Three years ago, you hired a promising new agent and introduced him to your firm. You taught him everything you could, helped him build a client base, and walked him through every step of that tough second year. By year three, things have leveled out. He's making decent money, supporting his family, and doing well in the business.
Proud of his progress and satisfied you've set him up for continued success, you turn your attention to a new protégé, and then, your top-producing agent drops a bomb: He's been offered a better commission split at a new broker firm, and he's leaving.
We've all heard stories just like this — perhaps you've even lived through such an experience. It's frustrating, to be sure, especially when you've invested a lot of time and resources into mentoring an individual. But it's critical to identify the reasoning behind the resignation.
He told you it was about the money, and maybe it was on some level, but agents switch firms for a variety of reasons — from a lack of tech support to inner-office drama to stagnation in growth. And studies show that commission rarely cracks the list of top five reasons.
What Went Wrong?
Agents often cite money as the main reason behind their resignation because it's easier than admitting they feel mistreated by a staff member or that they believe all the good leads go to "favorite" agents. Often, firms don't even realize the risk of losing an agent until it's too late. Internally, though, when agents walk through your doors every morning, they ask themselves: "Does this company put my interests first, or am I just here to make it money?"
At the core of any retention or recruiting problem is trust. In a business where agents are hired as independent contractors who can leave — or be let go — at any moment, agents need a compelling reason to stick around. This is especially true when other brokers start noticing their success and try to recruit them.
If the company culture is undefined or agents are more commission-driven than relationship-driven, it becomes all too easy to forget how the firm supported them through their learning years. And when management turns its attention to fledging agents, it can unintentionally send the message that they're old news now.
Creating a Culture of Trust
I won't lie and say we've got it all figured out at Windermere Group One, but we do our best to make sure agents have a lot to think about before they walk out our doors.
We've developed a pretty unique approach: Agents who meet the required production qualifications are offered the opportunity to become a partner and shareholder in the company. This makes them eligible for dividends from the company profits, as they basically become a part-owner. We look to bring on partners who aren't just profit-driven, but who also want to help build a sustainable company.
We've seen this approach change our agent-broker relationship in three major ways:
1. Agents are more involved. Our partners help form office policy, recruit and mentor agents, support company functions, and cultivate company culture. They are asked for input on important decisions, and when they have concerns, we empower them to bring them forward.
2. Agents stay — and bring on more agents. Because they know that retaining agents and bringing on new ones helps the bottom line, our partner agents have a stake in making sure we get — and keep — other agents. This sort of buy-in helps prevent knee-jerk reactions that sometimes lead to agents leaving. Problems with staff, frustrations with specific policies, or similar issues become less significant because they have the greater good in mind and, again, have the voice to share those concerns publicly.
3. Agents are empowered. Before agents become shareholders, we take time to clearly explain the risks, responsibilities, and rewards of such a decision. Once they buy in, they become bona fide small business owners. Rather than being left at the mercy of the owner's whims, they have a stake in their own future. There's a sense of pride, ownership, and respect for the company and other shareholders.
Providing ownership to our agents has been one of the best decisions we've made. We sleep better at night knowing that our top producers will think twice before leaving, and our agents benefit from the co-ownership role. All in all, it's a win-win deal.
Jeff Thompson is managing partner at Windermere Group One. WGO is a member of Windermere Real Estate, a real estate network comprised of 300 offices and more than 6,000 agents throughout the western United States. Jeff is truly passionate about helping build companies by building their people. He leverages his 25-plus years of experience in real estate to coach other managers and brokers. Jeff credits much of his success to hard work and a willingness to partner with good people.