Slowing markets and crowded brokerages have shifted the focus from quantity to quality, new reports and Intel findings show. For agents, this is an inevitable aspect of work these days.
This is the first story Recruiting War ’24is a multi-part series available exclusively to Intel subscribers about how brokerage firms poach and retain top brokers in a down market. Stay tuned for future installments and subscribe to Intel today.
As the summer of 2022 comes to a close, eXp Realty has shared some news: The virtual brokerage has just recruited its top team from Keller Williams and RE/MAX.
About a month later, the Compass picked a top team in Rhode Island and continued to make similar headlines over the next year and a half. Meanwhile, Coldwell Banker, The Agency, Ryan Serhant’s agency and others are claiming success in recruiting top talent in the industry. In fact, Inman has published dozens of similar stories over the past two years.
These stories all have one thing in common: almost none of them mention the number of brokers. This is actually a big change. Not long ago, the most headline-grabbing headlines about hiring related to the growing headcount of companies like eXp. But last week, when Compass announced a major new acquisition, the brokerage’s press release didn’t even mention the fact that the company it was acquiring had thousands of brokers.
In other words, there has been a gradual but significant shift in the way the industry focuses on recruitment success in recent years. Today’s numbers are almost an afterthought — at least publicly — while brokerages work to tell a story about the issue. quality Their new recruits. Top performers. Top team. The first agent in the first market. That kind of thing.
This shift reflects a radical change and streamlining of the real estate market. But this also highlights a new chapter in the real estate industry where competition for talent is becoming more intense and the competitive environment is more crowded.
The result, our latest Inman Intel Index survey of 1,009 real estate professionals found, is that many agents are currently receiving near-constant recruiting inquiries.
Market slows, competition intensifies
So what exactly motivates companies to focus on their top performers rather than big data?
National Association of Realtors data shows declining transaction volumes in 2022 and 2023. Photo credit: Jim Dalrymple II
- More crowded: Collabra Technology CEO Russ Cofano said hiring is evolving as the market becomes more crowded. RE/MAX and later Keller Williams were first and second generation companies that relied heavily on recruitment and headcount. EXp is another one. But now other companies — Real Brokerage, Fathom Realty, LPT and others — are leveraging similar models to grow rapidly. So it’s not just that there are fewer agents, there are more companies competing for those agents on the same stage.
- “When that happens, they have to shift the external messaging to ‘Hey, don’t just look at our growth, look at who we got,'” Cofano told Intel.
EXp earnings report shows slower headcount growth.Photo credit: Jim Dalrymple II
- The latest crowding conditions are: OJO President Chris Heller told Intel that while serving as CEO of Keller Williams in the 2010s, “We didn’t really have any competition and we were able to achieve real growth at the expense of other companies.”
- Regarding the rise of growth-focused companies, Heller said, “Five years ago, six years ago we weren’t where we are now.”
- Compass has been instrumental in changing the narrative: While the number of agents continues to grow, it focuses relatively less on the numbers and more on the big names. Compass’ rise as the largest U.S. brokerage firm by trading volume has given it a major impact on the way companies hire and talk about hiring.
- “They’re all about quality and they never get involved in the PR cycle like agency growth because it’s not part of their job description,” Cofano said. “Compass has no interest in promoting agent growth for its agents.”
- “The more brokerages take a proactive stance, the more other brokerages will respond in kind,” Heller said.
The number of Compass agents gradually increases each season. For the fourth quarter of 2022, the company only reported annual average master agent numbers, not quarterly numbers.Photo credit: Jim Dalrymple II
Agents keep asking, but few pay attention to the phone
Intel will delve further into how broker leaders view this situation in a future installment of this series.
But at the same time, it is worth noting that the pressures and opportunities faced by agents are huge.
- Most agents are getting recruiting opportunities: an amazing 71% Brokerage respondents to the March Inman Intel Index survey said another broker had attempted to recruit them within the past 60 days. the most important is, Another 12% It said it had not made recruiting pitches in the past 60 days, but was the target of a recruiting campaign by a rival broker last year.
Photo credit: Jim Dalrymple II
- Brokers, not agents, are leading the way: Few survey respondents (0.6%) stated that, as an agent, they have contacted an agent within the past 60 days if they have not been recruited yet. In the vast majority of cases, agents who are not actively sought after will not actively seek to jump ship to a competitor.
- Recruitment calls come frequently: almost 19% of respondents said someone tries to recruit them at least once a week.other 32% Conduct fieldwork at least once a month.and 26% Requests are received at least once per quarter. Overall, more than three-quarters of respondents face many recruitment attempts each year.
Photo credit: Jim Dalrymple II
- Most recruitment attempts fall on deaf ears: The vast majority (90%) of survey respondents did not switch brokers last year, a trend likely to continue in 2024; almost 74% The agents interviewed said they “100% will not” change companies this year. The numbers suggest that more agents may be willing to switch this year than in 2023, but ultimately the near-constant hiring efforts don’t entice most agents to jump ship to new companies.
In the coming weeks, Intel will provide a more detailed analysis of the state of brokerage recruiting based on detailed questions in the Inman Intel Index and interviews with experts in the field.
Methodological Notes: Inman of the Month Intel index poll Taking place from March 20 to April 1, 2024.Invite the entire Inman reader community to participate, and Intel 1,009 replies received.Respondents to this poll They were directed to the SurveyMonkey platform where they self-identified their profile in the residential real estate market. Respondents were limited to one response per device, but there was no limit on IP address. Once a profile is selected (residential real estate agent, mortgage broker/banker, business executive/investor/proptech or other), respondents answer a unique set of questions for that specific profile.because poll There is no requirement for demographic information such as age, gender, or geographic location, and there is no weighting of the data.this poll Will be conducted monthly, with recurring questions and unique questions for each profile type.
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