A GLOBAL PERSPECTIVE
By Dave Hibbard – Dialexis
After engaging with Commercial Real Estate brokers for the past 30 years with cultures throughout the world, not much has changed in the way brokerage companies are developing new hires. New rookies continue to enter the CRE industry with little knowledge of where to place their bet. They just get an offer and say yes. They may conduct forward research, but the problem is they really don’t know what to research! They end up in a quandary; they wonder….Is it best to find a BIG brokerage firm that touts a strong training platform or is it best to seek out a small firm that would be able to provide more individual attention? It’s difficult for an outsider to know what to do, after all, advice is rampant and most of the time that advice is given by those who know little about this unique industry. In the end, the interested candidate doesn’t know if the best solution is the company they choose, the specialty division, the research capability of the firm, the training they offer, the small niche player organization or simply the firm with the biggest global footprint. They often end up selecting a brokerage operation because the interviewer told a better story then the competitor, but what’s really the best choice for both parties?
My answer has been the same for years; “find the firm with the best Mentor program” then find the best Mentor! It doesn’t matter to me if the brokerage company is small or global; the Mentor is the key factor. As I continue to train in the brokerage industry, and as I have done for decades, the greatest opportunity brokerage companies are missing is in the area of developing new talent. It’s a wide open path to future production, but few brokerage leaders are grabbing the chance to differentiate or re-structure their rookie development strategy.
Let’s look at the various models of how rookies are being developed in the CRE industry now. I have ranked them on what I am seeing in the industry, what leaders tell me, what rookies share with me, what senior brokers say and my years of experience in the business. You may disagree with what is listed, but if you can remain open rather than defend your model, you may see a new perspective. Here is my ranking and my opinion from worst to best rookie training approaches:
THE WORST: Bring the rookie in, provide self-study product knowledge, give them a desk and tell them to make lots of calls. Tell them If they need help all they have to do is ask. Assure them that’s how you did it and it’s the best way to make it in the business. Estimated success prediction and ‘stick’ rate is 10%.
WHY IT’S THE WORST: Bringing rookies into an organization to ‘figure it out’ by themselves is a disaster waiting to happen. The concept of, “all you have to do is ask for help” is pretty altruistic. MD’s and senior brokers are traditionally running hard to bring in revenue and may have little time to be there for the rookie – especially in the first 120 days, – which are the most critical. New hires with previous selling experience from outside the industry also have a high failure rate on this program. Brokerage is much too sophisticated and challenging to enter on a ‘make it on your own’ strategy.
THE NEXT WORST: Bring the rookie in, provide self-study product knowledge, and inform them that you are a player coach manager and fortunately they will be working closely with you. Assure them that you will teach them the business. Estimated success prediction and ‘stick’ rate is 30%.
WHY IT’S THE NEXT WORST: The answer is much the same as “the worst” approach. The Player Coach model leaves minimal time for the rookie. Think of it this way, the PC has to manage the office, dig for leads themselves, put together RFP’s, meet clients, prepare presentations, handle internal conflicts, attend meetings and..and..and! There isn’t a big space for developing a rookie despite having honest intention. What ends up happening is the rookie does their best to fill in the gap only to become frustrated and eventually leave.
BETTER: Bring the rookie in; tell them you have a “one for one–all for one” approach. Put them through detailed training with the organization’s ‘new entry training program’, then explain that they will be in a cube learning the business by prospecting and doing deals with free range. Assure them that any questions they may have will be answered by any broker they ask, because “we are a team.” They can receive commissions and will always be supported by senior brokers by simply asking for help. Estimated success prediction and ‘stick’ rate is 50%.
WHY IT’S BETTER: It’s better because of the simple fact that if the rookie scrambles hard, senior brokers will smell the potential to ‘get a deal.’ They will see a new candidate hustling and will latch on to support that rookie often due to self-interest to be bought into a deal. After all, if a new rookie is really after it with work ethic, they are bound to run into a deal somewhere! Certainly, there are those senior brokers who may help out of respect for the firm and the new rookie – if they like the guy! The key word is LIKE the GUY. Women have a much tougher road because they don’t have the ‘good-ole-boy’ system. So when women are brought into this strategy they may find themselves outside the circle of training attention.
MUCH BETTER: Bring the rookie in and advise them that they will be working on a specific senior team. That team may consist of 2 Senior Brokers that will be their direct report and perhaps one marketing assistant – all who will be ‘one team.’ They will be trained by the two senior brokers and will learn through a “doing” approach. Any questions, just ask. They will be given a moderate salary and MAY have a chance to earn commissions from the senior brokers transactions as well as any deals they find on their own. Estimated success prediction and ‘stick’ rate is 70%+.
WHY IT’S MUCH BETTER: Being on a dedicated team makes all the difference in the world. For example; the senior brokers may be paying for the rookie’s salary or part of the salary so they are financially vested to teach. On the other hand, the rookie is told that they will get a small % of any deal the senior team does AND even be provided the opportunity to receive a commission if they find a deal on their own! Wow, that sounds good to any rookie! Great training, association with the ‘big boys’, get a piece of big money the seniors make and to put a cherry on top of this amazing deal, receive a commission on whatever they find! That’s a hot opportunity! Unfortunately there are serious pitfalls with this approach, that’s why I said it only produces a 70% ‘stick’ rate. Here’s the issue:
• Senior brokers often hire a helper rather than a potential broker.
• They shove all the paperwork to the rookie and rarely get around to training them on what it takes to win in CRE. Components such as how to prospect effectively, deal mechanics, presentation skills, value statements and mindset are often left to the wayside in place of ‘paperwork.’
• The senior broker may have a belief that this is the way to learn, but it’s a high risk play.
• Senior brokers who are in a partnership with another senior broker often exercise the program; you take it….I got it, when It comes to taking time to teach the rookie.
• Remember the part about the rookie has the opportunity to receive commissions on anything THEY FIND OWN THEIR OWN? Sounds good, but the rookie doesn’t have much time to prospect on their own due to the amount of ‘stuff’ they are doing for the senior brokers, so there go’s that deal!
• So, what about the idea of getting a piece of what the senior broker brings in? Sometimes that’s not a bad deal, but I often learn from rookies that the % they get depends on the deal. There is no initial declaration of what the rookie gets in the beginning, so the negotiation happens when the deal comes in. Nothing could be worse for the rookie than being subject to a commission negotiation when the money is on the table.
• Oh well, it’s only for a period of time right? Not so, the rookies enter the agreement and frequently never know how long the training term is. When I ask, “How long a program are you on?” they often say; “I don’t know, it’s up to the senior brokers!
• So consider the net-out of this approach. No certain time frame for graduation, no certain % on senior broker deals, no time to find their own opportunities, very little real brokerage training due to being swallowed up in senior broker paperwork!
• End result, the rookie ultimately thinks they will never break out of this team approach and have the chance to go big on their own. The savvier and more educated they get, the closer they move to jumping ship….they become an attractive target to the competition.
SIGNIFICANTLY BETTER: Bring the rookie in; tell them they will be interviewed by several senior brokers who are candidates for hiring a rookie. After the initial interviews the senior broker will decide if they want to pick up the rookie. The rookie is told that they will be given product knowledge training for X number of weeks, and then handed off to the senior broker that has agreed to develop them. The association will be with one senior broker only and for a fixed period of time. They will be given a modest salary and a chance to earn a commission % on any transaction they find, that % is established at the start. This opportunity will be a ‘partnership approach’ with intense training and accountable expectations. Estimated success prediction and ‘stick’ rate is 90%.
WHY IT’S SIGNIFICANTLY BETTER:
• The rookie has a defined ‘one leader’ association.
• The rookie has a dedicated tenure for the program – it’s clear at the start how long they will be in training.
• There is a salary and the senior broker agrees to pay at least 50%.
• There is a written training format that has been submitted by the senior broker & approved by the MD.
• There are clear commission splits determined at the start between the rookie and the senior broker.
• The senior broker makes a commitment to train without fear that they are training their competition.
• The rookie is taught how to be ‘deal productive’ immediately and allowed time to prospect.
• The rookie is treated as a potential new broker not a helper.
• The rookie is treated with dignity and respect which upon graduation solidifies the relationship for future mutual deals.
• The rookie stays with the firm with a very high ‘stick’ rate mostly because of the senior broker.
• The rookie’s graduation from the program is celebrated by the office. Once on their own, they roam the Serengeti to find deals, and who do you think they bring those deals to….the senior broker that cared about them!
“Rookies leave brokers not brokerage companies”
As co-founder of Dialexis, an industry leading demand generation contact organization that creates high-producing brokers and corporate sales professionals, his organization is invited into many of the top brokerage firms in the US. Developing rookie brokers is a priority for Dave; it’s his love of bringing talent to fruition.
Dave is the Co-Author of two books, SOAR Selling: The #1 Demand Generation Contact Solution In North America — A Proven Method For Reaching Decision Makers and The Canoe Theory: A Business Leadership Strategy. His goal is to provide a mindset platform and a mechanics solution that supports brokerage professionals to reach the top achievement percentile in production.