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It’s age-old business advice — hire slow when times are good, and fire fast when they’re turning sour.
But it may not always be good advice for a real estate brokerage, where every round of support-staff layoffs runs the risk of spooking agents and even scaring them off, according to broker-owners who spoke Thursday at the Inman Connect real estate conference in Las Vegas.
“If you’re letting go of a ton of people, it means you’re poorly managed, in my opinion,” Thad Wong of @properties Christie’s International Real Estate said.
As home sales decline, a brokerage’s staff will naturally find fewer tasks on their desk related to accounting or contract administration. But instead of laying off those workers, Wong said it’s often better to shift them to new useful tasks that serve the agents.
“You could improve your services to the agents, which is what they really need to feel empowered, by organizing their database,” Wong said as an example.
Still, for some brokerages, the need to cut costs during a downturn may be unavoidable.
Nina Dosanjh of Vanguard Properties said broker-owners can prepare for tougher economic times by conducting a complete audit of their technology stack, to make sure the business is fully utilizing the services for which they’re paying their vendors.
“You can have a vision and sell a product,” Dosanjh said, “but if you are not bringing value, then you’re on the chopping block.”
The panel session, moderated by this publication’s founder Brad Inman, explored various ways that broker-owners can prepare for a slowdown in real estate sales.
For Dosanjh, it’s important to not lose sight of the importance of quality personnel training. Without that, broker-owners can find themselves in an untenable position, she said.
“If your agents are looking to you for answers, and you don’t have the training for your staff and your support staff, I just don’t see how there’s going to be longevity for your business,” Dosanjh said.
Brokers shouldn’t fear a downturn, Wong said. His business is down 20 percent from its recent pandemic-era highs, but it’s still “significantly better” than it was in 2019, he said.
And when a broker sends a message that he or she is afraid — such as by laying off a significant portion of the staff — it can send the wrong message to the agents, he said.
“[That’s] probably the worst thing that you can do during a period where agents are already feeling concerned, and it just helps [fuel] the perspective of doom and gloom,” Wong said.