Investing in the next generation of CRE talent now will make our industry more resilient and innovative in the future
LeaseUp is passionate about supporting the next generation of talent in our industry. Our commitment to tech and innovation goes hand in hand with an understanding that we need to empower early-career brokers to thrive and drive our industry forward. That’s why we’re offering a free, two-month license to any broker in the first three years of their career, with an additional 20% off license fees for the rest of 2023.
The future of the CRE industry is dependent on the young talent driving the market forward. Recent headwinds have made hiring this talent harder.
Brokerages should be looking at two separate but related areas: creative strategies to recruit and retain young talent, and robust training programs for early-career brokers.
We recently heard from a major brokerage that young brokers need to reach $300,000 in gross commissions to be profitable. Firms bring people in as 1099 contract workers to bang the phones, and young brokers often struggle in their first years in the business because their comp is frequently a draw or commission-based structure rather than salary-based.
Some major shops are doing a better job of bringing new brokers in for a more structured training program, and trying to give them more tools to find success. But overall, the industry needs to do better by early-career brokers.
There are a few organizations out there, like CREi and SIOR, that are giving this problem thought and offering young professionals access to wider networks. SIOR has a program for junior realtors that want to join but aren’t far enough along in their careers yet.
“We are fortunate to be a part of a unique industry and business model that rewards the bold — I would never want to alter that aspect,” SIOR CEO Robert Thornburgh told LeaseUp for this article.
“But as leaders, we also have a responsibility to drive the future of CRE. That means continually looking at new and creative entry programs that ensure the next generation of sales professionals can succeed.”
Ryan Hartsell, Managing Partner at Oxford Partners and former president of SIOR’s Independent Brokerage Group, has this to say about creating opportunities and innovative mentorship strategies for early-career brokers:
“Finding success in commercial real estate brokerage is extremely challenging for both employers and entry-level agents. The failure rate is extremely high and the process is difficult, so most never attempt it, and those that do tend to experience serious pain.”
“Having a robust training and mentoring program is of paramount importance. Anyone looking to get into the business, or any brokerage firm looking to train new talent from the ground up, needs these three things:
1. An automated and tech-focused systems for industry training and new business procurement
2. Hands-on mentorship from a team of successful agents willing to pay it forward
3. A financial and philosophical commitment to continued growth and problem-solving
Any firm adhering to these principles should retain and grow new talent better than the majority of its competition. Success in this endeavor is hard to come by, but if done well is a competitive advantage.”
Saadia Sheikh, VP of Brokerage & Innovation at JLL, is passionate about the future of CRE in terms of tech and talent. “It's not just how are we gonna get young people to be in commercial real estate, it's how do we get people to be in commercial real estate that have different expertise and backgrounds,” she said on a recent episode of The Shift, LeaseUp’s CRE and tech podcast.
“If we're not growing people and setting them up for success, they're gonna go somewhere else or to a different industry and they might get out of brokerage. We have to rethink the process and how we bring people into the business.”
Her advice is for brokerages to open their talent search to people coming from other industries, and to provide incentives for newcomers to stay in real estate.
“Regardless of age or industry, invest in that talent the first 2-3 years to set them up for success. It's not just about those new people, it's also about how it benefits everybody on the team: the mid-level brokers, the senior brokers, new business, new internal ideas.”
Larger firms could consider small scholarships for people just starting out in their CRE careers. Even the typical $400 fee to take the real estate courses necessary to then take the test to get licensed can be an unnecessary barrier to entry keeping fresh talent out of the field.
There are some resources in this vein already out there, and some organizations doing a great job of inviting and supporting early career professionals in our industry. Savills’ Junior Broker Development Program is one example: a 15-month program letting a diverse group of junior brokers rotate through different departments, in the process gaining valuable early-career experience in different service lines.
Janet Woods, President, East at Savills, told us about the program’s progress to date.
“Now in its third year, Savills Junior Broker Development Program has achieved a 70 percent retention rate, while simultaneously living up to its mission to provide opportunities to young professionals from diverse backgrounds,” Woods said. “We look forward to continuing to invest in this immersive program, which provides participants with a full salary, and expand it to other key markets across North America.”
We’d love to see more programs like this laser focused on the next wave of CRE talent.
When you’re just getting started in the business, the faster you get your bearings the better. LeaseUp’s digital CRE deal platform is built with the goal of helping brokers get more deals done, faster and more efficiently. One way we do that is by focusing on the broker/client relationship and using tech to eliminate as many time-wasting pain points as possible.
An added benefit is that if you’re just starting out, you can quickly get a grasp on making digital surveys, tour books, and dynamic deliverables with a digital experience that clients love.
Sign up for a free trial of LeaseUp to try out our CRE deal platform firsthand.