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When an industry suffers from a problem for decades and still hasn’t figured it out, it’s likely focusing on the wrong issue.  Real estate’s “recruiting and retention” problem has consumed millions, perhaps billions of dollars in wasted time, energy and effort. It’s apparent that all of the “symptom” solutions and snake oil in the universe won’t solve it. So let’s try something else: Challenge the premise.

What if there wasn’t a recruiting or retention problem in the future?

By now, you probably have guessed that our contrarian logic is back in action. Our starting point is the exact opposite of today’s industry standard. Recruiting isn’t something to be desired: it’s an indicator of systemic problems. Most likely poor performance within the existing sales force.

So too much recruiting, for real estate brokers, is an indicator of a performance management problem.

Retention is mostly a false concept – a problem that rarely exists. Does losing an agent matter? Only if they are a very top producer on a very equitable commission split. Therefore, the problem of retention doesn’t exist, because most agents aren’t top producers and most top producers have absurdly inequitable commission splits. The attempt to “retain” most top agents represents a bad business decision. Check your own P&Ls for proof.

Still, recruiting and retention remain  perennial problems, most because the activities to attract and keep agents focus on the wrong things.

Actually, the wrong “stuff.”

Most companies today compete for agents by offering an endless array of “stuff.” By now, we should realize that competing for agents on “stuff” is a no win game. You can’t buy enough chathkes to satisfy non-performing agents. Even when you invent new stuff all the time, most agents hardly use the stuff you already give them. They just complain that “someone else at another company” has better stuff.

The solution? Do the opposite: Stop the competition of stuff.

Brokers aren’t supposed to be giving agents any stuff in the first place, right? Aren’t these the same agents who refuse to do what you tell them because they are independent contractors? Then let them bring their own stuff with them! Brokers provide them the legal and market opportunity to ply their trade, upon their customers, since most agents service the customers generated by the broker’s marketing dollar.

The first thing brokerages need to understand is that recruiting agents based upon the “give me more stuff or I won’t join/stay with your company” creates an unbalanced, no win relationship from day one. It’s bad strategy. The “we have most stuff than the other guy” strategy is a fantastically self-defeating business strategy. It can only lead to destructive, misplaced uses of funds, energy and brainpower. It’s a formula that tells your marketing, technology and training departments to develop tools focused on the wrong person: the agent, rather than exclusively on the consumer. Significant money and effort is siphoned into creating websites to assuage agent egos. Most of which remain incomplete – unless, of course, the company also provides a secretary to do it for the agents. More stuff.

There will be no satiating the beast. Each recruit will demand more stuff; every potentially-leaving agent ups the ante. Any hint of new “stuff” from a competitor increases the stakes. This week you have “more” tools; next week they have “more” training. Never ending expenses. And all focused internally, rather than on the consumer. Remember, the entire industry thinks it’s “all about the agent” – which is why the most prominent thing on an agent’s website is – the agent.

Never will there be enough money left over to focus on real performance. Why offer training – to use existing tools – when the focus will be on something new soon?

Of course there is a solution. It’s the exact reverse of today’s approach. In Real Estate, the Next Generation, it’s not about the stuff the broker provides to the agent, it’s about the stuff – the right stuff – the agent brings to the broker’s table.

To get “hired” as a subcontractor – a vendor partner who will be presented opportunities to earn income servicing the broker’s customers – the agent of the future will be expected to come prepared. He will already have completed certifications in critical sales skills like marketing, pricing, negotiation and customer relationship management.

Do we mean agents should compete for slots at a brokerage? Yes we do. Do we mean brokers should make agents compete – based upon skills and experience – to get the opportunity to earn the work? Yes we do. Do we think agents should bring their own laptop, digital camera, MLS account and Blackberry with them before being allowed into the office? Yes we do.

Do we think any of this will really happen in today’s brokerages? No, we don’t.

Consider an analogous industry: Home Builders use subcontractors, just like brokers use agents. Does the home builder give the electrician tools when he hires him to wire the house? Does he provide the plumber with a wrench? Does he train the electrician before letting him work on the house, or does he expect the vendor to come pre-certified and equipped to do the work?

What we’re describing can’t possibly happen in today’s brokerages, who are still begging inexperienced people to join and experienced people to stay. Who throw money – and stuff – at both, at extreme expense and with ultimate futility – creating more problems than they solve. On the day when agents apply for their jobs – like the real world – is the day the recruiting and retention problem ends. Or at least changes, to the normal patterns of people coming prepared to interview for the job they are applying for.

In the next generation of real estate. You know: The one in which the broker finally makes a profit?

In the meantime – and because this blog is getting too long – what can today’s broker’s do while drowning in the competition of “stuff against stuff”? Change the rules. Stop competing on commodities. Compete on something that can’t easily be overcome by a competitor.


Modern business runs on brainpower. Most stuff like marketing, technology, even marketing dollar, is cheap to come by. Only management knowledge and skills make people better performers. That represents a unique competitive advantage that can’t be easily duplicated by competitors. Management coaching, oversight, training and accountability make performance happen. Top agents do this for themselves, so managers must do this for the rest of the agents. Not stuff. Only applied management makes companies competitive, productive.

And that’s the only value to sales people: Will your management team make them more productive than the other company’s team?

Compete on your people – your managers – for now. It’s a step in the right direction – out of the endless war of stuff, and toward a vision of your company where eventually, you’ll subcontract to vendors who show up with the right stuff (their stuff) in the first place.