Real estate careers epitomize the American dream—those willing to work hard can build success, be their own boss, and reap significant financial rewards. Generally, sales associates are independent contractors, and brokerages are independently owned and operated even if affiliated with a franchise brand. In the U.S., the entry threshold for sales licensure is low—complete class(es) and pass a state test, and you immediately can represent buyers or sellers in complex transactions involving their most important, and often largest, financial asset. Smart new sales associates recognize that obtaining their license is just the start, and immediately seek additional learning and professional development opportunities to make their dream a reality.
Sales associates choose a broker to work for based on a broker/ owner’s reputation, brand quality, referral, visibility in the market, online presence, and most importantly, the training and ongoing support provided. Depending on the data source, between 75 and more than 85 percent of new sales associates fail in real estate. With those odds, sales associates need every edge available!
Conversely, broker/owners focus first on growth via recruiting sales associates—a mix of new licensees and experienced agents attracted from other brokerages. To engage new talent, they must offer an environment with a winning culture, knowledgeable support staff, and resources to help associates build their independent business, including training and technology. Brokers train new agents via on-the-job, classroom, and online training; mentoring; and ongoing support or troubleshooting.
Identifying High-Potential Sales Managers
After successfully operating single-office companies, many brokers choose to open additional offices. Others choose to grow their single office and turn over day-to-day sales management to another leader so they can concentrate on new services offerings or other aspects of their business. In either case, it’s critical to identify the right person to lead the office and continue, or expand upon, current success. The sales manager/agent relationship has the greatest impact on individual and office productivity and success. Where do brokers find good sales managers?
Ah, there’s the rub. The industry lacks resources for identifying high-potential candidates for the essential role of sales manager. Smart brokers do not want to take top producers away from sales, nor do top sales associates want to earn less or be constrained by the structure inherent in a managerial role. A few brokers have hired experienced, non-real estate sales managers, but such managers may struggle to earn respect from agents.
Leadership Talent Assessment
Real estate sales managers are our industry’s “front-line supervisors” with insufficient development resources and training not tailored enough for real estate. There are extensive resources for sales associates and broker/owners but too few resources for these managers who play such a critical role. Leading Real Estate Companies of the World (LeadingRE), a network of more than 500 premier global, independent real estate brokerages, recognized that identifying and hiring high-performing sales managers was a significant, ongoing challenge and set out to find better ways to identify and cultivate leadership talent to meet this serious and growing need.
In partnership with The Staver Group, LeadingRE conducted a performance benchmark study to create a tool for identifying, coaching, and developing top sales managers. The first step was creating a focus group to develop trait criteria and to engage a sample group to validate the criteria across the network. The focus group included brokers of all sizes who built consensus on performance criteria. The Harrison Group, an expert assessment developer, scrubbed the data we collected, validated it, and generated the results.
The main criteria surround three key pillars:
1) Culture
2) People Development
3) Financial Growth
We tested nearly 300 real estate sales managers at 60 companies from three performance groups, identifying traits with significant relationship to sales manager job performance. The Harrison Group validated these essential traits and created a “suitability score,” which identifies a potential level or fit for the sales manager role. Our brokers use this exclusive assessment tool as part of the hiring/selection process and as a development/training tool. LeadingRE staff has been trained to interpret, communicate, and coach to assessment results.
The assessment has shifted the way our brokers develop and recruit leadership talent. Immediately, numerous brokers ordered assessments for everyone on their senior management teams as a way to gauge if the “right people are on the bus and in the right seats.” Numerous companies have pre-purchased bulk assessments to utilize in hiring and selection of new sales managers, and 100 percent are reporting significant improvement in hiring “right” with less early attrition. Utilization of the assessment tool has doubled in less than a year.
MAESTRO Leadership Certification
We utilized the study results to create a new sales manager development program, MAESTRO Leadership Certification, piloted with 25 sales managers from June to December 2015. MAESTRO consists of three in-person, interactive three-day workshops covering the three “pillars” of great real estate leadership— culture, people development, and financial growth—with a robust, relevant agenda. Taught by a diverse team of real estate industry leaders led by LeadingRE Chief Learning Officer and leadership coach Mike Staver, the six-month program includes the behavioral assessment tailored for sales managers, homework and interim Webinars between sessions, pairing with an “accountability partner,” and extensive reference materials, all designed to empower MAESTROs to apply what they learn to create effective, tangible outcomes. Attendees of the “beta” program gave rave reviews in evaluations and regularly post stories about what they now are doing differently and their results via a closed group on Facebook.
We collected key performance indicators from the pilot attendees and will compile year-over-year comparisons in third-quarter 2016 to measure the long-term impact of the training. To meet demand, we are offering two MAESTRO programs in 2016 for managers, which include an applicant approval process. We will continue to evaluate and enhance the training, add value, and measure results going forward. Our experience proved the level of success that can be achieved when you recognize a universal development need and create multiple solutions utilizing one, albeit complex, research set.
