Macquarie Bank’s 2014 Residential Real Estate Benchmarking Report, released last week, found the main obstacle to hiring remains the availability of skilled and experienced staff.
The report showed that fewer businesses are concerned with finding the right skills in candidates than in previous years - partly because, in a buoyant market, highly developed sales skills become less critical.
Tom Panos, industry coach and general manager of sales (real estate) at News Corp, told Real Estate Business that there’s currently an oversupply of inexperienced people willing to jump into the industry, but a shortage of genuinely skilled agents.
"One of the reasons why this is the case is that real estate has a low barrier to entry. Basically, if you’re vertical and have a pulse rate, you’re in,” said Mr Panos.
“What the marketplace is short of is skilled negotiators. What it’s lacking is value and provider - people that can articulate the value proposition of a good estate agent, which is negotiation, marketing and stay-in-touch strategies.”
The Macquarie report found that with more agencies competing for a limited talent pool, experience and skills are at a premium, highlighting that 44 per cent of salespeople earn over $100,000. However, 76 per cent of salespeople still earn under $150,000 per year, including commissions, which the report said indicates that business owners can add value to their sales team by coaching them to high performance.
The research showed that some 45 per cent of large agencies have top salespeople generating $500,000 or more in commissions each year. In contrast, only three per cent of small businesses have salespeople producing the same level of commissions. Nonetheless, the report states commission splits have remained steady at an average of 43 per cent, with a high of 49 per cent in Western Australia and a low of 34 per cent in Victoria.
Darren Gorrel, NSW manager at Gough Recruitment, agreed that the market is positive at the moment, but the genuine talent out there is playing it safe and staying where they are.
“There’s a real lack of experienced people in the market right now willing to make a move,” Mr Gorrel told Real Estate Business.
“The experienced agents are the ones that every agency wants, but they’re not going to move while the market is still quite hot, where they’re earning good dollars."