CEO of Gough Recruitment Joel Barbuto joins host Tim Neary to reveal how changing technology has influenced his business practices.
He shares his thoughts on the differences between property management and residential sales, and the successful traits needed to approach both disciplines.
For those new to the industry, Joel discusses what is required to push forward when you are trying to get those “runs on the board”, and for those heading a company, what to look for when hiring new staff.
Tim and Joel also discuss how salaries and commission structures are at present and where they could be headed in the future.
You will also find out:
- How to source and attract fresh talent
- The importance of flexibility in the workplace
- Changes, both good and bad, that are impacting the industry
Tune in now to hear all this and much, much more in this episode of Secrets of the Top 100 Agents!
Announcer: The top 100 agents are the best of the best, listing and selling more than any other agent in Australia. These are the practises, actions and beliefs of the most successful agents in Australian Real Estate raw, honest and completely uncut.
Tim Neary: Good day everyone it's Tim Neary here. I am Editor of Real Estate and Business and Host of The Secrets of the Top 100 Agents podcast. Thanks for tuning in.
Interesting show on the cards today. We've got Gough Recruitment's Joel Barbuto on the show today. Joel is the COO of Gough Recruitment and responsible for overseeing the group's operations and works across all of its pillars including strategy, growth and training.
Hello, Joel and welcome to the show.
Joel Barbuto: Thanks, Tim. Thanks for having me.
Tim Neary: You're very welcome. Now, your career started in property management more than 10 years ago and apart from winning a Property Management of the Year Award, you then moved into sales. You've got a good background in real estate and really well qualified to do what you do. Tell us a little bit about Gough Recruitment and what you do, do.
Joel Barbuto: Sure it's funnily enough I actually came to Gough to get a job in real estate and ended up working in the company so a number of years later my career has changed a lot but essentially Gough Recruitment, specialises in recruitment in real estate property development and construction and we operate right across the country in Sydney, Melbourne, Brisbane, Perth, Singapore, Auckland, and soon to be Hong Kong. We have about 90 staff and generally about two and a half thousand placements a year. We work in this niche market of real estate quite a lot and it's a big part of our business and represents about 50% of our revenue.
Tim Neary: You've had quite a good growth over the last recent past as well.
Joel Barbuto: We have, yes, 25% year-on-year over the last three years, which has been fantastic for us.
Tim Neary: You specialise in sales in admin and property managers. What are some of the trends that you're seeing across the industry at the moment?
Joel Barbuto: We're certainly seeing a big candidate shortage where real estate offices are very optimistic and keen to hire. The big issue is lack of talent both in property management and sales. We typically would see a life span in property management of somebody getting into the industry of about five or six years and that's a challenge because they leave the industry and then it's very hard to find candidates to replace them.
In sales, you get a large percentage of people getting into the industry, a small percentage of them doing super well and then a large percentage that get out over time. We're always filling our card up with new candidates all the time right across the country, but we're certainly seeing hiring and people wanting great people, but it's a candidate shortage.
Tim Neary: It's about talent isn't it? What are you looking for specifically and also the talent that you identify for property managers, does it convert into sales or are they two different things?
Joel Barbuto: Quite often it's quite different. Property management, you're looking for somebody who's generally qualified and has a certificate of registration if it's in Sydney or in different states around the country but someone who's quite detailed and someone with great follow up and strong customer service skills. In residential sales, you're looking for someone who's a good hunter, someone who's a good salesperson who can go out and happy to pound the pavement and generate leads and basically, try and find listings and then market those houses and those campaigns to find the right buyers.
Tim Neary: Now when somebody gets into the industry, are they ... I'm thinking about how they plot their career journey from start to finish. Is there a predetermined way to do it or there's a-
Joel Barbuto: There is and we're certainly seeing their career journeys change a little bit typically in residential sales. Someone will come into the industry as a sales assistant and they'll be doing a lot of that labour for this experienced agent that might be do preparing marketing appraisal kits, doing letterbox drops, or updating websites and things like that and then over time as their confidence builds and their experience builds, they would continue to have more tasks and responsibilities. Then over about two year period they could potentially become a sales agent where they've either got their own patch that they're working or they may be working closer with the sales agent in a geographical area. Then when they feel like they're ready to spread their wings, they might take that full responsibility and then be given an area that they're working themself. Then employ their own sales assistant. That's generally where you would see the career journey for a sales agent.
Then for a property manager, they would typically start as a property officer or assistant property manager. They might go into leasing or new business and then they become a property manager. From there, they would become a senior property manager, potentially a department head. It depends on where they'd like to go with their career but real estate, generally people are either on the sales side or the property management. Sometimes, they do try to convert over to the other side but that's often difficult because the skillset is different on where you need a sales person on one side and someone who's good in managing on the other side peoples that real estate assets.
Tim Neary: It almost sounds like they're two completely different disciplines.
Joel Barbuto: Well, they are. Some people make the switch very well and often other people do struggle and I think a lot of people in property management that see the sales agents building their careers and see really how hard it is, it's not just about driving a fancy BMW and turning up in a nice suit. There's a lot of hard work and yacker that goes in behind the scenes. Quite often a lot of hours every week to build their portfolio in their area.
Tim Neary: It's the tip of the iceberg thing isn't it? We always see the shiny bit on the top but we don't understand sometimes what goes below it.
Joel Barbuto: Exactly. There's a lot of work to become a great sales agent.
Tim Neary: Now for those people that are listening that may not be in real estate immediately or right now that are thinking, "Geez, I would like to be," what are some of the talents, what are some of the things that you would look to, to see whether these people have potential to be or to have what it takes?
Joel Barbuto: I think they've got to have a fair bit of ambition and get up and go. They've got to be very happy to make 50 or 100 calls a day, people that they may not know. They can't be afraid of the phone.
Tim Neary: So bit of a thick skin.
Joel Barbuto: Yeah, very thick skin. Someone who's really service driven, very customer focused, somebody who's prepared to do a lot of follow up and who's in it for the long game. You're not going to build your career in real estate sales in six months. You've got in most geographical areas or these catchment areas you have agents that have been established for 10, 15 years and mom and dad are just not going to lease their house with the new kid on the block. They'll generally, if they're going to sell their prized asset with people who have strong profile in the area and have the runs on the board.
Some would say, "That's hard well how do you get the runs on the board if they don't give you an opportunity?" I think that you just have to cut your teeth and you have to be in it for the long game and continue to have your eye on the prize. As some agents complete their careers and move on different journeys, you're there to pick up that slack.
Tim Neary: You mentioned the word career and that's what it is, isn't it? This is the long game. This is building a career. There's no such thing as a one hit wonder in real estate. Some people might get lucky early but it's just luck. The real thing is the long game?
Joel Barbuto: Yeah, correct. I think that if people feel like they're going to get into the industry and make a million dollars in the first year they're crazy. It's going to take at least 18 months to build up and get that momentum and they're probably going to be on what some would say bread and drippings for that first period and then it'll start to increase and then continue to increase as they get more and more confident and as their brand gets known in that area. A lot of it is branding.
Tim Neary: It sounds like somebody that's thick skinned, that is ambitious, somebody that backs themselves but somebody that understands that this is a long game, is prepared to take some hardship in the early years and dig in and work but continually want to master their craft as they build and become more known and better at the game.
Joel Barbuto: I think also you'll see a lot of attributes with key successful people are is that they want to be better. Every day they want to be better, they want to do better, they want to be fitter or faster or whatever that may be. The real success lies in that ability to be sharp, alert, and want to be better.
Tim Neary: One of the other things that we're seeing in the industry is constant change and two of the things that are happening and I guess changing your business as well is a bigger dependency on technology and also more flexibility in the workplace. How have those two things influenced your business?
Joel Barbuto: The world of technology has changed everyone's industry and I think for us we have a big work-life balance and flexibility in the workplace. There's not a one size fits all for everyone. Everyone has different circumstances. Some may need to leave early to pick up kids or have light day care or someone might want to work from home one day a week. We're very flexible with that in our workplace. It depends on what your needs are. We're very just output focused.
With technology these days, and then quite often I'm flying around to different country states every day, week and I'm working at very odd hours just due to my travel but we find the same for our staffing. Some people live further away, they want to miss the traffic. Some people, you don't need to physically be sitting in an office anymore to be say that you're working. We prefer that if they can log on from home and get a few hours done. That's fine. Let's focus on the output and we're certainly seeing that transition into the industry a lot where that flexibility in the workplace is becoming very important for candidates.
I think the clients are really caught on to the fact that if they don't look after people now and listen to them, they will go somewhere else. The cost of that failed recruit or re-recruiting that position is expensive and quite often it's simple but you got to listen to people and give them what they want.
Tim Neary: It's a good point isn't it is that a failed recruit or an unsuccessful one is a costly exercise? There's a lot of forethought and a lot of thought that needs to go into getting the right fit. How do people make sure that they get the right fit?
Joel Barbuto: I think it comes back to having a really good brief on the culture, the business, being authentic and true to what your business is and selling that at the interview process. There's no point selling a dream and then under delivering when the candidate comes onboard because that's just going to be disruptive for everybody and people will see through it.
I think that recruitment process is super important to get right from the front end by carefully choosing the right candidate and ensuring that not only you recruit the right person but you retain them because we can find you a great candidate but on day one if their desk is not set up and they feel warm and fuzzy and they get a great first week experience, they're probably going to be disengaged and thinking, "Oh, my gosh. Have I made the right decision here?" Let's not forget people moving jobs, it's quite hard for them buying a house, or buying a car. In finding that next career move, people are very nervous especially if they've been in a business for two three plus years.
That first week or two or probation period is super important to make sure that they are engaged and that they are happy. It makes a huge difference.
Tim Neary: That's great advice you know from what I'm hearing you say it's a two way street isn't it? You want value from your employee, but your employee also want value back from the employer.
Joel Barbuto: A hundred percent and quite often in this market, being candidate tight, the candidates that are coming to the clients and interviewing them. They're looking at why should they join this real estate office and small things like being prepared for the interview, reviewing their CV, asking them great questions, managing the body language well and the communication, being authentic is very important for that process because that candidate may have five or six other interviews in the same street. Quite often, they're very much looking at why they should join that real estate office.
Tim Neary: The theme that runs through all of it is being authentic. Candidate be authentic, employer, potential employer be authentic as well.
Joel Barbuto: Yes, you're right, Tim.
Tim Neary: One of the things that is really influencing the industry, the real estate industry, at the moment is Purplebricks or the circle disruptors and Purplebricks is almost lack for want of a better word poster boy of that of that at the moment, the poster child of that at the moment. Now, you've had something similar in your industry as well come along LinkedIn, which has upset things.
Joel Barbuto: Yeah, I think you know a number of years ago recruitment was going to be extinct because LinkedIn was starting and all clients would have access to all these candidates and names. Ultimately, that's been a really great tool, but it's been a great tool for recruiters to use and to source talent and activate talent but there was so much hype around LinkedIn that was going to really interrupt the recruitment industry and it hasn't done that at all. It's actually put us in a better position and that's why we've been growing year-on-year whilst you can have access to all the candidates, the whole trick is activating them and finding them the right home.
It's very much the same in real estate having that broker to manage that process whilst Purplebricks and all these other guys that are popping up have something different and servicing to offer the market. There will be a percentage of people that take that up but the large proportion of people will still want to list their most prized asset that they've built up over the years with somebody that will get them the best price and you'll still need that brokerage to do that.
We've seen a little bit of change but to be honest, it's been negligible.
Tim Neary: Change is always going to happen, isn't it? It's quaint you see we're running a survey. We're rolling a poll on the moment on real estate business and we're asking the question, "Where's the biggest disruption going to come from? Is it going to be from the likes of Purplebricks? Is it going to be elsewhere or is it going to be from the industry itself in not adapting to change? Encouragingly most people are voting that it's going to come from the industry not being able or not adapting to the change that's coming. I think most people are aware of the fact that there is change coming, technology is going to change the way things are done. You adapt with it and you change with it and you go with it and your own business is going to be better as a result.
Joel Barbuto: I agree. I just think that we've already started to see press articles out around vendors not getting necessarily the best price through a disruptor like that in the industry. I think everyone will always land back with a real estate agent, somebody who can sell but yes, technology will cut out parts of it and there'll also be more technology to market the property and promote it more widely as well.
Tim Neary: That's all I've left to the end of the podcast on purpose but it's probably the business end of the discussion and that's around salaries. What trends are we seeing around salaries and commission structures?
Joel Barbuto: We're definitely seeing that levelling out. I think there's only a limit that agencies can go to, to attract talent and that's certainly at that pointy end now. It does come back to recruitment and being able to offer other things other than commission splits because people got to be happy in that workplace. It's got to be the right home for them. If they're going to be working there 10, 12 hours a day, they want to make sure that it's that right fit but there's not much left in the tank in regards to commission split. We're seeing that levelling out and probably going and coming back a little bit and that clients are wanting to find that right fit. Also, real estate offices have a lot more compliance cost associated with running offices now, marketing et cetera so they can't really do much more than they've been doing otherwise they might as well be in business. We're seeing that levelling out.
In property management we're still seeing salaries rising. Lack of talent, great property managers are still lifting a little bit. It's patchy in different states. As an example, Sydney, Brisbane, Melbourne, is still lifting. Perth is stabilising. That's due to the economic climate as well but in property management, we've seen that consistently rising over the past five or six years but I think that also rents have been rising, management fees are rising. It all does wash itself at the end of the day but property management is where the increases are happening.
In real estate sales, values in Sydney and Melbourne in examples are lifting so they're essentially getting pay rises because the commission's a bit higher.
Tim Neary: You were telling me also sort off air that there's a trend away from the big networks to the smaller niche boutiques.
Joel Barbuto: Yeah again patchy in different states around the country but yes, we're seeing more in candidates and I think it comes to that being authentic and being, wanting to feel part of a family and a home is that candidates really like the boutiques. I think that also they see those franchise fees and costs associated with it can expensive when they're getting themselves up and running and they feel like they might get more exposure to the principle or to other leads in the office.
It's certainly different for different people but we seem to be moving more candidates as of the moment out of the larger outfits into these smaller boutiques in those local areas. We're certainly seeing in growth areas, say across Sydney where they don't have as many real estate offices more than popping up. The saturated markets are seeing some amalgamation of real estate offices and in the newer growth markets you're seeing more real estate offices popping up.
Tim Neary: Well Joel, it's been a real pleasure having you in the studio today. Thanks for coming in. Just before I let you go, I just wanted to get an idea from you. What's the future do you think of sourcing talent for the industry and in particular what's the future for Gough Recruitment?
Joel Barbuto: I think sourcing talent's going to be about encouraging fresh talent into the industry. I think there's got to be a bit of an overhaul of the regulation and the way we source candidates into real estate and also that reputation in the industry. A lot of people don't have the best experience there and we need to change that. We need to make sure that candidates really enjoy their career whether it's limited or longterm in that because they tell people those stories get shared and salaries are in line with other industries. We need to encourage people into it.
Across the board, I'm really excited by the future especially at Gough. We have ambitious plans to double the size of the business by 2022 and that will see us open into new markets plus bolster the current offices that we have. We see it as an exciting time. Yeah, its been great to be here and hopefully share some wisdom.
Tim Neary: Thank you, Joel. You really have. It's been a pleasure. Thank you.
Joel Barbuto: Thanks, Tim.
Tim Neary: Remember to follow us on all of the social media stuff: Twitter, Facebook, LinkedIn. You can follow me too on Twitter, @TimothyJNeary if you want to do that. If you've enjoyed today's show, please leave us a five-star review on iTunes. It's the best way for new listeners to find us and for them to hear the great content that we are putting out. As always, realestatebusiness.com.au is where you'll find us. There's plenty of stories there on the business of real estate across the whole of Australia and on my guest today, Joel Barbuto. Thanks again for tuning in and we'll see you next week. Good bye.