Hiring For Your Real Estate Business
The most recent episode of Middleton Elite Coaching’s ‘Thought Leader Friday – Expert Coaches Series’ featured MEC Real Estate and Business Coach, Zack Bonczek.
Zack shared with us his experience in hiring for your real estate business. In this article (and associated video), he covers The When, The Who, and The How of hiring, and also provides actionable exercises and useful tips for recruiting.
Let’s launch right in…
The number one question that we at Middleton Elite Coaching get about recruiting is:
“How do I know when it’s the right time for me to make my first (or next) hire?”
Whether you are an individual agent or part of a team, you probably find that you are either in need of additional time or additional money.
If you’re doing all that you can do for your business and you still cannot get it all done, it’s probably time to hire.
Many real estate agents and real estate teams find themselves concerned about the expense of hiring for their businesses.
Here at Middleton Elite Coaching, we approach this financial decision a little differently.
Hiring is An Opportunity For Your Business
Let’s imagine you hired somebody to do the things you spend a lot of time on and that are less dollar productive for your organization. How many more transactions would you estimate you could do on a monthly basis if you had that help?
In this example, we’ll be conservative and call it one additional transaction. Let’s assume that the average sales price in your market is $400,000, and your commission is 3%.
If you had someone on your team to do the things that you spend a lot of time on, you could potentially bring in an additional $12,000 per month.
For the sake of this example, we’ll estimate that this additional team member will cost your organization roughly $5,000 per month. In this scenario, you could potentially net an additional $7,000 per month. Rather than viewing hiring as adding an expense to your business, try thinking of it as buying opportunities for your business.
On the flip side, if you didn’t hire somebody and you did not add the additional transaction per month, you could argue that it is actually costing you $7,000 per month to not have this person.
Additional revenue-generating opportunities can be created by adding leverage for your organization.
Time and Money are Both Commodities
Many of our clients are looking for more work-life balance, and others are looking for the opportunity to do more deals. Whether it’s more time and money at home or more time and money for your business, the desire for more time and more money is likely prevalent.
We encourage you to start small by adding layers of leverage to your personal life. This may be someone to prepare meals for your family or someone to clean your house so that you don’t have to.
If adding leverage helps on the personal side, try introducing layers of leverage to your business to see how your productivity increases. You may start by hiring an executive assistant to take administrative tasks off of your plate. You may add leverage by hiring a marketing coordinator to handle the more time-consuming marketing strategies for your business.
When the need for more time and more money presents itself, it is time to make your next hire.
Once you have decided that it is indeed time to hire, your next step will be figuring out WHO will be the best addition to your organization.
Evaluate your bandwidth and the bandwidth of your existing team members.
Begin by making a list of all of the things (tasks, meetings, efforts, etc.) that you are involved with on a daily basis. If you have team members, make the same list for them.
You can use these lists to evaluate the tasks that can be delegated to someone else; ie. The WHO for your organization.
The 4 Quadrants Exercise
Middleton Elite Coaching uses an exercise called The 4 Quadrants Exercise with our Clients to assess where they currently are and where they think they need to be in order to add value, growth, and a higher level of success to their businesses.
For this exercise, you’ll start with a blank piece of paper. Now draw a big plus sign in the middle of the paper to create four quadrants.
- Draw a plus sign + in the upper left quadrant
- Draw a minus sign – in the upper right quadrant
- Draw a multiplication x sign in the lower left quadrant
- Draw a division sign ÷ in the lower right quadrant
Reference the list you made earlier to evaluate the tasks that you and your team members are currently doing on a daily basis. In each of these quadrants, you’ll list the tasks that:
- + Add to the success of your organization
- – Subtract from the success of your organization
- x Multiply the success of your organization
- ÷ Divide the success of your organization
You should be putting your personal effort into the things that either add to or multiply the organization and give away the things that subtract from or divide.
Defining The Role
When creating an outline for the WHO for your organization, there are key elements that you should look for in order to ensure job satisfaction and retention for years to come.
Three key elements you will be looking for in an individual are:
- An individual who is willing to do, and enjoys doing, the responsibilities outlined in the description of the role
- An individual who aligns with the core values of the role and the organization
- An individual who is a good personality and behavioral fit for the leader of the organization
A clearly defined role is an essential part of creating job satisfaction.
When creating a job description for your next hire, you will want to be clear about the role of the person WHO will add leverage to your business. The responsibilities of the role should include all of the things that subtract from or divide the success of your business. This role will also consist of the things you don’t enjoy doing, don’t want to do, or are not worth the time it takes you to do them (not dollar productive).
To help define the additional responsibilities of this role, we use an exercise called The 3 Columns Exercise.
You’ll begin this exercise by creating three columns on a piece of paper or a whiteboard.
- In the first column, you’ll list the things you enjoy doing, are dollar producing, and you do well.
- The second column is used to list the things that you only mildly enjoy doing, are only somewhat dollar producing, or you are willing to delegate to another person if the need arises.
- The third and final column should be a list of the things you are not good at, don’t enjoy doing, or are not dollar productive for your business.
The 3 Columns Exercise can help you determine the tasks that can be or need to be given away. By working primarily out of column 1, and delegating the tasks in columns 2 & 3, we can ensure that everyone is doing the work that they most enjoy. You are also allowing the people in your organization to work for their highest and best purpose.
Levels Of Talent
When recruiting for our organization, we segment candidates into three levels of talent; potential talent, emerging talent, and proven talent.
Potential Talent –
This is someone who has never done the job before or is perhaps is newer to the business. You view this individual as having the potential to be successful in the role. Someone with a potential level of talent has a big opportunity for growth within the organization. They’re generally going to require a lot of training and development early on. The potential level of talent is easiest to recruit because most people are looking for either emerging talent or proven talent. Additionally, the compensation of someone with potential talent will usually be less than someone with emerging or proven talent.
Emerging Talent –
This is someone who has done the job before, possibly only for a little while. Someone with emerging talent has a track record of success in this type of role and they require only minimal training. The emerging talent will typically be a little more difficult to recruit than potential talent, and will typically require a little higher compensation.
Proven Talent –
This is someone experienced with an extensive background in this particular role. Someone with proven talent can quickly plug into your systems and into your organization. Proven talent is usually the most difficult to recruit, and typically requires a more favorable compensation plan or a more favorable opportunity in the future.
Recruiting talent at the appropriate level requires a clear understanding of the WHO that is needed within your organization.
By this point, you know you need to hire somebody and you think you have figured out who you need for your organization. It is now time to execute on hiring for your real estate business.
It is critical that you do not take shortcuts in hiring. Allow yourself to move through all of the necessary steps of the process in order to be really successful at recruiting the right person for your organization.
One process we use to recruit top-level talent is the 10-5-3-1.
Here’s the setup –
The 10-5-3-1 Process
10. You begin with 10 resumes of people who fit the job description of the person you are looking to hire.
You can find these 10 resumes by:
- Reaching out to your sphere of influence and the people you know
- Use an online recruiting platform such as WizeHire (see MEC’s WizeHire partnership discount)
Reaching out to your sphere can sometimes mean receiving the resumes of friends, family members, or acquaintances. Hiring by a model such as 10-5-3-1 will allow you to put these resumes through a pre-determined process so that you don’t feel compelled to hire a friend or family member if they are not a qualified fit for the position.
Once you have gathered 10 resumes of qualified individuals, you will schedule quick, 10-15 minute phone interviews to discuss their prior experience and qualifications for the role.
5. From these ten interviews, you’ll narrow down to the best 5 candidates.
With your best 5 candidates, you will schedule in-depth interviews. These interviews are generally about an hour long and will allow you to ask them questions to determine if they would be a good fit for the organization as a whole.
Many of our clients will issue a personality assessment, such as a DISC, to get a better picture of a candidate’s work style and how their personality may fit into the team. An in-depth interview is a great place to discuss and validate the results of such assessments.
3. From the interviews with the 5 best candidates, the search is narrowed to the top 3.
The top 3 candidates will be those who stood out to you the most in the in-depth interview process. You may want to meet the top 3 candidates face-to-face to discuss the specifics of the role as well as their desired level of compensation, their ideal environment, and where they see themselves within your organization 1,5,10 years into the future.
Ask yourself three really important questions about each of these candidates.
• Can I see myself doing business with this person long-term?
You’ll want to make sure that this person has demonstrated that they have the behavior and work ethic you are looking for.
• Is there potential for longevity with this person? Can I see myself doing business with them forever?
Determine whether or not this person has a personality that you enjoy. It’s a great time to decide if you would like to work closely with them every day.
• Am I willing to take a financial risk on this person for my business?
This person will have to demonstrate the qualities of someone that you would be willing to bet your business on. The answers to your questions should give you a high degree of certainty that this person could fit well into your business within the next 30, 60, or 90 days.
After asking yourself these three questions about your top three candidates, you’ll likely have one that is the best fit for the needs of your business.
1. Congratulations! You have found your next hire.
Hiring By Process, Not Out Of Desperation
Many agents have been in situations where they have hired from their gut and got lucky, or have hired from their gut and it didn’t work.
Hiring by a process will help you be certain that you are making the best possible decision in hiring for your business.
If you have put every applicant through the same process, you can be sure that you took every step possible to find the best fit for your role; regardless of their level of talent or whether or not the applicant is a friend or relative.
We love being involved in our client’s successes. Whether helping them to find more time or to find more money, we want to help them build a great organization.
The biggest piece of advice we can give to our Clients or anyone in the process of hiring is to trust the process. Be patient with the process you have created. This process exists for a reason. Stick to it and the rest will come.
Bill, Debbie & Zack
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