The Rise of the Free Agent: Good News for Real Estate Recruiting

Tuesday, September 06, 2011

A couple of weeks ago, I wrote a blog that boldly stated that the publication of some recent articles (one most notably in USA Today) about an increased number of people becoming entrepreneurs, was probably a false trend.

Well, I might have been wrong… As I researched this topic some more, I found some additional data that may be very good news for the real estate industry. Kelly Services, an internal staffing and Human Resources consulting company, recently published research that documents a significant trend toward employees becoming “free agents” in today’s job market.

This topic was highlighted in a recent ERE article written by John Zappe. Here’s how John summazied the research:

“The number of 'free agent' workers has nearly exploded in the last three years, and now 44 percent of working Americans describe themselves that way. A Kelly Services survey says economic necessity, the desire for more freedom and flexibility, and age have driven up the number of workers not tied to a single company for their livelihood. It’s a dramatic change from 2008, when Kelly’s survey found 26 percent of workers describing themselves as free agents.”

That’s a trend worth noticing. When an employment statistic goes from 26 percent to 44 percent in just three years, something is changing. So, what’s changing? The research addresses some causes:

“A significant driver is the economy. Respondents to the 2011 survey were twice as likely as their counterparts in 2008 to say they became free agents because they were laid off or couldn’t find another job. …Also fueling the rise is the increasing reliance of American business on contingent and contract labor, say the authors of a whitepaper detailing the results. Companies, note Jocelyn Lincoln and Megan M. Raftery, 'can scale up and down faster and easier by adopting more flexible workforce strategies.'”

So, lots of workers have been laid off in the last three years, and many companies are hesitant to commit to a typical employee relationship as they rehire to meet their needs. So, how does that help the real estate industry?

What used to be strange (working as an independent contractor) is now becoming much more normal.

The research goes on to highlight one other issue that I thought was worth noting—the “quality” of the typical independent contractor. Are these folks all the corporate losers who can’t keep a job? Not according to the research:

“More than one-third of all free agents have earned a master’s degree or higher, and compared with traditional employees, more free agents (77% compared to 62% for traditional employees) possess technical or professional skill set. What does this trend mean for American business? It means there’s a huge pool of available talent in nearly every discipline and industry for employers to tap.”

So how do you go about tapping this great pool of talent? The Kelly Services researchers found three trends:

Money. You need to offer opportunities that reliably produce cash for the independent contractor. Remember that you’re competing for the attention of the best candidates with other companies that do compensate for verifiable skills and results.
Type of Work/ Quality of the Project. We talk frequently in WorkPuzzle about the tendency of individuals to languish in their jobs. Be ready to address this issue. Will the individual find the work you’re asking them to do interesting and engaging? This needs to be a major theme of the interview.
Reputation of the Company. This one surprised me. I suspect that talented people who operate as free agents want to be associated with organizations who (in their own mind) match their level business acumen. The more prominent and trusted your company’s brand, the higher the level of talent you’ll be able to attract and engage.

The final thing worth noting is that many talented free agents have multiple jobs. While it is the desire of many real estate companies to hire full-time agents, it may be difficult to get someone to a full-time status without first taking some babysteps. The facts are that kids have to be fed, mortgages have to be paid, and most talented free agents want a “project” to grow into a fulltime obligation—not be deemed one from the start. That’s too risky and doesn’t fit the free agent’s mindset.

Your homework…study the free agent trend and be able to speak about it during interviews and other recruiting conversations. It is one of the few truly positive trends that could directly help the real estate industry.

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. Comments or questions are welcome. If you're an email subscriber, reply to this WorkPuzzle email. If you read the blog directly from the web, you can click the "comments" link below.

How Your Expectations Shape Your People

Wednesday, August 31, 2011

In the last edition, I revealed definitive research that should forever alter your approach regarding professional negotiations…from one of an aggressive–win/lose strategy, to one of positive expectation. If you haven’t read it yet, please read it now…My hope is that it will change your view forever regarding what makes for a successful negotiation process.

How do you decide who will succeed and who will fail? Despite the fact that some of you are convinced that you can reliably predict who will succeed and who will fail, research suggests that it might actually be your expectations that are producing the results.

The Rosenthal Effect refers to the phenomenon in which the greater the expectations placed on people, the better they perform. Since 1968, a number of experiments have proven that the reality of performance can be greatly influenced by the preconceived expectations of others.

In the famous first study, Robert Rosenthal told a number of teachers that they had assessed all of the incoming 5th graders with a special new instrument that was designed to identify which children were poised to experience an intellectual “growth spurt” in the upcoming academic year; they were “high potential” children. In reality, these children were chosen at random, and there was nothing special about them at all.

By the end of the year, the majority of that group had, indeed, made the greatest strides among all the children, despite the fact that there was nothing different about those children, outside of having the highest expectations placed on them.

What did the teachers do differently with these students? They tended to downplay obstacles, they showed more positive patience and, most importantly, they conveyed a strong confidence in their belief that these children would do well. The children apparently picked up on this positive expectation and lived up to the challenge of achievement.

The Rosenthal Effect is a form of self-fulfilling prophecy. In this respect, people with poor expectations internalize their negative label, and those with positive labels succeed accordingly.

We all are guilty of doing this. We make snap judgments about people early on in our experiences with them. When we do this, we unconsciously set the stage for failure.

This once again proves a simple, yet eternal principle: If you want to bring out the best in people, expect the best; expect that they CAN do it…show patience, positive confidence, and a greater number of people WILL succeed.

Editor's Note: This article was written by Dr. David Mashburn. Dave is a Clinical and Consulting Psychologist, a Partner at Tidemark, Inc. and a regular contributor to WorkPuzzle. Comments or questions are welcome. If you're an email subscriber, reply to this WorkPuzzle email. If you read the blog directly from the web, you can click the "comments" link below.

How to Guarantee Improved Negotiations

Monday, August 29, 2011

In Real Estate, perhaps more than most industries, much of the work requires good negotiating skills. Whether you are helping clients buy or sell as an agent, or recruiting an experienced agent, there are numerous opportunities to practice your skills. Do you trust your skills? Or, do you need to brush up on them?

The surprising news, according to researchers Anderson and Ross (Journal of Experimental Social Psychology), is that your techniques may play a considerably lesser role than you would imagine. So, what does matter?

Before I tell you the answer, allow me to describe how Anderson and Ross set up their research:

Varda Liberman and colleagues had undergraduates negotiate with a postgraduate student (Stooge- who was told nothing of the purpose or design of the study) about the division of university funds between undergrad and post-grad students. Half of the undergrads were told that previous negotiations had reached agreement (a positive expectation), and half were told just to "try their best" (no expectation). The result was that all 17 of the "positive expectation" group reached an agreement, while only five out of 17 of the "no expectation" group agreed. Also, the positive group rated the offers made to them as much more fair and were more satisfied with the outcome.

Another, much tougher experiment required Jewish Israeli Business School students to negotiate with an Arab Israeli woman over the division of funds between Israel and Palestine. You can imagine all the pre-concieved biases that would potentially have a negative impact on this discussion. But, again those who had their expectations set toward a positive outcome found far greater agreement (31/38 vs. 13/38), and were also happier with the outcome.

So, clearly, what we anticipate greatly influences outcome. If you go into a negotiation believing the worst, and expecting to be taken advantage of, you're likely to be too aggressive and competitive. Your motive is to win "the battle." Or, on the flip side…if you are overly concerned about offending and are too passive, you might make easy concessions and likewise, not be pleased with the result.

So, why does positive expectation work? Positive expectations breed trust and acceptance of the other person as a reasonable, rational person. That in turn creates a baseline of legitimacy of both parties needs, and minimizes the gamesmanship. The jockeying for the best maneuver to "win" is no longer the central goal.

Now don't get the wrong idea… It's not that it makes you blindly trust the other person. You still retain the right to assess whether your opinions/beliefs are being considered as well. Expectations can remain high.

The overall principle is a simple one: Assume the best in people first, and your success will improve. The right principles are always the eternal ones. They aren't just the right things to do…they are what's best for everyone.

In the next edition, I'll share how this principle is vital for those who recruit, train, and mentor new agents.

Reference: Liberman, V., Anderson, N., and Ross, L. (2010). Achieving difficult agreements: Effects of Positive Expectations on negotiation processes and outcomes. Journal of Experimental Social Psychology, 46 (3), 494-504

Are You a River Person or a Rut Person?

Wednesday, August 24, 2011

By river people, I'm not talking about the guy who lives in a van down by the river (like on Saturday Night Live). Rather, I'm referring to the type of person who keeps everyone around them hopeful and motivated to press on toward a goal, even when times get tough. Don't confuse my use of the term with what a few self-help gurus have suggested. I'm talking about these people in contrast to those (some by no fault of their own) who have become "rut people," or those who have been infected by the dreaded learned helplessness (LH). (I'll explain more about LH in the next edition.)

Over the past 25 years of providing psychotherapy, my chief mission has been to free people from unconscious ruts that control their lives. This isn't easy. People rarely see how they have boxed themselves into a view of themselves and a view of the world that limits their perspective, beliefs and actions.

When a person is in a rut through learned helplessness, they limit their own movement, growth, vision and freedom to act. They see the world in a fixed way, and try to convince everyone around them that their "rut trapped" perspective is indeed reality. The way they lead their life unveils consistent themes, describing their own personal rut repeatedly acted out.

A person who is not stuck in a rut, flows like a river, emanating wisdom, humor, and humility, even in difficult times. They may have a long list of things that haven't worked out, but have no regrets for their efforts.

When things are going well, economically and emotionally, it is much more difficult to differentiate the "rut people" from the "river people." In good times, everyone can fake their way to appearing like positive, hopeful geniuses. But when the tide goes out, you can sure see who isn't wearing a swimming suit! In difficult times, ruts are bound to show themselves. Even the most fluid people can be temporarily thrown into a rut in these extreme circumstances, simply because life isn't familiar or secure.

Losing a job, a home, and plans for the future can certainly appear as an insurmountable rut. "River people" however, don't allow themselves to get stuck there. They manage to continually pull themselves up and out of the rut, dust themselves off, and move on with life. I feel fortunate to know many river people and they are always refreshing and encouraging to be around. They are the Salt and Light of our world.

As leaders, you owe it to yourself and those you coach to be this Salt and Light for your organization, to give people hope. Whether you're coaching agents or interviewing new candidates, help people find hope and envision the opportunities that can unfold if they exercise the "formula for confidence." Help them realize their freedom and potential through new ideas, new innovations, new training, new commitments, new values, and perhaps even an entirely new direction.

You'll find that everyone within an organization benefits once every single individual tributaries finds their "flow," and can contribute their full potential once again. It's not only practical to encourage this hope, it's the right thing to do.

But, change is difficult – Even the most healthy, rational people tend to avoid change, preferring instead the security and safety of what is known. Ironically however, change can produce incredible growth, if responded to effectively. If you're interviewing new candidates without both empathy around change, PLUS the encouragement to change, you're missing an incredibly useful and helpful tool.

Have candidates answer this question: When have you experienced the most growth in your life? For most people the answer is when they were undergoing tremendous change, accompanied by uncertainty…perhaps when they were much younger.

It's normal to risk more when we're younger, because we don't have that much to lose. If you analyze that statement, you will begin to see the problem: Security and hanging onto what we've acquired becomes paramount for most of us when we're older. We cling to it and cherish it, without ever reflecting on its inherent value to our well-being.

Of course it's irresponsible to take foolish risks. But, you can also make the argument that it is foolish to follow a course of action simply because it offers the illusion of security.

In the next edition, I'll describe the concept of Learned Helplessness, so that you can better understand how people get stuck in ruts, and how you can help them out…

Blazing A Trail For New Agents To Follow – Part 2

Monday, August 22, 2011

Last week, I shared a hiking experience I had with two of my teenage sons. Toward the end of the discussion, I mentioned that I gained some unexpected recruiting insight from the experience.

The insight came on the heels of an article I read the week prior in CNBC. The article discusses the fact that many employees are starting to give up on corporate America, and are making the decision to strike out on their own. Here is a short excerpt:

“With the U.S. unemployment rate at 9.1 percent as of July 31 and a fragile economic recovery underway, many workers feel they are left with no choice but to take their careers into their own hands.

Employees are bidding farewell to corporate America in the hope of finding a more secure, or at least fulfilling, future. They are reinventing themselves by starting their own companies or by pursuing long-put-off dreams that include creative or charitable endeavors.

While it might seem like a bold move, countless workers believe the abundance of uncertainty in today’s job market mitigates the fear factor.”

I’ve read 10 to 15 articles like this in the last couple of years. Most of them (this one included) contain a few anecdotal stories about frustrated individuals who have a passion to strike out on their own.

Does this mean there is some significant new trend toward corporate employees starting their own businesses? I don’t think so… This is a frequent topic in business publications, which tells me there is always a group of individuals in our society who feel a strong desire to own a business. From various sources I’ve read, there are usually about six million people per year who start small businesses. I would bet that many of the individuals who have this desire would be great candidates for the real estate industry.

So, back to last week's hike… As we were hiking the last mile toward the lake that was going to be our final destination, we came across a number of obstacles along the trail. The previous winter, there was apparently a severe windstorm that blew down a number of trees. Over this part of the trail, there were about a dozen “blow-downs” that obstructed the path.  Hiking into one of these lakes is hard enough, but climbing over large tree trunks, crawling on your hands and knees through brush, and even holding some of your gear in your teeth so that your hands are free to grab branches (all with a 30 pound pack on your back), makes it all the more difficult.

As we crossed over the fifth or sixth obstruction on the trail, my son Camden said, “I’m sure glad I was not the guy who explored this area for the first time. Can you imagine how hard it would be if there was no trail to follow? It would be like constantly going over these blow-downs!”

If you think about it, this is exactly how most people feel when they start a business.  It’s like forging a trail though a forest for the first time. It takes lots of energy, perseverance, and luck to be successful.  This is why more than 50% of new businesses fail in the first year.

So, what do you have to offer the six million people who want to venture out each year and start a small business?

Quite simply—a trail.

Your company has explored an area of business, found some great destinations, and built a trail for others to follow. If a person is willing to make a commitment to follow the trail, they have a much higher chance at success than venturing out on their own.

Keep in mind, embarking on a 13-mile hike and climbing 2,000 feet in elevation is not for everyone. In fact, there is a large portion of the population who would fail to accomplish this, whether they follow a trail or not.  But, there are some individuals who are physically fit, motivated, and willing to make the necessary sacrifices to reach the destination. For those people, the trail is often what makes the difference between success and failure.

Finally, as you’re talking to candidates, let them know there are more obstacles on the trail in recent years than there used to be. It’s nobody's fault—sometimes trees blow down and make things more difficult. Eventually, the park rangers will come and clear the trail with chainsaws and the path will once again be clear.

The real estate industry has faced some difficult circumstances in recent years that have made everyone’s job more difficult. It won't always be that way, but acknowledging the current realities is important.

While my sons and I were on the trail to the lake, we met a group of hikers who were on their way back. They warned us about the blow-downs and told us it would be slow-going for the last mile. Then they said something really important…"It is tough to get into the lake, but the fishing is incredible." At that point, you couldn’t have kept us out.

Hope of success, plus a trail, are the best things you can offer to someone facing the prospects of blazing their own trail….

Blazing a Trail for New Agents to Follow

Wednesday, August 17, 2011

Since it’s summer, I thought I’d lighten things up a little bit and share a personal experience I had with two of my sons over the weekend.

One of the advantages of living in the Seattle area is our close proximity to the Cascade Mountain Range. As you may know, we get near constant rain (and snow in the mountains) for most of the year. But when the rain does stop in July and August, we’re left with a lush landscape in the nearby mountains.

This year, there was a particularly large snowpack, so the mountain streams and rivers are flowing strong, and most of the alpine lakes are up to their brims with cold, clear water. Perfect for trout fishing.

Every summer, I try to take each of my kids on a backpacking trip near one of these pristine alpine lakes. Last weekend, we decided to hike around Lake Snoqualmie. You can view our route by checking out this posting on Trimble Outdoors. You can also take a look at a satellite view on Google.

Our original plan was to stop at Dear Lake (the third of the four alpine lakes along this trail), but we couldn’t find a campsite we liked. So, we hiked an additional mile to get to the northern most tip of Snoqualmie Lake. The total distance to our campsite from the trailhead was just over six miles. The hike took about four hours and we logged about 2,000 feet of elevation change along the trail.

When we finally arrived at the lake, we were rewarded with perfect weather, clean, crisp air, breathtaking scenery, and amazing peace and quiet. Since there were a few other people camping around the lake, we used our small inflatable “trail rafts” that allow us to fish away from the shores. With no one else on the water, it makes you feel like you have the lake to yourself. As the sun was setting, we cooked up some of the trout we caught, and then enjoyed a warm campfire for as long as we could keep our eyes open.

The next morning, my boys jumped back in rafts and headed back out onto the lake to do more fishing, while I stayed back and read. During this morning session, my son Clark hooked into the largest fish of the trip—a fat 16-inch cutthroat trout. Before leaving, we hiked down the outlet stream that empties what the snowmelt inlets continually feed the lake. After lunch, we packed up camp and made it back to the trailhead just after 5pm, and we were home before dark.

What a great privilege to be able to enjoy this type of natural beauty…and to experience it with my teenage boys. These are great memories. But, is there a recruiting lesson in all this? Believe it or not—there is! And, it originates from a comment my younger son made as we were hiking out from the lake on Sunday afternoon.

I’ll share more about this in my next WorkPuzzle entry…