Thinking about reducing staff since sales volume is slowing? Don’t fall into the seasonal real estate hiring trap! Reacting in the short-term sets you up to miss a key opportunity to build a sturdy talent bench. Timely hiring helps you to provide proper training and set your team up for busy season success.
Top agent Kevin Blain (RIP, Kevin) and Brian Icenhower discussed the importance of making educated hiring decisions as opposed to seasonal emotional ones.
We understand it can be scary adding staff when transaction volume may be at its lowest. But building now helps you sail through busy season with ease. Seasonal real estate hiring decisions based on emotions should be avoided. Proper talent bench-building is easily accomplished using effective capacity management techniques.
Build Smart With Capacity Management Planning
Many companies use a “pants on fire” approach to capacity management: they bring on new employees only when their staff is so busy all they do is put out fires. Supply is definitely exceeding demand which is a sub-optimal time to think about bringing on new employees.
If you bring on new team members when your current staff is operating at or over capacity, onboarding and training can become haphazard at best and totally overlooked at worst. In these stressful situations, new team members are often treated to on the job training where you watch them ‘sink or swim’. It may seem like you’re weeding out the weak and finding the best fit for the role, but you’re really showing good people the door before they’ve had a chance to prove their worth.
There are many reasons you want provide a solid foundation that will set them up for success.
This is a big one… according to survey results from Robert Half & Associates, over 36% of employees are willing to quit a new job in the first 90 days if they don’t find their onboarding satisfactory. This pummels team continuity and your employee loyalty suffers. It’s hard to build a cohesive team when your existing team is overworked and new staff members are flying through a revolving door. The outcomes of this type of capacity management are many and disastrous for any business.
Overworked Existing Staff + Improper Onboarding of New Staff = Mistakes
And this formula leads to unhappy customers who will seek out your competitors, make fewer referrals and in the end, cost you business. It’s important to slow down and do onboarding right. Hire during your off-season and take the time to orient new team members the right way.
How Do You Know When To Hire?
Proper capacity management requires an objective look at the current amount of work to be done, the dollars in the budget and your forecasted demand. It’s important to consider your sales figures over the entire year when determining the makeup of your talent bench. Also keep in mind the symmetry between sales staff and administrative staff. Adding agents to handle increased sales volume has a direct affect on the admin staff who will be processing additional paperwork.
Kevin and Brian discussed that symmetry, as well.
How do you build a solid talent bench without overextending yourself?
The first step is to gather data on your annual projected volume. Grab your goals for next year and let’s get started!
Take this quiz to determine your hiring needs:
- Based on the average selling price of a home in your area, how much do you earn per transaction closed?
- What is your projected annual Gross Commission Income?
- How many transactions will it take to achieve that GCI?
- If projected agent volume is 4 closed transactions/month, how many more agents do you need?
- If projected Transaction Coordinator volume is 40 transactions/month, how soon will you need to add a TC or assistant?
- What’s your lead time to make a hire? Based on WizeHire data:
Agents: 1-3 months
Transaction Coordinators: 2-3 weeks
With your goals in mind, you can now back your way into your staffing needs. How many agents do you need to bring on to handle your projected volume of sales? Note that it could take 1-3 months to locate and hire a new agent. This is another key reason to not delay hiring even one more day!
How many Transaction Coordinator’s will you need to handle the paperwork those new agents generate? Yes, the time to hire an effective TC is a bit less than an agent IF you’re will to do some training. Great TC’s don’t get that way overnight. The ideal hiring flow for a TC is to bring them on to assist a TC, learn the ropes for a month or two and then be ready to rock as your new agents come on board and get up to speed.
Your projected annual sales volume should be the driver when you consider your staffing needs. Don’t get trapped into making seasonal real estate hiring decisions based on emotions. Look at the big picture and hire smart. Allow yourself and your new staff members proper training time and create a well-oiled machine so busy season is a breeze.