How Brokerages Are Tackling ‘Bait-andSwitch’ Recruiting and Poaching By Liz Dominguez
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he recruiting game has often been high stakes, with real estate brokerages looking to attract the industry’s top-performing agents and teams in order to build a powerhouse office (or series of offices) that can not only compete with local brokerages, but also communicate the value to consumers. But what about retention? If brokerages are solely focused on attracting new business, they risk losing the stronghold they worked so hard to build. “Recruiting has changed in the past 10 years to look more like mergers and acquisitions, with companies acquiring agents with signing bonuses or stock options or things like that,” says Joe Rand, chief creative officer of Howard Hanna | Rand Realty. But according to Rand, many of these efforts are often temporary if brokers are not mindful of agent satisfaction. 56 December 2021 RISMedia’s REAL ESTATE
“The problem is that you never actually ‘buy’ an agent’s business, you only ‘rent’ it,” says Rand. “And when that ‘lease’ is up, you leave yourself open to the risk of having to re-lease that agent’s business again or face them going to the highest bidder.” Poaching or Attracting? Brokerages Straddle the Line Agent attraction strategies have changed drastically, with traditional methods still in use, while a larger focus is on dollar signs. As Rand mentions, brokerages with the available financial backing are offer-
ing “easy-cash” incentives such as sign-on bonuses, stock options and atypical commission structures. Rick Haase, president of United Real Estate, had a front row seat to these recruiting strategies, with Compass laying claim to 15 of his agents after moving into the local marketplace. “They basically said ‘here’s a sign-on bonus.’ But it’s not a sign-on bonus. It’s structured as cash flow to the agent, but they have to work a number of years to be able to qualify to keep that money,” says Haase. Michele Harrington, COO of First Team Real Estate, had a similar experience with Compass, and has witnessed other brokerages such as Coldwell Banker implementing comparable strategies. “When Compass first came into our market, they paid a lot of money to entice some of our top agents to leave,” says Harrington, adding that her agents had to sign longterm contracts when making the move. “We kept in touch, and most of them feel they were definitely overpromised but did not want to return the money, and had harsh clawback provisions,” adds Harrington. “We did have a team leave that was there for maybe 60 days and was so disenfranchised that they did return all the money and come back,” she says. Compass, however, pushes back against this notion, holding firm that the brokerage has agent support in mind when implementing its recruitment and retention strategies. “Agents join Compass because we help them grow their business, serve more clients, save time and stand out as trusted advisors in their markets,” a Compass spokesperson tells RISMedia. “Our agents close an average of 19% more transactions after joining Compass and sell homes in 21% fewer days on average than their peers. This is one of the reasons we have a principal agent retention rate of over 90%.” As tensions rise amid a difficult
