by Ben Hess, Managing Director, ThirdPool Recruiting

Failed Hire Rate is a common metric for determining how successfully you’re onboarding new agents to your team.

To calculate this metric, we must first agree upon a definition of a “failed hire.”

For real estate hiring, a common definition is someone who joins the organization and then leaves within 90 days without completing a transaction.

Building upon this definition, the Failed Hire Rate is the ratio of the failed hires to the total hires during a defined time period.

For example, if your office hired 10 agents last year and 2 were failed hires, your Failed Hire Rate would be 20%.

What’s an acceptable Failed Hire Rate?

We’ve worked with some organizations who have Failed Hire Rates of 25% or higher. This level of attrition is exhausting and expensive.

These organizations quickly benefit from making improvements to their onboarding process.

Organizations who have a selective hiring process and a purposeful onboarding process have failed hire rates at 10% or below.

Do a quick inventory of your hiring for the previous year and calculate your team’s Failed Hire Rate.

If it’s too high, that’s a quick indicator that your onboarding process could use an overhaul.

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by Ben Hess, Managing Director, ThirdPool Recruiting

Bill Walsh, the legendary San Francisco 49er’s coach, knew that some things were too important to leave to chance.

He recognized the first couple drives of the game would often cast the die for the remainder of the competition.

“So, we prefer to make our decisions related to the game almost clinically, before the game is ever played…. [During the game] you are in a state of stress, sometimes you are in a state of desperation, and [it’s difficult] to make calculated decisions.”

To avoid risking a poor start, Walsh would script and meticulously practice the first 25 plays of the game.

After the first 25 plays, he’d make adjustments based on game conditions.

A new hire’s start in your organization is also too important to be left to chance.

Many hiring managers dedicate huge amounts of energy and expense to bring a new hire into the organization, but lose focus once the new hire crosses the starting line.

To avoid seeing your hard word vanish before your eyes, treat the first 90 days of your new hire’s tenure in your organization like Bill Walsh planned his first 25 plays.

Failed hires compound the problem of talent deficiencies.

It’s worth the time, effort, and focus to finish the hiring process strong.

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by Ben Hess, Managing Director, ThirdPool Recruiting

In his excellent book on marketing, Allan Dib provides a simple format for a marketing follow-up email.

His formula is:

You know [problem]? What we do is [solution]. In fact, [proof].

This template can easily be adapted to recruitment marketing and be used as a basis for your post-interview follow-ups.

For example, here is the body of an email following this template:

=======

You know how most agents get bogged down with so much administrative work they don’t have time to focus on growing their businesses?

What we do to help agents get over this hurdle is provide the highest ratio of support staff to agents compared to anyone in our marketplace.

In fact, in our office more than 90% of administrative tasks are handled by non-agent team members who are incentivized to see the agents they support succeed.

=======

While these emails are intentionally short and simple, they must address the emotionally-charged issues your ideal prospects are experiencing.

If you’re recruiting experienced agents, develop a series of these emails covering issues that differentiate your brokerage from your competitors.

If you’re recruiting new agents, focus your email series on issues that differentiate the real estate career from traditional employment.

In both cases, build a drip campaign that launches  soon after each interview.

If you solve enough of your recruiting prospects’ problems, you’ll eventually get the job of being their manager.

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by Ben Hess, Managing Director, ThirdPool Recruiting

Many real estate companies and teams approach recruiting serendipitously.

Hiring managers are great at closing the opportunities that happen to come along, but very few develop an end-to-end system that produces predictable recruiting results.

Like any other business process in your office (ex. getting a real estate transaction closed), an effective recruiting system will have defined components.

Here are the common components of successful recruiting systems:

1. Abundant Prospects
2. Thoughtful Interviews
3. Persistent Follow-Up
4. Purposeful Onboarding

Do a quick inventory of your recruiting process.

Are these components clearly defined?  

Do you have a way of measuring the effectiveness of each component?

If the answer to either of these questions is “no” or “somewhat,” then we have some work to do in 2019!

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by Ben Hess, Managing Director, ThirdPool Recruiting

Real estate and entrepreneurism seem to be innately connected.

A person’s passionate desire to start a business is a common component in the stories of the most successful agents.

But according to a recent article in the Atlantic, there may be less entrepreneurial-minded individuals in the Millennial generation.

Research suggests entrepreneurial activity has declined among Millennials. The share of people under 30 who own a business has fallen to almost a quarter-century low….

Why’s this happening?

That’s a complex question, but most researchers boil it down to the high levels of student loan debt and the fear of taking risk. It was difficult to grow-up during the great recession.

There two ways real estate hiring managers can act upon this trend:

-Focus recruiting efforts on those who are later in their careers. The average age of a successful start-up founder is about 40 years old.

-Restructure real estate agent positions to resemble traditional jobs rather than business ownership opportunities. This is one of the reasons that real estate teams are often more successful at hiring.

Responding to changes in the marketplace is a signature strength of any successful business.

It’s a signature strength of a successful hiring manager too.

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by Ben Hess, Managing Director, ThirdPool Recruiting

If you spent any time in the sales profession, you’re probably familiar with the basic concept of identifying an ideal prospect.

What are the characteristics of a person who is most likely to buy?

What are the characteristics of a buyer who is most profitable to your business?

You know the drill.

While this is common in sales, very few hiring managers apply this principle to recruiting.

Knowing what you’re looking for is the first step in finding it.

Start building your version of the “Ideal Recruiting Prospect” by looking back at the hires you made over the previous year or two.

The goal is to inventory the characteristics of those who are thriving as well as those who have failed (it’s helpful to know what to avoid).

To build your list, start by completing the sentence:  I’ve noticed the individuals who thrive on my team ________________.

Focus your attention on characteristics such as education, work history, character traits, and other work-related factors.

Avoid listing characteristics that are illegal or inappropriate to consider during the hiring process.

This is a great time of year to conceptualize your ideal recruiting prospect. It will help you gain a clearer recruiting vision for 2019.

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by Ben Hess, Managing Director, ThirdPool Recruiting

The ThirdPool writing and editing staff will be taking a break from publishing the ThirdPool Recruiting Insight as we enter the holiday season.

We’ll restart publishing on Wednesday, January 2^nd.

Thank you to all those who read, ask questions, and engage in the discussion. We learn much from this daily dialog, and we hope you do too.

Real estate recruiting is a difficult problem.

As we look forward to finding more solutions in 2019, I’d like to point you to a recent blog posted by Seth Godin:

Respect difficult problems

They’re difficult because they resist simple solutions. Glib answers and over-simplification have been tried before and failed.

People have tried all of the obvious solutions. They haven’t worked. That’s why we’ve resorted to calling them difficult problems.

Difficult problems require emotional labor, approaches that feel risky and methods that might not work. They reward patience, nuance and guts, and they will fight off brute force all day long.

Here’s to continuing the fight in 2019!

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by Logan Dziuk, Recruitment Marketing Manager, ThirdPool Recruiting

In last week’s recruiting tip, we looked at a handful of performance metrics that are helpful to track consistently in regards to your recruiting process.

Here are a few practical applications of those metrics to help improve your process.

1. Improving Your Sourcing Channel Mix – Your sourcing channel mix is the collection of paid and organic mediums through which you source candidates. When you track your recruiting metrics back to the source level, you can differentiate between quality sources and poor-performers.
2. Optimizing Your Job Content –A simple method of improving the content of your job advertising is through a process called A/B testing. Try creating two slightly different ads for the same position, making one specific change. Then run both ads simultaneously while controlling for other factors such as sourcing channels and location. After some time, your metrics will begin to show you the dominant ad variation.
3. Increasing Your Engagement – The way you engage with candidates has a direct impact on the Cost-per-Hire metric that was covered last week. Trying different methods of connecting with recruiting prospects can have a measurable impact on your CPH.

You may not have direct control of these applications and you may not even have access to the key metrics we discussed last week. Even if you work with recruitment process provider, such as ThirdPool, it’s important that you have visibility into how your recruitment process is being improved.

Next week, we will look more specifically at engagement and showcase a practical way you can connect more effectively with candidates.

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by Ben Hess, Managing Director, ThirdPool Recruiting

Steve Murray at Real Trends does a great job of boiling down the metrics that effect a real estate company’s profitability.

The average gross margin of a brokerage firm (the percent of gross commissions after paying agent commissions and franchise fees) has fallen to about 18%.

Like any low margin business, a real estate company has to increase volume to make more money.

In a recent article, Steve points out that increasing volume has become increasingly difficult because the average gross margin per agent has plummeted in recent years:

2012 Per Agent Gross Margin: $16,087

2016 Per Agent Gross Margin: $8,382 (-48%)

To maintain profitability, this new reality only leaves one option for most brokerage firms–significantly increase the number of agents in their offices.

More than ever, recruiting is the key component to the real estate profitability equation.

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by Logan Dziuk, Recruitment Marketing Manager, ThirdPool Recruiting

Data often makes the difference between a “throw-everything-at-the-wall-and-hope-something sticks” approach and a process of continual enhancement and development.

The former wastes time and money on tactics that don’t bring value to your process and costs you missed opportunities on things that do bring value but are under-utilized or under-invested in.

The latter produces an effective, efficient, and repeatable process that drives down costs and increases the reliability and consistency of your recruiting and hiring efforts.

In regards to recruiting, it’s important to measure a select few metrics but track them closely and consistently. Lots of data gathered inconsistently or inaccurately will be just as useless as having no data at all.

Here are a few metrics you may want to consider tracking on a regular basis (weekly or monthly).

1. Cost-per-Applicant (CPA). This is your recruitment advertising spending divided by the number of total applicants you received.
2. Total Cost-per-Hire. This is your total spending on recruitment – things like your ATS, advertising, texting services, etc. – divided by the total number of hires you made.
3. Source of Hires. This is the original avenue that a hire took to apply for the job. Could include your company career site, a job posting on Indeed, a career fair, etc.
4. Quality percentage. This is the percentage of applicants that you would characterize as being quality applicants.

Next week, we will look specifically at how to leverage these Key Performance Indicators (KPIs) in practical ways to help optimize your recruiting process.

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by Logan Dziuk, Recruitment Marketing Manager, ThirdPool Recruiting

Growing your social media footprint is a critical step in your recruitment efforts.

Job-seekers frequently want to learn more about your company’s culture, benefits, and roles before they apply. Social networks provide an avenue to showcase your organization and cultivate relationships with active and passive job-seekers.

By leveraging social networks such as Facebook, LinkedIn, and GlassDoor, you can develop a more informed candidate and have a tangible presence on the sites that encompass the majority of your prospective candidates’ employment-related web traffic.

There are few ways to build your social media presence as an employer:

1. Ensure that you have profiles on Facebook, LinkedIn, and GlassDoor. This includes information such as a company description and your mission, vision, and values as an organization.
2. Craft a social media strategy and produce quality content. This could include things such as videos that highlight your company’s culture and pictures of team building events you participate in.
3. Engage with your audience (potential candidates). One example would be leveraging Facebook Messenger to engage in a live conversation with recruiting prospects. Another example could be responding appropriately to employment reviews of your company on GlassDoor.

This is certainly not an exhaustive list, but if you are looking for a place to start with your employment-related social media strategy, use these tips to get your wheels off the ground.

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by Ben Hess, Managing Director, ThirdPool Recruiting

Yesterday, we discussed the “attrition constants” that form the foundation of an effective retention strategy.

According to CEB Researchers, two new attrition variables have emerged, and they are especially relevant to the real estate industry.

People tend to leave companies when:

They feel like they’re not doing as well as others in their peer group outside the company.

They feel like they’re not as far along as they should be at a certain point in life.

When do these feelings of dissatisfaction take root in an agent’s mind?

It commonly happens after personal milestones such as birthdays or professional milestones such as work anniversaries.

But according to researchers, the largest catalyst for career dissatisfaction are large social gatherings.

For example, job hunting activity jumps 16% after a person attends a class reunion.

As your agents attend holiday parties and social gatherings, some dissatisfaction may start to germinate.

It’s a great time to ask: “How do you feel like the last year went for you?” or “Do you feel hopeful for the year ahead?”

The objective is to have these discussions with your agents BEFORE they start having them with your competitors.

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by Ben Hess, Managing Director, ThirdPool Recruiting

Next to recruiting, the retention of profitable agents is something that exasperates every real estate leader.

It’s difficult and expensive to recruit, train, mentor, and coach a new agent. Seeing your investment walk out the door is heartbreaking—and bottom-line breaking.

For years, human resource consulting firms have studied the reasons for employee attrition.

CEB Corporate Leadership Council published their findings in a recent report on how to create compelling careers for today’s employees.

Some of these reasons are constants (they seem to show up in every study), but new variables are now emerging due to the tight labor market and innovative data collection techniques.

Here is the prioritized list of the attrition constants:

1. They don’t see opportunities for promotion and growth.

2. They don’t like their bosses (especially their first-level managers).

3. They are proactively offered a better opportunity (usually involving higher pay/better split).

If you’re not focusing most of your retention effort on these issues, you’ll miss the mark.

There are new retention variables to consider as well. We’ll cover those in tomorrow’s Insight.

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by Ben Hess, Managing Director, ThirdPool Recruiting

Many of us are starting to use online video meetings during the recruiting process.

A few months ago, Seth Godin published some guidelines for conducting/participating in a video meeting. I thought these were worth sharing:

1. Sit close to the screen. Your face should fill most of it.

2. Use an external microphone or headset.

3. When you’re not talking, hit mute.

4. Don’t eat during the meeting.

5. When you’re on mute during an audio call, you can do whatever you want. But when you’re on mute on a video call, you need to act like you’re truly engaged. Nod your head. Focus on the screen. Don’t get up and feed your dog.

6. Don’t sit with the window behind you. A little effort on lighting goes a very long way.

7. When you’re talking, spend some time looking at the camera, not the screen. You’ll appear more earnest and honest this way.

8. When you’re talking, go slow. No one is going to steal your slot.

Making some small tweaks in your video meetings will make them much more enjoyable for those on the other end.

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by Logan Dziuk, Candidate Sourcing Coordinator, ThirdPool Recruiting

Brands are a promise to deliver a specific set of benefits through the use of a particular product or service. Moreover, brands thrive when those benefits are exceeded, but crumble when expectations are left unmet.

Think of the brands you have a strong loyalty to. Maybe it’s the Apple I-Phone or MacBook you’re using to read this post. Perhaps it’s the two or three Ford vehicles in your driveway or even the Starbucks coffee you order every day on your commute to work.

Each of these brands have cultivated a loyal customer base because of their extraordinary marketing strategies and because they almost always deliver the experience and benefits that they promise in their marketing messages.

Likewise, your brand as an employer is a promise to deliver certain benefits to prospective hires. When your brand grows in a positive light, it makes your recruiting and hiring efforts easier in the long run. But, unfortunately, your employer brand falters when your promised benefits go unmet for new hires, leaving you with a bleaker recruiting future.

As you think about your employer brand, ask these questions:

What do current employees (agents) think about us as a company or team? (Your brand as an employer is not what you say it is. It’s what your employees say it is).

What are the benefits we offer to our agents (commission split, flexibility, training, technology, etc.)?

How captivating is our Employee Value Proposition (EVP)? (Think of this as your elevator pitch for prospective agents).

How are we following through with our (EVP)? Are we delivering (even exceeding) the promises we make current and prospective agents?

You can use these questions (and the answers to them) as a framework for helping you adjust your messaging to recruiting prospects and also to improve the execution of the deliverable(s) you’re offering new and current agents.

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