Recruiting more agents is the biggest challenge facing real estate brokerages seeking to boost profits, according to a survey of nearly 200 U.S. real estate brokerage and franchise executives.
About 2 in 5 (42 percent) of the real estate execs polled by real estate marketing software firm Imprev Inc. said signing more agents was their biggest challenge to “driving higher profitability.”
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But nearly as many — 39 percent — identified the costs associated with running a brick-and-mortar office as their biggest challenge to growing profits, followed by commission splits with their agents (37 percent).
Other factors included support staff costs (31 percent), the need for more top producers (24 percent), the impact of discount brokers (22 percent), technology costs (18 percent) and market share (16 percent).
Asked to pick the three biggest competitive challenges when recruiting agents, survey respondents were most likely to identify commission splits (49 percent said competitors offered a better split), agent costs (46 percent said competitors offered lower costs), and market share (23 percent said competitors had more market share).
But 22 percent said signing bonuses offered by competitors were a big issue, and 21 percent said competitors offering more leads was a challenge.
Marketing support that competitors provide agents was cited by 16 percent as one of the three biggest competitive challenges in recruiting top talent. Only 15 percent said competitors having better brand recognition was an issue, and competitors offering better technology was cited by 10 percent of respondents.
Factors that were not seen as among the three biggest competitive challenges in recruiting included mentoring (9 percent), employee benefits (7 percent), facilities (6 percent), culture (3 percent), reputation (3 percent) and leadership (2 percent).
Asked to identify the three biggest business challenges in recruiting top talent, just over half (51 percent) of the executives surveyed from May 22 to May 31 said they were not attracting enough younger agents.
Not being able to devote enough time to recruiting (44 percent) or get top agents to apply (36 percent) were the next most cited business challenges for recruiting.
But 33 percent said there were “too few quality prospects,” and 27 percent said they had trouble finding prospects that fit their firm’s culture.
In an open-ended survey response, one exec wrote that the biggest challenge “is hiring managers who can recruit; many are good ‘deal doctors,’ but weak recruiters.”
Agents themselves — particularly older ones — are often resistant to change, another respondent said.
Improving conditions in many housing markets may also be hindering, rather than helping, some brokers’ recruiting efforts.
“Top agents are suddenly too busy with the upswing in the market to meet and discuss opportunity,” one survey respondent said.