WorkPuzzle

Be Happy--Become a Real Estate Agent--Part 2

Last week, our discussion focused on new research concerning where individuals find happiness in their careers.  Surprisingly, the “real estate agent” position topped the 2013 “Happiest Jobs in America” list.

How did the real estate agent position garner such a high ranking?  The position scored highly on the top ten factors that produce happiness at work:

1. Work-life balance

2.  One’s relationship with his/her boss and co-workers

3.  Work environment

4.   Job resources

5.  Compensation

6.  Growth opportunities

7.  Company culture

8.  Company reputation

9.  Daily tasks

10.  Job control over work performed on a daily basis.

In part one of this blog, we talked about how to use this information during an interview.  But, there is more to learn from this research; both from a retention perspective and a second recruiting angle you may have not considered.

Retention

Think about how the agents on your team would rate each of the happiness factors listed. It might be interesting to conduct your own research on this topic during upcoming coaching sessions. 

To mirror a job happiness study, use a five point scale (1-Unacceptable…5-Outstanding) and ask questions in the following manner….”How would you rate your work-life balance while working in our company?”

As you might suspect, retaining agents has a lot to do with maintaining an environment where people feel they can initially obtain and then later sustain a sense of personal happiness.  

Typically, agents won’t leave your organization because the company next door offers something better.  They leave (initially with their emotions) because something (or multiple things) is constantly irritating them. Once this irritation sets in, it’s easy to rationalize that the grass must be greener somewhere else.

To be successful at retaining your agents, be proactive and make sure that these irritations don’t take root in your organization.

Recruiting

From a recruiting perspective, there is a second angle worth considering in the jo happiness study.  It will always be difficult to lure happy individuals away from their current positions with a “life’s great over here” message.

A better strategy is to find those who are unhappy. 

Almost any message of hope has a good chance of resonating with these individuals.  The CareerBliss study documented the job positions where workers are most dissatisfied:

There are a few patterns worth noticing in this data. 

1.  Pay is not correlated to happiness.  The most “unhappy job in America” pays a six-figure salary.  None of the happiest jobs are particularly high-paying positions.

2.  Education level is not correlated to happiness.   Several of the jobs on the unhappy list require high levels of education (nurse, teacher, attorney, pharmacy technician).  Many of the happiest jobs do not require highly specialized education.

3.  Serving unhappy customers is taxing.  Notice that many of the unhappy professions regularly deal with dissatisfied customers or unhappy clients.  People typically interface with the legal, medical, and customer service professions when something has gone wrong.

Successful recruiting first involves finding people who are unhappy with their current employment and then engaging them by tapping into their feelings of dissatisfaction and frustration. 

Unless a  candidate first feels heard on these two topics, the positive traits of being a real estate agent will fall on deaf ears. 

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Be Happy: Become a Real Estate Agent

I had the opportunity to spend some time with the executive team and managers of Ruhl &Ruhl Realtors in Davenport, Iowa late last month.  Caroline Ruhl and her team lead a highly productive company that is full of optimism and contagious energy.

Caroline’s company is very successful at attracting talented young professionals to the real estate industry.  They are far ahead of most of their industry peers and have a bright future emerging. 

By chance, I happened to arrive for a pre-planned speaking engagement on the day when the company surpassed a very aggressive recruiting goal they’ve been working on for several years.   

The impromptu celebration (which started at 9am) included cake, sparklers, candy, champagne, and balloons.  And not just any balloons, the meeting room was filled with balloons that each had the individual name of one agent in the company written on it.  It was quite impactful to look around the room and recognize the lives that have been impacted by the recruiting process.

Doesn’t this sound like a fun place to work?  Darcy Holle and Sally Atwell planned the surprise celebration.  Both of these ladies are great recruiters and lots of fun at a 9am party too!

I relayed this experience to you as a way of introducing some new research that was recently published in Forbes Magazine.  Not surprisingly, Caroline pointed me to this article during my visit.  It only makes sense that a fun place like Ruhl & Ruhl would discover this research!

The research was done by an online career community called CareerBliss, and it involved collecting surveys from more than 65,000 employees.  Forbes magazine reported:

“Employees all over the country were asked to evaluate ten factors that affect workplace happiness. Those include one’s relationship with the boss and co-workers, work environment, job resources, compensation, growth opportunities, company culture, company reputation, daily tasks, and control over the work one does on a daily basis.

They evaluated each factor on a five-point scale and also indicated how important it was to their overall happiness. The numbers were combined to find an average rating of overall employee happiness for each respondent, and then sorted by job title to find which occupations had the happiest workers. A minimum of 50 employee reviews was required to be considered for CareerBliss’ 10 Happiest Jobs in America, and executive level jobs, like chief executive, were excluded from the study. “

And the results…

"The happiest employees of all aren’t kindergarten teachers or veterinarians. They’re real estate agents. Professionals with this job title are typically responsible for renting, buying, or selling property for clients. According to the BLS, they study property listings, interview prospective clients, accompany clients to property site, discuss conditions of sale, and draw up real estate contracts. They make about $51,170 per year, on average—but top earning real estate agents rake in over $92,000.

With an index score of 4.26, real estate agents said they are more than satisfied with the control they have over the work they do on a daily basis. They’re also fairly content with their bosses.

Real estate agents have definitely weathered quite a financial storm over the past few years but right now [mortgage] rates are between 2% and 3% and inventory is low, making it a real estate agent’s dream as new homes hit the market and are getting multiple offers in the first week….  Happy times.”

This is great information to have in your back pocket during your next interview.  If you’re interviewing a “new to real estate” candidate, a high percentage of these individuals are leaving jobs/careers that make them unhappy. 

As we’ve discussed many times in the past, make sure you listen to their story first and address the unique points of pain that you uncover during the interview.  As a side point, after the groundwork is laid, it may be helpful offer this independent research as a way of driving your point home.

During our next discussion, we’ll spend some time learning about the most “unhappy jobs” in America and how this information can also improve your recruiting results.

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

"New to Real Estate" Candidate Sourcing Reaches New Highs

As many of you know, our company’s core business is helping our clients source high-quality candidates for difficult-to-fill positions.  While we assist companies in several different industries, much of our focus has been on the hiring difficulties real estate companies experienced over the last five years.

This has not been an easy task.  It is difficult to get talented individuals to consider changing careers during a recession and during the subsequent recovery.

Employment Stagnation

This may seem counter-intuitive, but pervasive high unemployment and lousy job prospects in the economy  create stagnation in sourcing and hiring for real estate companies. 

On the surface, you might surmise that if there is a large number of people who are unemployed (some of whom are talented individuals), a fair number of them might be willing to give real estate a try. Our sourcing data doesn’t support this hypothesis. 

In reality, most people who find themselves unemployed are not in a strong enough financial position to start a real estate career. Instead, they pursue the quickest path to a steady paycheck.

But, what about the people who are in low-paying, dead-end jobs?  Certainly, some of those individuals would be willing to look at the real estate industry as a way of “upgrading” their career…right?  Our sourcing data doesn’t support this hypothesis either. 

Many people who are underemployed are thankful just to have a job.  They don’t feel comfortable taking a risk that would put their current financial situation in jeopardy.  The proverbial “bird in the hand” is good enough for them.

What’s Changing?

So, what’s changing?  Why are candidate sourcing metrics starting to improve so dramatically in the last 3 months?  

I believe there are two reasons for this change.  First, the real estate market has improved in many areas of the country.  The national media has picked up on these changes and started to report positive news.  Candidates perceive this change and are now more open to considering real estate as a career option.

While positive reports help, most of the momentum is being created outside the real estate industry.   It is related to how average employees in non-real estate companies feel about voluntarily leaving their jobs.

The data for this theory is buried in the metrics that are tracked by the Bureau of Labor Statistics. It was recently highlighted in an article written by Vivian Giang at Business Insider:

“People are voluntarily quitting their jobs at the highest rate since the pre-recession era, according to the Job Openings and Labor Turnover Survey — known as JOLTS — published by The Bureau of Labor Statistics. 

The report says that 2.16 million people quit their jobs in the latest data, which represents 53 percent of all job separations — this includes quits, layoffs and discharges — when accounting for retirees. 

The graph below, published by Gluskin Sheff Research, illustrates the trend in the quitting rate and the number of people who have quit as a percentage compared to the total number of people employed in the past decade:

 

So what does this mean about our labor market? In short, it's an indication that people are confident that they can find other opportunities elsewhere and is a sign of sustained improvement in the labor markets…. This confidence happens when the economy grows fast enough…and people have [enough] faith in their own skills to make a living some other way rather than stay in a job they're not satisfied with.

So who are these workers? There's a good possibility that people are leaving their jobs to pursue freelancing, consulting or the entrepreneur route. This need to work for yourself is predicted to reach 40 percent of the American workforce by 2020, and is most common in sectors of the economy that are growing.”

As you can tell, much of what goes on in the labor market is out of our control.  When a positive trend happens (and in this case, two positive trends), it is important to take advantage of the rising tide. 

When engaging “new to real estate” candidates, now is not the time be on the sidelines.  Develop and deploy strategies for engaging the millions of individuals who are finally starting to feel less risk-averse about their careers.

Question: What strategies are you deploying to engage the 40% of the American workforce who lean towards working independently?

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Attracting New Agents: What do Working Parents Want in a Job?

Over the past year, I've written frequently about the need for the real estate industry to hire young, tech-savvy new agents to replace the aging workforce.  

In many one-on-one discussions with owners and managers, the aging demographic of their agents is quickly becoming the “elephant in the room.” If it is not addressed within the next five years, attrition rates will rise to an unsustainable level for many companies.

There is only one way to ultimately solve this problem—recruit “new to real estate” agents from outside the industry.  While it may be tempting to think hiring from competitors can solve the demographic problems, they have older agents too!  In most markets, there are simply not enough experienced young agents to make that strategy viable.

The companies that become proficient in attracting a constant flow of talented “new to real estate” agents to their organizations will have a distinct competitive advantage in the years ahead.

How do you become proficient at this task?  That’s a complex question we’ve sought to answer in WorkPuzzle over the past several years.   If you’re a new WorkPuzzle reader, you may have some catch-up to do.   Each piece to the puzzle adds new understanding to the realities of hiring.

I discovered another new piece to the puzzle last week that I thought you might find interesting.  It comes from a study recently competed by the Pew Research Center on the nature of modern parenthood. 

The study addressed many different aspects of parenthood, but the most relevant part was how young parents (ie. parents with children under 18 living in the household) interact with work.  More specifically, what is it that working moms and dads find most important in a job:

 

Many of the young, talented candidates who have the capacity to become high-performing agents in your organization will be young parents.   It only makes sense that you understand their priorities when considering a new job.

If you’re interviewing a candidate that’s a parent (by the way, it is technically illegal to directly ask a candidate about their family status, but most candidates will volunteer this information during the interview) be cognizant of these issues.

During the investigative part of the interview, be ready to ask open-ended questions around the topics that are most important to them, such as:

“Do you feel like you’re current job (or previous job) is secure?  Does that bother you?”

“Are you currently in a job that you enjoy?”  What parts of your current job do you find most irritating?”

“Is there flexibility in your current job?  If you had more flexibility in your job, how would your life change?”

By asking questions about these topics, you’ll uncover the unique pain the candidate is experiencing.  Until the candidate feels you understand their unique situation, he/she will not be open to listening to the possible solutions becoming a real estate agent may offer.

Also, notice that spending a lot of time on compensation issues has a low chance of impacting the candidate—especially if the candidate is female.  Don't avoid compensation issues to the point of being awkward, but steer the conversation back the issues that matter.

Finally, a real estate career has the capability of answering the needs that many young parents care about most.  Once you uncover the pain in a candidate’s previous job/career, be ready to articulate how working your organization can provide compelling alternatives to the status quo.

Question:  Would you rather hire a "new to real estate" agent who is already a parent, or hire someone who is not yet at this stage of life? 

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

How ObamaCare Mandates Could Help Real Estate Hiring

As you may know, most of the ObamaCare mandates will  “kick in” over the next two years.  Of course, it is appropriate for real estate owners and managers to focus their attention on the impact this law has on their own businesses.

But what about other industries?  Until recently, I had not put much thought into how businesses in other industry sectors are wrestling with these impending changes.   But these changes are weighing heavily on business leaders in retail, restaurants, and service industries. 

While I feel for those struggling with these new directives (one of my business partners owns a large retail establishment), some good news may emerge from these changes --especially if your focus is hiring “new to real estate” agents over the next few years.  As the old saying goes, one man’s curse is another man’s blessing.

This angle on the healthcare issue was brought to my attention by John Sumser.  John is editor-in-chief of the HRExaminer Online Magazine and writes about Human Resource issues and recruiting from a broad perspective.  As he studied and wrote about the nature of the employment relationship, he discovered the following principle:

Workers who pay for their own benefits are significantly more mobile that those who don't.

This statement may seem self-evident after you read it, but it is surprisingly profound. As we’ve worked with hundreds of real estate hiring managers and thousands of real estate candidates over the last few years, I’ve come to the conclusion that this is the number one reason that high quality people choose not to pursue real estate careers. 

That may be changing.  

Not because real estate will be in a position to suddenly offer medical benefits, but because the competition (other non-real estate companies) will soon stop offering benefits.   Here is an excerpt from an article that John recently wrote on this topic:

“I had a chance to catch up with some friends who are at the bottom of the system. Both work in retail. Both are part-time students. Both work hard and creatively. Both are noticing weird behavior from their employers.

They work in different cities in different parts of retail.

Since the first of the year, managers have been rotating and schedules have been shifting. As the noise settles down, the managers are slotting 50-hour weeks while the rest of the store works 27 to 30 hours.

In both cases, this amounted to a 20% cut in pay and a potential loss of benefits. (Their benefits are still intact but won’t remain so when the next ‘look back’ happens.) Very little is explained.

From their [point of view], it looks like management is lurching.

Their companies are maneuvering through the challenge of figuring out who does and doesn’t get benefits. Since it’s over their pay grade, they only understand the bluntest impacts of the story.

Ultimately, they will end up paying for their own health insurance.

It’s not really a surprise. While it is a momentary inconvenience, what happens next is pretty obvious. While their employers have figured out how to dodge this bullet, they only get a temporary reprieve.

Workers who pay for their own benefits are significantly more mobile that those who don’t. Up until last year, a worker who got sick (or had a family member who got sick) was bound to the current employer for a very long time. Pre-existing conditions made a whole range of people uninsurable if they left the current boss.

Now, after the first initial pinch, these low level workers are freer than they’ve ever been...

The employers who recognize this short-term windfall will end up paying for their employees healthcare in the long haul. Workers who get saddled with new bills seem to always want raises.

The interesting question is whether the employers who dodge this first bullet really understand that they are creating an attrition problem that will be accompanied by wage increases.

It doesn’t look like it. They are predictably going for the short money.”

I think there are two take-aways for the real estate industry from John’s insight:

1.  Learn how to talk about medical benefits.  Ask open-ended questions about the candidate’s medical benefit situation during the interview—especially if the candidate is from one of the industries being impacted by the ObamaCare changes.  In the past, this topic was often avoided because it opposed a short-term disadvantage of working as a real estate agent.  Now the playing field is more level and a real estate career still offers significantly more income potential than traditional jobs.

2. Develop transition programs.  Find ways to help people transition from the jobs where they recently lost their benefits to a real estate agent position.  We hear frequently from our clients…”We only want to hire full-time agents.”  That’s fine, but there is window opening in the employment world where a quick transition from part-time to full-time may look compelling to many talented individuals.  Rigidly hanging onto the full-time only model may cause you to miss engaging many talented individuals who will be looking at the real estate industry for the first time.

Question:  Have you recently interviewed someone who has brought up the issue of medical benefits?   What did you learn from the interaction? 

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Why "Career Seminars" Will Always Be Inferior to One-on-One Interviews

One of the questions we often get from hiring managers is:

“Are one-on-one interviews really necessary in the real estate hiring process?”

What’s implied in this question (and usually comes out later in the discussion) is that it might be more efficient to conduct group interviews with several candidates at once rather than one-on-one interviews.

The line of reason is that interviews take a lot of time, and many early stage candidates are not serious about making a career change.  The group interview is a great way to “weed-out” those who are not truly interested or unqualified.

In a real estate company, this “group interview” usually takes the form of a career seminar.  It typically is an informational meeting where the company describes the benefits of changing careers and becoming a real estate agent.  At the end of the meeting, there’s typically some call to action (sign-up for licensing school, schedule a follow-up meeting with a hiring manager, etc.) that encourages the candidate to move forward in the process.

For years, we’ve recommended not using this methodology for interfacing with the majority of candidates.  There is nothing wrong with running an occasional career seminar for those who truly want information about a real estate career.  However, using this tool as a replacement or precursor to one-on-one interviews has not proven to be a best practice for recruiting high quality individuals.

Outside of the empirical data that we collected on this topic (ie. most real estate companies consistently hire 40% to 60% “D” performers using traditional hiring techniques such as career seminars), I could not put my finger on the psychology of why the “group interview concept” was inferior until last week.  I found this insight in an odd place—a coaching article written by Ed Batista.

I’ve read Ed Batista’s blog for several years, but I usually gain insight from a coaching perspective, not a recruiting perspective.   Ed is a successful executive coach and an instructor and leadership coach at the Stanford Graduate School of Business.  His business is coaching, but in the process of explaining coaching concepts he reveals a lot about the psychology of people.

The particular blog that peaked my interest was titled:  Spending Attention.  In this discussion, Ed makes the point that focused attention is one of the most powerful forces made available to human beings—both from a giving and receiving perspective.

“Focused attention is our most precious resource, because 1) it's extremely taxing on our intellectual and emotional capabilities, 2) it can have a amazingly powerful effect on its object, and 3) it can't be subdivided. (We can pay continuous partial attention to multiple objects simultaneously, but we can truly focus on only one object at any given moment.)

Much of what I do as a coach and as an experiential educator at Stanford involves nothing more than devoting my full attention to another person. This is somewhat easier in a one-on-one coaching session with a client or student, and it's somewhat harder in a group setting, but under any circumstances it's a challenging task that's almost always worth the effort.”

So, what does this have to do with interviewing?  There’s something  powerful that happens to an individual when they receive another person’s full attention.  Ed puts it this way:

“… devoting our full attention to someone can be a novel experience for both of us that in and of itself stimulates something useful in the interaction. The other person feels seen, heard, recognized, validated, appreciated or challenged in ways that partial attention never generates. And as we momentarily quiet our inner voice, we suddenly become aware of so many things that we missed before--not only about the other person and our environment, but also about ourselves. The subtler, more elusive thoughts and feelings that are usually drowned out by the louder currents can now be heard.”

It’s obvious that humans crave focused attention.  In the hiring process, the best chance of making this happen is in a one-on-one interview. 

By the way, just because a person is sitting across the desk from you, doesn’t mean focused attention will happen (read the rest of Ed’s blog to learn more about how you can become effective at giving focused attention). 

But, focused attention is almost guaranteed NOT to happen in a group interview/career seminar setting.

A high quality candidate wants and deserves the focused attention of the hiring manager during the hiring process.  If this element is missing, the high quality candidates will exit the hiring process. 

When the high quality candidates leave the hiring process, all you’re left with are desperate candidates who believe they deserve no better than a career information session. 

Of course there are exceptions to this rule (I’m sure some of you will write me about how you hired your best agent ever through a career information session), but you won’t win the hiring game by betting on the exceptions.  In the long run, the time and effort you put into one-on-one interviews will pay off.

Question:  What techniques have you found effective in making candidates feel they have your focused attention during an interview?

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Already of a member of TMOC?  If so, join the WorkPuzzle Dialog Group by clicking on the WorkPuzzle Group icon on the left side of your TMOC homepage.  Questions?   Email the WorkPuzzle editor (workpuzzle@hiringcenter.net) and we'll walk through the process.

 

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Making Your Interviews Memorable (For the Candidate)

Over the last couple of years, we’ve written more than 40 blogs that that cover the topic of interviewing.  While there is much research available on this topic, some of the best ideas and insights have come from our readers.  Today, I’d like to share another one these insights. 

Al Mirabelli is the Broker in Charge of the Prudential Carolinas Lake Norman Office.  His office is located in Huntersville, North Carolina.  A couple of weeks ago, a candidate that had recently interviewed in Al’s office sent their company’s recruiting coordinator the following email: 

“Yesterday’s meeting was great.  From the time I walked in (amazing the effect of seeing your own name with balloons) till the time I left, I could see why Prudential Carolinas Reality would be a great place to work and a good fit for me.  I have a few offers on the table right now. Prudential feels like the best fit for me. I would just need a day or to to go over finances to make sure it would be possible right now.”  

This peaked my interest.  What did the candidate mean when he said, “amazing the effect of seeing your own name with balloons?” 

Al provided some background later that week,

“At the entrance foyer of the lobby to my office I have a small [whiteboard easel] that welcomes candidates and other visitors to my office.  During the day of this candidate’s interview, we happen to be welcoming a local group of builders to our office who are partnering with some of our agents and attached some balloons to the whiteboard.  It was such a hit that they ended up taking a picture on their way out.  They later said they were very flattered that we would do such a thing.”

Apparently, the candidate was flattered as well and made a point of mentioning it to the recruiting coordinator during a follow-up call.

Who knew that such a simple thing would have such a great impact?  I must admit, that I was even a little skeptical when I heard this story.   Maybe this candidate was just overstating their feelings in the initial email.   

But, then I received this email a week later from Prudential Carolina’s recruiting coordinator:

“I thank you very much for allowing me to meet Al.  He definitely has passion for the business, which drew me in.  He was wonderful and the entire workforce was very courteous. 

They even had my name on a white board upon entry that said "Welcome [Candidate’s Name]."  It was great!  I plan on working at Prudential and learning the skills necessary so that I can be extremely successful in the field.  So with my ambitious nature and all the information that Al provided to me, I will be successful.”

[Note:  I removed/blurred the candidate’s names in the emails and pictures because we did not get their permission to share their identity]

Al and his staff are onto something—don’t you think?  I believe that Al has figured out how to tap a basic human need—the need for acknowledgment.

I recently read that acknowledgement lets people know that you have truly seen them.  It communicates we have taken the time to pay attention, to notice, and to speak out loud what they contribute, what they accomplish, and some of who they are at their best.

Al—great job on figuring this out and applying it to your interview process!  I hope others will try this as well.

Question:  Do you have interviewing techniques that you’ve found helpful.  If so, share them with us, and we’ll publish your ideas.

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By joining TMOC, you'll get to see who else is in the group and your comments will only be seen by those whom you trust.   Joining TMOC is quick, easy, and free (no kidding…this takes less than 2 minutes).   To get started, click here.

Already of a member of TMOC?  If so, join the WorkPuzzle Dialog Group by clicking on the WorkPuzzle Group icon on the left side of your TMOC homepage.  Questions?   Email the WorkPuzzle editor (workpuzzle@hiringcenter.net) and we'll walk through the process.

 

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Why Bad News for the Real Estate Industry May Be Great News for Recruiting—Part 2

Last week, I started a discussion on the historical price trending in the real estate industry.  I highlighted  a recent interview that was done by Robert Shiller on Bloomberg television. 

The interview centered on the notion that home ownership has historically been a mediocre or poor investment.  In his opinion, treating it as an investment was a  “fad” based on short-term economic conditions that probably will not happen again.

Wow…did I get an earful back from several of the WorkPuzzle readers! Apparently, many of you don’t care for Dr. Shiller (in general) and did not find his analysis very thoughtful. 

Here is part of an email I received shortly after publishing:

“…to think that [drawing the conclusion that] this real estate cycle, however severe, will change these longer term trends is a rush to judgment. I’ve always found Shiller coy, playful, and not entirely serious in the way he comes across. Or so he seems on TV.  His index was full of bubble markets and, I always felt, distorted (and made worse) the perception of real estate in the 34 states that were not bubble markets.”

Here is another one:

“…the problem [with Shiller’s analysis] is it ignores rents, or imputed rents.  Over time, rents rise, but housing debt service is more or less fixed.  Eventually, when the house is paid off, you live there 'rent free.' No matter what, you’re paying rent, either to your landlord, or to yourself.  Yes, you have maintenance, taxes, and so forth, but so does a landlord.  And you get the psychic reward of owning your own place, and can do what you want with it.

I can’t believe a smart guy like Shiller doesn’t get this.  Compare the net worth of homeowners and non-homeowners…there’s no comparison, and the house is a big part of that.  Sorry for the rant, but seeing a knowledgeable guy like Shiller run down housing just frosts me.”

There were several other good points as well.  I’m glad I prefaced my original introduction with the statement “I’m not a real estate expert…”   I think that I've proven that to be true, and it appears that some of the talking heads on television may not be experts either! 

It’s certainly good to know that it's not all doom and gloom for the real estate industry.   That’s encouraging.

So, what does all of this have to do with recruiting?  Suprisingly, it is what I initially found interesting is the historical housing price graph above.  There is great news in this data.  And, there is especially great news for real estate companies focusing on “new to real estate” recruiting in the future.

Regardless of whether you ascribe to Shiller’s vision or the more hopeful scenarios outlined by many of our readers, I think there is a consensus that what happened between 2000 and 2010 will probably not repeat itself (at least not in the short-term).

It is much more likely that the graph will either flatten out to the right or begin a slow and steady rise that keeps pace with inflation.   As one reader put it,

“…all the talk was about how real estate may never be any good again, because it will 'only' appreciate at about the rate of inflation.  It’s SUPPOSED to only appreciate at the rate of inflation.  It’s a consumable…someone has to be able to afford to live there to rent it.  If it appreciates faster than people’s incomes, it becomes unaffordable, and we just saw what happens when that happens. “

That makes sense.   And if it’s true, then this recruiting principle will help you be successful in the future:

Recruiting is most effective in stable markets.

This idea may seem counterintuitive, but it’s definetly something that goes through the minds of talented candidates as they consider changing careers. And this principle has already had a profound effect on real estate recruiting over the last 10 years.

Think about it--if you were attempting to recruit between 2000 and 2006, it was much easier to get warm bodies in the door, but it was difficult to hire the right people.  What drew many of these new hires into the industry was a “get rich quick” mentality.   These new hires not only left when the easy money dried up (more than 600,000 agents left the real estate industry between 2006 and 2009), but also they caused disruption and harm to many organizational cultures along the way.

Of course, hiring “new to real estate” agents during the backside of the real estate bubble (2007 to 2009) has been very challenging.   While the press constantly paints a negative picture of markets undergoing correction, talented individuals naturally shy away from the turmoil. 

So, where does that leave us now?  For the past couple of years, there seems to be some stabilization happening.  As we move to the right on the graph (the future), many experts are suggesting (Shiller included) that we may be in for a period of slow and steady growth.

Here is the recuting lesson to take from this discussion:  Slow and steady growth is the ideal environment for hiring “new to real estate” agents. 

How do we know this?  We've seen it with our own eyes.  As we consult with real estate companies we constantly see truly high-quality agents who have been with companies over 15 years.  When did those new agents come into the industry? During the previous period of stability.

As you know, it’s difficult to predict the future.  However, if there is a sustained period of slow real estate growth ahead and the real estate industry experiences the retirement of many of it’s mature agents (those 55 and older now), there could be a perfect storm brewing (in a good sense) in the world of  “new to real estate” recruiting. 

I think we’d all enjoying seeing that happen.  Make sure you're prepared to take advantage of it.

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Join the WorkPuzzle Discussion at the Tidemark Online Community (TMOC)

Engage in the WorkPuzzle discussion by joining the TMOC private social network.  Commenting on a public blog like WorkPuzzle can be a little intimidating, so why not join the discussion inside the privacy of the TMOC discussion group?  

By joining TMOC, you'll get to see who else is in the group and your comments will only be seen by those whom you trust.   Joining TMOC is quick, easy, and free (no kidding…this takes less than 2 minutes).   To get started, click here.

Already of a member of TMOC?  If so, join the WorkPuzzle Dialog Group by clicking on the WorkPuzzle Group icon on the left side of your TMOC homepage.  Questions?   Email the WorkPuzzle editor (workpuzzle@hiringcenter.net) and we'll walk through the process.

 

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Why Bad News for the Real Estate Industry May be Great News for Recruiting

As real estate buffs, I’m sure most of you are familiar with Robert Shiller’s work.  As you may recall, it was Dr. Shiller’s infamous book, Irrational Exuberance, that accurately predicted the bursting of both the dot-com stock bubble and later the housing bubble.  The first edition of his book was published in 2000, and the second edition (that focused more on the housing market) was published in 2005.

Since Dr. Shiller predicted the collapse of these bubbles (especially the housing bubble) so accurately, he has risen to “prophet status” in the minds of many media pundits.  At least once a month, it seems I read an article where he is cited as the expert on what the future holds for the real estate industry.

Most of the prognosticating, seems to center around some form of the chart below:

While there are many different ways to present this historical housing data, most of the discussions, with Dr. Shiller focus on the right side of this graph.   “ Are we at the bottom of the market?” “Will housing prices return to their previous levels?” “Will housing prices now follow a more traditional trajectory?”etc.

After watching a number of these interviews, I’m starting to think Dr. Shiller is getting tired of these questions.  This is especially true for the interview I saw last week on Bloomberg television.

At one point, the interviewer (Trish Regan) challenges Dr. Shiller’s lack of enthusiasm for the most recent housing stats that suggest a rebound may have started.

“"Then why buy a home?" she asked. "People trap their savings in a home. They're running an opportunity cost of not having that money liquid to earn a better return in the market. Why do it?"

"Absolutely!" Shiller exclaimed. "Housing traditionally is not viewed as a great investment. It takes maintenance, it depreciates, it goes out of style. All of those are problems. And there's technical progress in housing. So, new ones are better."

"So, why was it considered an investment? That was a fad. That was an idea that took hold in the early 2000's. And I don't expect it to come back. Not with the same force. So people might just decide, "Yeah, I'll diversify my portfolio. I'll live in a rental." That is a very sensible thing for many people to do."

Notice what he said about viewing housing as an investment—he clearly believes “investing in housing” (for the purpose of getting a financial return) is a bad idea.  He goes on later in the interview to show that the real return on a housing between 1890 and 1990 amounted to a 0% return. 

You’re welcome to watch the whole interview here (be warned, it’s about 10 minutes long):

 I’m certainly not a real estate expert, but this seems like a major paradigm shift for the real estate industry, and possibly for society at large. 

Ever since I bought my first home 15 years ago, I’ve heard and believed that my house was a good investment.   While that has personally worked out well for me, the future will likely be very different for those who are buying homes today.

If we relook at the housing graph that we considered to start this discussion, it seems that Dr. Shiller is suggesting that we’re headed back to the left side of the graph.  This would mean some sort of steady growth that really amounts to negligible growth. 

While this doesn’t seem very exciting for real estate sales (perhaps many of your are feeling depressed by this analysis), I think it is great news for real estate recruiting. 

Why?  I'm out of time for now.   I’ll share these thoughts in my next discussion.

Question:  Do you belive the Dr. Shiller is correct?  If so, how could this be good news for real estate recruiting?

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Join the WorkPuzzle Discussion at the Tidemark Online Community (TMOC)

Engage in the WorkPuzzle discussion by joining the TMOC private social network.  Commenting on a public blog like WorkPuzzle can be a little intimidating, so why not join the discussion inside the privacy of the TMOC discussion group?  

By joining TMOC, you'll get to see who else is in the group and your comments will only be seen by those whom you trust.   Joining TMOC is quick, easy, and free (no kidding…this takes less than 2 minutes).   To get started, click here.

Already of a member of TMOC?  If so, join the WorkPuzzle Dialog Group by clicking on the WorkPuzzle Group icon on the left side of your TMOC homepage.  Questions?   Email the WorkPuzzle editor (workpuzzle@hiringcenter.net) and we'll walk through the process.

 

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. 

Successfully Influencing “New to Real Estate” Candidates to Make a Career Change

One of the questions we often get from hiring managers is…”How do I consistently get high quality candidates to make the commitment to become real estate agents?” 

As we observe this process, it always seems the best candidates are on the fence because they don’t have to become agents.  Since they have talent and marketable skills, they usually have the option of doing something else.  Often, that “something else” is just staying in their current job or career field.

How do you get these candidates off the fence and headed towards becoming your next top performing agents? 

According to new research recently published in Harvard Business Review, keep them focused on a great outcome they will personally realize if they become real estate agents.

The research on this topic was conducted by Dr. Mark Goulston and Dr. John Ullmen and is summarized in a new book called Real Influence: Persuade Without Pushing, Gain Without Giving In.   Here is a excerpt from the HBR article:

“ Few people like to be pushed into doing something, or sold hard on it. And few like to push or deliver a hard sell. But at the end of the day, or even the end of a conversation, you do have to move things forward. So how do effective leaders really get things done?

As part of the research…[we] interviewed more than 100 people who "get things done," but who aren't pushy. But when we asked them, "Who persuaded you to do something really important?" more than a few arched their backs and replied defensively, "Nobody persuaded me to do anything important!"

When we switched tactics and asked, "Well then who positively influenced you to become the person you are?" they leaned back, smiled, took a deep breath of satisfaction and replied, "Now that's a different story!"

This small change in perspective seemed to help the researchers uncover several consistent and repeatable patterns among great influencers.  As a hiring manager, these patterns could be very helpful—don’t you think?

I won’t steal the author’s thunder by revealing all their secrets, but I did find one of their techniques very compelling:  Great influencers learn to communicate great outcomes.

“When people paint a picture of a great outcome, they're not trying "to persuade people to do something important." They're trying to "positively influence them" to get them to a better place.

Take the story of Jim Sinegal, co-founder and former CEO of Costco, largely seen as the heart and soul of that great company. Jim is very humble and doesn't like to be given too much credit for his and Costco's success.

He often tells the story of how, as a recovering juvenile delinquent still headed in the wrong direction, he was working as a bagger at FedMart in San Diego. One day he was singled out by the legendary Sol Price, the founder of FedMark who is viewed as the father of the warehouse store concept.

Price saw beyond where Jim was, even beyond where he wanted to be, to where and who he could be — and focusing on that "great outcome" let him influence Jim, even as others had failed to persuade him. Price's dedication to customer value and the caring treatment of employees lived on through Jim and is so ingrained in the Costco culture that those values live on beyond his stewardship as CEO.”

For a real estate hiring manager, there is an important lesson in this approach. If you try to persuade someone to take the next logical step in their work life (ie. become a real estate agent), you’ll likely come across as “salesy” and meet resistence.  

But, if you effectively “paint a picture of a great outcome” for the candidate during the interview (and consistently during the follow-up process), the research suggests that this will produce a different result.   You’ll become a positive influencer rather than a ineffective persuader.

Question:  What type of “great outcomes” do you think would be compelling to the candidates you are interviewing?

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Join the WorkPuzzle Discussion at the Tidemark Online Community (TMOC)

Engage in the WorkPuzzle discussion by joining the TMOC private social network.  Commenting on a public blog like WorkPuzzle can be a little intimidating, so why not join the discussion inside the privacy of the TMOC discussion group?  

By joining TMOC, you'll get to see who else is in the group and your comments will only be seen by those whom you trust.   Joining TMOC is quick, easy, and free (no kidding…this takes less than 2 minutes).   To get started, click here.

Already of a member of TMOC?  If so, join the WorkPuzzle Dialog Group by clicking on the WorkPuzzle Group icon on the left side of your TMOC homepage.  Questions?   Email the WorkPuzzle editor (workpuzzle@hiringcenter.net) and we'll walk through the process.

 

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Editor's Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle.