his time. Sure, skill is important, but to earn money, an agent has to spend his time with a client. There are only 24 hours in a day. The less hours available to the agent, the less the opportunity to spend with clients, and ultimately, to earn.
Yet I’ve seen many brokers, who are probably trying to justify their employment, waste between half a day and a full day every week in non-income producing activities for their agents. Sales meetings (which oddly enough are never about sales), caravans, floor duty, open houses, sitting model homes, needless meetings, and many other time-wasters are a staple in today’s real estate brokerages.
It’s no wonder our agents are doing less business than ever before. If you want to recruit and retain agents, quit wasting their valuable time. It’s the only thing they have to sell.
Well, that’s my philosophy on recruiting and retaining agents. If you think about it, it’s really not that hard when you break it down to the basics. Don’t focus on top-producers. Pay them well, help them find business, train them, and don’t waste their time, and you’ll have a large and prosperous brokerage, even while many are closing. And that’s my quick answer.