This is the second story in Recruiting War ’24, a multi-part series exclusive to Intel subscribers on how brokerages are poaching and retaining top agents in a down market. Read the first installment here, and stay tuned for future stories — all of which are available through your Intel subscription.
“When the market slows down, it becomes more competitive.”
When Kamini Lane, president and CEO of Coldwell Banker, said this, she was talking about more than just the fight for listings. The hunt for real estate talent was front and center on her mind as well.
“When the market contracts, the cream rises to the top and the best agents are the ones who are going to get the fewer listings [that remain],” Lane recently told Intel. “Because of that dynamic, we naturally look for the better and best agents.”
Over the last two years the market did indeed contract, and Lane’s remarks hint at a fundamental adaptation many companies have made in response.
As the first installment of this series argued, the importance of headcounts — once ubiquitous barometers of brokerage success — have faded. Instead, companies are now focused less on numbers and more on “the better and best agents.”
For the second installment of this series, Intel spoke with industry leaders like Lane. These conversations confirmed that a shift has taken place. Quantity is out, quality is in, and competition is fierce.
But that’s not all.
Not only is competition more intense today, but — according to the findings of the March Inman Intel Index survey — recruiting top talent has now grown into the single biggest challenge many industry leaders face today.
Here’s what industry leaders are doing to cope.
How brokerages find agents
Overwhelmingly, industry leaders who spoke with Intel echoed Lane’s comments about seeking quality agents. They tend to find quality agents via both organic contacts from agents as well as direct outreach.
- Compass: Rory Golod, president of growth and communications at Compass, said the “number one channel” for finding and recruiting new talent “is agents who get introduced because of other agents.” However, Compass does have a large team focused exclusively on recruiting.
- “That group is a little over 60 people, and then 30 to 40 or so who support that function. About 100 all in.”
- EXp Realty: This massive virtual brokerage maintains an internal growth team of 10 people, but is looking to double that number, the company said. Michael Valdes, chief growth officer at brokerage, told Intel that the company has primarily grown via agents reaching out to colleagues.
- “Up to this point it’s been almost always organic growth,” Valdes said.
- EXp has seen a recent uptick in agents reaching out directly to the company about joining.
- Coldwell Banker: Lane told Intel her company doesn’t “have a big outside recruiting team that brings agents in.” Instead, the company tries to “match each recruit to their local office leader.”
- Local leaders do a significant amount of the heavy lifting when it comes to finding new Coldwell Banker agents.
- “We always have inbound interest,” Lane added. “We have a form on a website. We get an enormous amount of interest through that website.”
- Coldwell Banker Warburg: Kevelyn Guzman, regional vice president of Coldwell Banker Warburg, told Intel that her company proactively scouts agents via “networking events, industry conferences, or direct outreach.”
The big draws
Companies have prioritized everything from revenue share to technology in their efforts to stand out and attract talent.
- RE/MAX: Ben Fairfield, vice president of recruiting and retention at RE/MAX, told Intel that agents joining his company are looking for technology, brand awareness, and educational resources. Top producers generally want to work with other top producers, he said.
- “Eagles don’t land in a duck pond. One of the biggest reasons we see people coming here is they want to be associated with the best of the best.”
- Compass: Golod, reiterating a point Compass has made before, said, “the biggest takeaway is our technology platform is really what is driving our growth.”
- EXp: Agents are drawn to eXp for both the technology and culture, according to Valdes. But the company also operates several different incentive programs in addition to its long-running revenue share and equity benefits.
- The Boost Program provides financial incentives to teams and brokerages, the Thrive Program directs equity benefits to team leaders, and Accelerate is designed to help agents maximize revenue share earnings during their first year at the company.
- Coldwell Banker: This company does offer incentives to new agents, though Lane said those incentives are deployed on a “case by case basis.”
- “There are very real switching costs, going from one brokerage to another. I think it’s important to make sure the investment is mutual.”
Competition is stiff — and getting stiffer
The first installment of this series noted that many agents themselves are fielding constant recruiting inquiries. But the March Inman Intel Index survey also shows the flip side of that story: Recruiting is a major battleground for brokerage leaders.
- Recruiting is brokers’ biggest concern: Among brokerage leaders who responded to the survey, 23 percent said recruiting and retention is “the most challenging part of today’s business environment.” That beat other responses such as interest rates (20 percent) margin compression (17 percent) and regulation (17 percent). (The “other” option tied with recruiting and retention. But respondents selecting this option also provided free -response answers, and those varied significantly — meaning recruiting and retention ultimately garnered the largest share of responses).
Credit: Jim Dalrymple II
- Asked about the difference between recruiting and retention, 50 percent of respondents indicated that recruiting is the bigger challenge. Only 15 percent selected retention.
- Brokers see the competition becoming stiffer: Asked how recruiting might play out over the next 12 months, a plurality (38 percent) said it would “get harder.” Fewer than a quarter of respondents thought recruiting would get easier over the coming year.
Credit: Jim Dalrymple II
- Headcounts have stalled: As Intel previously reported, once fast-growing companies such as eXp have seen headcount growth slow or reverse. The March survey suggests this is a widespread phenomenon; a plurality, or 47 percent, of brokerage leader-respondents indicated that their headcounts are the same today compared to 12 months ago. Only 26 percent saw headcount growth over the last year, while nearly as many (22 percent) indicated that headcounts are lower.
Credit: Jim Dalrymple II
- But brokers are still optimistic: A plurality of brokers (43 percent) also believe their head counts will grow over the coming year.
Credit: Jim Dalrymple II
Ultimately time will tell if, despite increased competition and an array of other disruptive factors such as sweeping commission lawsuits, brokers actually can grow their ranks over the coming year.
Intel will continue this deep-dive look at agent recruiting next month.
