What’s a Realistic Recruiting Goal?

What’s a Realistic Recruiting Goal?

What’s a realistic recruiting goal?

I hear that question from brokers and managers all the time. And, it’s tough to provide an answer because so many factors can affect someone’s ability to recruit…

  • Agent population/turnover

  • Size of the brokerage

  • Skill level of the people involved with recruiting

  • Their available time

  • The competition

  • Recruiting history

And that’s just to name a few.

But, over the years, I’ve found two factors matter the most: recruiting history and agent population/turnover.

So, let’s talk about those two factors and how they can affect your recruiting goal.

Recruiting History

Recruiting goals for brokers are like production goals for agents.

Imagine you’re talking to one of your agents who consistently does five or six deals per year…

What would you say if she told you she wanted to increase that to 30 deals next year?

I’m betting you’d tell her that type of leap would require a substantial investment of time and resources.

And, in the back of your mind, you’d probably think her goal wasn’t all that realistic (even if you admired her ambition).

Now, let’s imagine you’re talking to that same agent, but this time she expresses a desire to double her production next year.

Going from five or six deals to 10 or 12 deals is well within the realm of possibility.

I’m sure you’d recommend a few changes to her business, but she wouldn’t need to do anything drastic.

The larger the gap between an agent’s historical production and her goal, the less likely she hits it without investing substantial time and resources.

The same is true for recruiting.

The larger the gap between your historical recruiting numbers and your goal for next year, the less likely you hit it without investing substantial time and resources.

Agent Population/Turnover

OK, so let’s assume you feel your recruiting goal is realistic given your history.

Now, you must look at the agent population and turnover in your market (or markets if you have multiple offices).

Finding the agent population is straightforward. All you need to do is find the total number of agents who exceed your minimum production requirements.

You can typically do this through an MLS search, but it’s much easier if you have a program like BrokerMetrics.

Finding the average agent turnover in your market is a bit trickier than just getting the agent population.

If you don’t have a way to calculate turnover yourself, you can use the numbers we’ve compiled over two years of research, across 25 markets, and covering more than 16,000 agents.

We found between 5% and 10% of producing agents (~$2MM in volume or more) per year switched companies in more than two-thirds of the markets we examined.

Only four markets had turnover rates higher than 10%, and none of them had turnover rates higher than 15% (two markets had turnover in the 4% range).

And, we did not find a single brokerage recruited more than half the agents who switched.

So, before you set your recruiting goal, you must:

  1. Calculate your agent population.

  2. Multiply it by the average turnover rate.

  3. Divide that number by more than half.

As an example, let’s say you have 500 producing agents in your market.

We’d expect no more than 50 of them to switch companies next year (500 times 10%). And, we’d expect you to recruit fewer than 25 of the agents who switch.

So, before you set your recruiting goal for next year, examine both your recruiting history and the agent population/turnover in your market(s).

Drew

 

P.S. - It doesn’t matter whether you examine your recruiting history first or whether you check agent population/turnover first. If you want to arrive at a realistic recruiting goal, you need to factor in both.

Also, our data on turnover only covers producing agents. If you recruit new agents or less productive agents, you would need to use different turnover numbers. And, unfortunately, we don’t have those numbers available.

 

It’s Recruiting Season…Here’s What to Do

It’s Recruiting Season…Here’s What to Do