Some commercial real estate companies have the magic touch: They attract and retain the best and brightest brokers. Others aren't so fortunate. Maybe they hire good people, but they soon lose them to the competition. Which type is your company?
Commercial Investment Real Estate asked leaders of brokerages with reputations for recruiting, hiring, and retaining top performers to share their secrets. Their tips can help you draw the best brokers - even those independents who never thought they'd settle down with one company.
1. View all encounters as recruiting opportunities.
Successful brokerage managers understand that recruiting isn't done only when companies need to hire: It's part of day-to-day business.
Brokers are attracted - or turned off - by how you work with them in cooperative situations, says R.J. Neary, CCIM, SIOR, vice president of Investors Realty in Omaha, Neb. Approach all encounters as opportunities to draw other brokers to your company.
"You meet brokers and develop good working relationships during transactions," says W. Greg Rothman, CCIM, president and chief executive officer of RSR Realtors in Lemoyne, Pa. "Over time, if brokers see you as knowledgeable, ethical, and competent, a door is opened. We try to make [other brokers'] jobs easier and deal with them with complete fairness. If you treat competing agents as if they are part of your team, someday they might be."
These encounters also let you observe potential recruits in action, not merely in the rarefied interview atmosphere.
Sperry Van Ness, based in Irvine, Calif., has discovered that sharing listings with the entire brokerage community increases its visibility and expedites the company's growth. "We put our listings out there and share the fee," says David A. Frosh, president of the company's brokerage arm. "We don't market or pressure when sharing listings, but [brokers] become aware of us. It creates a good link."
But be advised: If each encounter is a recruiting opportunity, then each of your company's employees is a marketing representative. Word gets out if they are treated well, but it gets out even faster if they're treated poorly. Likewise, employing mediocre talent conveys a message about your company. "Brokers make the brand," Frosh says. "If you have good ones, your brand will take off."
2. Designate and train a recruiter.
Assigning recruiting functions to one person helps focus your efforts, says W. Darrow Fiedler, CCIM, CRS, GRI, regional director of Keller Williams Realty in Redondo Beach, Calif. Even if you can't devote a person full time, cultivating a recruiter/coach from within assists both recruiting and retention. If you have a strong coach, good brokers will find you, he says. "Who wouldn't want to play basketball for Phil Jackson?"
Training is crucial, he adds. For example, a team leader in each Keller Williams office takes on the recruiting function. "Specifically, we build 'black belt' team leaders. To qualify for this opportunity, the [team leader] candidate must show the desire to add value to [other employees] and achieve at the highest level. Once we find a match through the Career Visioning [testing] process, it then becomes a training issue," Fiedler says.
The company uses team leader training boot camps for candidates. "We believe that training is a career commitment to stay [on the] cutting edge and sets an example for the rest of those involved."
It still has to start with the right person; training alone doesn't make a winning broker or recruiter. "What we have found through experience is that if you have a high-minded, learning-based individual with integrity, the rest are training, coaching, and consulting issues," Fiedler says.
3. Know your company's story.
To attract like-minded brokers, you need to know your company's mission, ethics, and goals. "Decide what your company's culture is going to be and stick with it," Neary says.
Don't be tempted to adjust your company's image to land a particularly alluring top producer, he adds. In the long run, maintaining an identity pays off: You get the brokers that best fit your organization.
Having a story is a significant factor in Sperry Van Ness' growth. "In a business where everyone sounds like, 'blah blah blah,' have a story that is different," says Frosh, who has been using his organization's story to lure brokers from top companies nationwide.
In addition to articulating the story, "be able to back it up with stats," he says. For example, last October the company successfully recruited a top national broker who now serves as a senior adviser for Sperry Van Ness in Cincinnati. Since 1999, the broker had been in the top 20 percent in sales for his former company. "[The recruit] was very impressed with the Sperry Van Ness story," especially its exclusive proprietary marketing software that allows advisers to create unique marketing material, Frosh says.
4. Grow your own.
Several owners and managers have found top talent by looking beyond the immediate commercial real estate community.
"Rarely do we solicit existing brokers due to the competition it creates within the office," says Rick DeKam, CCIM, a partner at Midwest Realty Group in Portage, Mich. Instead, he recruits related-industry professionals, such as attorneys, environmental engineers, and accountants. "We look for people who have worked on the fringes of our industry."
This model is best suited for small companies, such as Midwest, where brokers typically work in teams. When the company bids on projects, each member brings a particular discipline to the team, which "often demonstrates a depth of expertise that sets our firm apart," DeKam says.
Midwest's approach requires rethinking the traditional compensation structure: DeKam generally gives recruits straight salaries for about two years before moving them to a commission basis. With ongoing mentoring and training, it can take three to five years to bring an industry outsider up to speed, he says.
However, "While I stand behind our mentoring/training process, I must admit that it does not work for everyone," DeKam says. "Since our process still provides a weekly salary and expenses, although low, candidates in the program do not have that 'do-or-die' incentive that 100 percent commissioned agents have. Therefore, we have found that you still need to identify and work with highly-motivated individuals who can see the benefits of this career path and who have a fairly high level of passion for real estate and finance."
Investors Realty follows this model successfully. "We're trying to grow our own," Neary says. Recruits from outside the industry can, if needed, receive 'survival salaries,'" he says. "We adjust the commission split until they are up and running, which is usually a year or two."
As well as expanding the potential pool, recruiting from outside the industry provides exposure to new professional networks. DeKam cites another benefit: You don't have to undo bad habits. "You get a high-caliber person who you can mold into doing business the way your company does business," he says.
5. Interview extensively and share the burden.
Recruiting a strong candidate is only the beginning. Ensuring a good match requires taking the time to dig deeply, ask questions, and tap into the expertise of the brokers in your office.
The company recruiter brings only one perspective to the hiring process. Including other brokers strengthens the team and allows you to draw on the insights of those who may be working most closely with the new recruit, according to many hiring experts.
For example, at Midwest all brokers vote to bring on a new person, DeKam says. "We also attempt to have our key personnel and brokerage agents sit in on final interviews with prospective new hires. While this can become cumbersome, it usually pays big dividends in morale and personnel longevity."
6. Use testing that reflects the job description.
Many companies use testing devices during the screening process. Each system has its advantages, but the one you use should accomplish your company's hiring goals. Developing or finding a system that helps you identify the right talent is critical, Fiedler says.
Test for the job description, not to find a clone of yourself or your company, Rothman advises. You want a match, not an identical twin.
Neary uses the Predictive Index test, which identifies candidates' natural personality strengths and weaknesses. Using traits associated with his company's top brokers, Neary has developed a typical profile against which recruits are measured. "We don't all fit that typical profile, but it helps build the team," he says. Over time, he's learned that recruits who are similar to the typical profile are a better fit than those who aren't.
Keller Williams uses a variety of testing tools, including DISC, Caliper, and Career Visioning. The company's intensive, multiday testing process delves into career history, motivations, goals, accountability, and other issues company leaders believe are critical to succeeding in their environment. To develop the system, Keller Williams adapted the best practices of many types of businesses into an approach that works for it, Fiedler says.
7. Conduct background checks.
Don't roll your eyes: It sounds like a no-brainer, but busy recruiters too often skip this step or fail to give it the attention it deserves. However, successful recruiters realize it's essential.
Midwest completes extensive background checks on all prospective personnel for a good reason, DeKam says. "A false start with a new hire is far more expensive in terms of time and training than proper qualification."
Frosh outsources the function to Arrin Systems, which checks criminal, civil, financial, and legal backgrounds, contacts references, and confirms applicants' educational credentials.
The background check need not be extensive; it just has to work. Take Neary's, for example: "We ask people we know. It is a small city."
8. Take your time.
Several hiring brokers likened the recruiting process to courtship: Everyone is on their best behavior on a first 'date,' which is not a good environment for making life-altering decisions. Likewise, spending only a few hours with candidates doesn't give you an accurate picture, Fiedler says. Most recruiters move slowly, conducting multiple interviews and spreading the process out over days, weeks, or even months.
"Getting to know this person is critical to not making mistakes and having to go through the process again," DeKam says.
9. Look beyond money but never forget it.
Money may capture attention, but brokerage owners and managers have learned that it often isn't the biggest draw. You have to offer something more, especially to independent brokers who need something special to entice them to join a company.
At Keller Williams, all brokers are considered partners and can participate in the company's international profit-sharing pool, Fiedler says. Brokers are vested after three years and then can receive lifelong profit sharing, as well as leave it to their heirs.
On a limited basis, Midwest offers brokers the opportunity to partner with principals in new property investments and ground-up developments. This year it plans to launch a program to involve key personnel in the company's ownership structure.
Hiring experts agree that compensation packages should cover marketing tools and continuing-education costs, including conventions, seminars, and professional-designation and graduate-degree courses.
DeKam advocates providing 'better-than-par' brokerage tools; accordingly, Midwest invests heavily in technology. Brokers have access to an "expanding software library, a large legal document library, a variety of marketing templates, and numerous custom real estate models for analytical purposes," he says.
He's also convinced that looks matter: A better-than-average work environment includes a top-tier office. "A quality office environment is a requirement today given the excessive number of hours that most successful brokers work."
10. Don't give up.
"Recruiting in an up market requires tremendous perseverance," Frosh says. Don't be tempted to settle, cut corners, or hire a solid producer who isn't really a good fit - it's not worth it. You'll make the best hiring decisions by remaining true to your vision.