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. 

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. 

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? 

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

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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.

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.