RISMEDIA, May 23, 2009-Continuing our May Viewpoints series, this week, Cabot L. Jaffe, AlignMark’s President and CEO, takes the stage, offering his advice on why it is crucial to have a quality recruitment and hiring process in place so that you surround yourself with agents who are passionate about the real estate industry.
Cabot L. Jaffee
President & CEO
Until the last few years, quality recruitment and hiring processes for agents was not perceived as an “A” priority by all brokerages. In the prior boom market, many less-than-highly skilled agents were able to succeed-and even prosper. But that situation has dramatically changed. In difficult markets, fewer agents will succeed and quality recruitment and hiring processes are now needed more than ever. This is illustrated in AlignMark’s recent study of 290 agents hired in Q1 of 2008 by a national real estate brand.
During the recruitment process, each of 290 prospective agents completed AlignMark’s Real Estate Simulator (RES) assessment and were subsequently hired. (RES is an online, video-based job simulation assessment that measures sales skills, cognitive ability and job fit factors). Some hiring managers gave RES results considerable weight in their selection decision, but others did not-therefore, RES scores ranged greatly across the 290 new hires.
What they found was that:
-RES assessment results correlated significantly with actual sales results. After 90 days as an agent, sales performance measures for agents scoring “high” on the RES assessment were 278% greater than those who scored “low.”
-Had only high-scoring applicants been extended offers, the brand would have recognized an additional $991,200 for the year-based on productivity differences of “high” and “low” scorers on the RES assessment.
-New hires were an interesting mix of experienced and inexperienced agents-approximately 50%-50%. However, measures of sales performance for the two different groups were not significantly different.
So what does this mean? That good selection tools consistently provide a ROI that far exceeds cost in both good markets and bad-perhaps even more so in bad markets. Prior experience cannot be assumed to equate to greater production-inexperienced, but skilled and motivated talent will also succeed and may be easier and less costly to procure.