Yesterday, we learned there are six distinct reasons individuals find motivation in their work.

From a personal perspective, some motivations are better than others (for example, a person pursuing a noble purpose usually reports a higher level of subjective well-being than someone just working to maximize income).

It makes sense that higher motivation levels would lead to better agent satisfaction and retention metrics, but does it also lead to higher performance?

According the HBR researchers, the cultural connection to performance is very strong.

Cultures that inspired more play, purpose, and potential, and less emotional pressure, economic pressure, and inertia, produced better customer outcomes.

This [pattern has played out in multiple industries] including retail, banking, telecommunications, and even the fast-food industry.

The high-motivation pattern resulted in not only better customer satisfaction metrics, but also higher revenues and profits – as much as 30% higher in one study.

You can build an organization where your agents are motivated by economic and emotional pressure, but you may find you’re losing ground to companies who are doing the hard work of building positive cultures.

Don’t take the cultural shortcut. It’s a trap.

According to classic research by Edward Deci and Richard Ryan from the University of Rochester, there are six distinct reasons people find motivation in their work.

Play: These individuals are motivated the by work itself—they work because they enjoy it. Play is our learning instinct, and it’s tied to curiosity, experimentation, and exploring challenging problems.

Inertia: These individuals are stuck in a rut. They’re just doing what they’ve become accustomed to doing and can’t really explain why. 

A person can be experiencing several of these motivations at any one time.

If they are experiencing one or more of the top three motivations (play, purpose, potential), they’ll tend to be strongly connected to their work and the culture of their teams.

Agents in this category are difficult to recruit away from competitors.

If they are experiencing one or more of the bottom three reasons (emotional pressure, economic pressure, and inertia), they’ll tend to be less connected to their organizations.

Agents in this category are easier to recruit.

One of the most important questions to ask during recruiting appointments: Why are you doing what you’re doing?

As a hiring manager, part of your job is to help your prospects make the best career decisions.

Benjamin Franklin once found himself in this position with a friend who was facing a difficult career choice.

To make the decision, Franklin advised him to first make a simple list of pros and cons.

He then suggested using the following technique to simplify the list:

1. Analyze the pro/con list and apply estimated “weights” to each item.

4. If there are still a lot of items on the list, look for other weight ratios to eliminate more options (for example, one three-weight pro would equal three one-weight cons).

Eventually, the list will be reduced to a manageable size and the right decision will emerge.

Many people have adapted Franklin’s original advice to make it more defined and measurable.

It’s a great tool to use when a prospect is on the fence about making a change.

It transforms you from being a recruiter into a trusted advisor.

Last week, a friend told me:

I’m not sure I want to go back to commuting.

He’s a consultant and has been working at home for the last year.

Going back to the office (which his management team wants him to do) means commuting 45 minutes on a bus each way.

His response to this proposition: I’m looking at other opportunities that will allow me to have the flexibility I’ve come to value over the last year.

These types of discussions are happening everywhere right now—both inside and outside the real estate industry.

Some people have flourished under new work conditions, while others have languished.

Those who have flourished want to hang on to what they’ve gained.

Those who have languished want things to get back to “normal” as quickly as possible.

Neither scenario will happen to everyone’s hopes and expectations, and thus the seeds of dissatisfaction are planted.

Like my friend, many of your agents, your competitors’ agents, and outside professionals will be considering new opportunities that match their preferences.

It’s time to put out your “we’re hiring” sign and be crystal clear on what you have to offer a prospect.

Yesterday, we discussed how the “too many job opportunities/not enough candidates” dynamic is putting pressure on the employment marketplace.

In the real estate market, customers are asking: Where did all of the listings go?

In the employment market, employers are asking: Where did all of the candidates go?

According to columnist Alicia Little, there are three major trends driving the candidate shortage.

Policy: Recent public policy changes may, in some cases and in some states, make it more desirable not to work.

Parenting Responsibilities: Parents are still struggling with home education responsibilities as some areas continue to transition from full remote, to partial remote, to fully in-person learning environments.

Here is the good news–all three of these issues are temporary.

Most people want to work, want to see their kids back in school, and will gain confidence in the months ahead.

And the most talented and motivated will emerge first.

That’s why it’s important to stay engaged in the recruiting game. It’s one of those—you need to zig while everyone else is zagging—moments.

Lack of housing inventory is one of the most significant problems facing the real estate industry.

It’s wreaking havoc on home buyers, real estate companies, and a host of ancillary organizations who depend upon housing churn to be successful.

Did you know the exact opposite is happening in the job market? And it’s happening with a similar level of intensity.

Bureau of Labor Statistics recently reported the recreation of a million new jobs in March alone, double the number of jobs added in February (yes, their stats lag a little).

According to employment economists, there has also been a sharp rise in the number of jobs posted to employment sites.

And the number of companies who are competing for job seeker attention via job advertising has increased significantly in the last two months, as well.

What’s driving these sudden increases?

According to researchers, it’s related to two factors—a reduction in the number of candidates and a reluctance of those candidates to apply.

We are seeing a declining recovery of the unemployment rate; many are still in fact out of work but are no longer searching for or applying to jobs.

Ultimately, supply is far outpacing demand in this case.

Why is this happening? We’ll discuss some underlying causes in tomorrow’s Insight.

But this we know for sure—it’s going to be a bumpy ride with lots of competing forces as the economy attempts to recover from the effects of the pandemic.

I recently had the opportunity to hear Jad Abumrad speak on the ingredients of successful storytelling.

Jad is the co-host of a popular NPR program called RadioLab. The program airs on more than 500 radio stations and has more than a million podcast subscribers.

The mission of RadioLab is to take really complex topics (usually from the scientific realm) and make them understandable to normal people like you and me.

You’d think Jad would be an expert at explaining things, but he’s not. He believes explanations are a waste of time.

An explanation is like talking to a deaf person. They can’t hear it.

Neil Armstrong stepped on the moon. It would be great if everyone could step on the moon, but it can’t happen. Experiences often don’t scale very well.

So how do you get information to someone (like your recruiting prospect) when creating an experience in not feasible?

Tell a story. Stories can be heard because they are the next best thing to experiences.

They breathe life into an explanation and get your message heard.

The real estate industry is so competitive, many recruiters and hiring managers get stuck in a rut.

You tell your prospects: We’re better than our competitors!

But that means nothing to most agents.

That is, unless you append the sentence with … at _________.  

And the blank is something they find valuable and think they need.

You can only truly lead the market in a few finite areas.

Once you’ve defined those areas, recruiting has less friction.

You’ll find the best prospects, articulate your message more clearly, and deliver on what you promise.

Everybody wins.

In a post from the archive, we highlight the research of Harvard Business School professor Boris Groysberg.

Dr. Groysberg studied the pros and cons of recruiting high performers (what he called ‘stars’).

After examining the careers of more than 1000 star analysts at Wall Street investment banks, and conducting more than two hundred frank interviews, Groysberg came to a striking conclusion:

There are a few exceptions, but most stars who switch firms turn out to be meteors, quickly losing luster in their new settings.

I don’t know of any specific research like this for the real estate industry, but some of the underlying issues affecting future performance would certainly apply.

If you’re going to recruit high performers, you should be aware of the inherent risk that past performance may not duplicate itself in your company.

It may be better to try to recruit emerging high performers.

These could be new agents who you believe have transferable skills and talents.

Or it could be experienced agents who have stagnated and not reached their potential with their current companies.

Recruiting is hard because it depends on you successfully predicting the future.

You can increase your odds, but there is no way to guarantee the success of every hire.

I got this question from a reader yesterday:

During recruiting calls, the “How much did you make on your last transaction?” question is one that our competitors use against our model.

How can our high support/high service model answer this objection?

Sometimes, the key to answering an objection is changing the question.

Larry Kendall frequently recommends asking this one: How much are you making an hour as a real estate agent?

The agent may have made $8,000 on their last transaction (average amount in the US), but if they only sold four homes/year (average amount in the US), their hourly rate is $15.40.

The first question has limited context because it relates to one transaction. The second question gets at what people care about most.

You may want to counter with this question when you go after their agents:

Did you know the average agent in our marketplace only earns $15.40 per hour, but the average agent in my office makes $85/hour? 

When they ask you how this happens, respond by saying:

We do this by providing a high level of support and service to our agents so they can focus their efforts on revenue generating activities.

We take the low-value and mundane tasks off their plates so they can scale their businesses and earn more.

You can always play to your strengths.

In chemistry, a catalyst is an intermediary that causes another chemical process to spontaneously happen or happen more quickly.

For example, the catalytic converter in a car contains platinum which serves as a catalyst to change carbon monoxide (a dangerous gas) into carbon dioxide.

Like in chemistry, recruiting picks up pace in the presence of a catalyst event.

There are two types of recruiting catalyst events–reactive and proactive.

Reactive Catalyst Events. These are events that happen without your direct involvement.

For example, a manager leaves a competitor’s office. When this event happens, the agents in that office are suddenly more susceptible to being recruited.

Proactive Catalyst Events. These are events that you start with the intention of creating a reaction.

For example, you make a cold call to an agent questioning the financial sense of their broker’s compensation model. How much did your broker make on your last transaction?

High performing recruiters are always looking for catalyst events or creating them on their own.

Without them, recruiting moves too slowly.

Baseball season is underway, and it looks like teams will get to play a full schedule this year.

As you may know, baseball is a sport driven by metrics and statistics.

From an offensive perspective, getting base runners into scoring position (on second or third base) is an important metric.

If a team gets enough players into scoring position, runs will naturally follow.

Runs lead to wins and wins lead to championships.

Recruiting follows a similar pattern.

To win, you must consistently get high-quality prospects into scoring position.

This means bringing a number of people up to bat (active recruiting prospects).

Getting a percentage of those prospects to first base (live conversations via text, phone, or email).

And, moving the highest potential prospects into scoring position (a live face-to-face or video interview).

This is the simple formula most high-performing recruiters use to reliably reach their goals.

In 1977, Cheap Trick released their now classic single I Want You to Want Me.

I’m sure many of you can hum the tune.

This simple song contained some profound recruiting advice:

Your recruiting prospects want to know they’re wanted.

This knowledge builds attraction between two individuals.

It’s a message that is easy to insert into the recruiting process at various points and will likely resonate with those who are hearing it.

I really respect the work you’re doing, and I’d love to have someone with your talent on our team.

If you’d ever consider making a move, please remember you’re our #1 prospect.

It’s a simple message that can have a powerful affect. After all, you can still hum the song 44 years after it was released.

Sidenote: In 1984, researchers confirmed the Cheap Trick hypothesis as it relates to persuasion in business applications—so you don’t have to completely trust what you learned from this song.

This week, we’ve been talking a lot about the importance of asking thoughtful, open-ended questions during your interactions with prospects.

Even if you’re committed to this best practice, you may still find that questions/answers don’t flow freely during the recruiting process.

Why? One reason is the “social costs” associated with answering questions.

Researchers at the University of Minnesota studied this topic and discovered what holds back individuals during these exchanges. Here are the top six in descending order of importance:

Indebtedness: It makes me feel that I need to reciprocate to the one providing answers to my questions.

Self-confidence: I feel that it conveys a lack of confidence on my part.

As you reflect upon your interactions during the recruiting process, it’s helpful to recognize these issues are at play under the surface—especially during interactions with experienced agents.

If a person suddenly clams-up during a conversation, it’s a good indication they’re feeling one or more of these inhibitions.

At this juncture, ask yourself: Am I making this person feel ________________ with my questions?  (ex. Am I making this person feel incompetent with my questions?)

A good conversationalist will sense inhibitions and pursue a different angel when they experience resistance.

Last week, I purchased a light switch for 40 times what a normal light switch usually costs.

Why? Because I had a problem.

I needed a light switch on the outside wall of a pocket door cavity.

This $79 light switch allowed me to install a remote that looks like a light switch but does not have wires or boxes behind the drywall.

To control the lights, the remote communicates with the traditional light switch at an inconvenient location in the room.

The problem was solved and I’m happy to pay extra money for the perfect solution.

The same economic principle applies to recruiting.

Think about how you’re conceptualizing and selling your value proposition.

There is always a tendency to drive prices (and margins) to the lowest possible level to compete with the low-cost providers.

But for most brokerages and teams, it’s better to identify a niche with a problem, offer a unique solution, and charge more for it.

The higher margins will always go to the companies who are most innovative, creative, and courageous.

But this only works if you’re providing a unique solution to a legitimate problem.

If you’re offering the same solution as your low-cost competitors and trying to charge more for it, the best recruiting prospects will quickly see through this scam.