Are Recruiting Agencies Paying Off?

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By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia

Currently, there are many challenges facing the property management industry. I believe the property management industry is unknowingly creating many of these challenges because they are not identifying and addressing the real problem. I consider the real problem to be how principals operate their property management business.

Problem number one comes when principals need to find a new team member, the “Property Manager”.

Principals don’t seem to fully understand the roles in their property management business. Any available position is immediately referred to as a “property manager”. However, what skills, attitude, and knowledge are really required for this available position i.e. what is the role that really needs filling? Many principals do not consider this question and therefore do not recruit the right team member for the job.

The normal process is therefore as follows: The recruitment agency is contacted because recruiting through self-advertising is apparently all too difficult. The recruitment agency is asked if they have any available property managers. Of course, they have a whole database of self-professed property managers. They maintain a wonderful database of property managers to choose from that are all experienced, with many years of service under their belts, and have achieved amazing results so far. They are also highly skilled and trained so they come at a price. Several thousand dollars to the recruitment agency later, you have a “property manager” on a salary in the top percentile. But have you ever wondered on what grounds is this recruitment agency recommending them?

I believe the recruitment agency, just like our industry, bases their commission (fee) on the salary achieved for recruits. So, the higher the salary, the higher the commission you have to pay them for a recruit that in all too many instances only lasts a few months. And go through the process (and expense!) all over again.

I was chatting to a recently appointed general manager of a large property management company last week. The principal, upon the GM’s appointment, told her that he was fed up with the huge outlay and spiraling costs of recruitment. In the last year alone he had spent over $95,000 on recruitment costs. That is the tangible fee i.e. the fee he has paid to recruitment agencies. He has not taken into consideration the non-tangible costs. What are these? Damage to business and reputation, pressure on productivity and efficiency, lack of continuity in management, costs for new business cards, and email set-up. Yes, there are enormous costs for recruiting so it pays to get it right the first time!

This particular principal wanted the newly appointed GM to take property managers out for a coffee and chat to encourage them to work for his agency. Bad move! What this principal must focus on is retention. I’m not talking about retention of managements that naturally occurs as a result of team retention. Think about it. Wouldn’t you, as a business owner, gain far better results by investing in systems, processes, training, and resources, rather than continually paying the high costs for recruiting, especially when you recruit through a recruitment agency?

By having systems, processes, training, resources, and of course policies in place you are in a position to proactively manage and monitor your team and of course your business. It is far less expensive this way (and that’s just taking into consideration the tangible cost alone). Your result is retention of team members, and team loyalty in return leads to client loyalty.

When recruiting for new team members it is usually as a result of growth. Having systems, processes, training, and resources in place means you manage every area of your business, thus allowing you to grow team members, and effectively groom them to be your next property manager when a position is created (due to growth). Knowing your business means that when you need to recruit, you do the recruiting on your terms, at your rate, and best of all, you don’t outlay costs on a recruitment agency that provides you with an overly expensive service and product.

When you’re in control, recruiting becomes easy. Why? Because you can now recruit the right person for the right role as you have designed your business. Therefore the recruitment process will meet your business requirements.

Like all my articles, this topic lends itself to more posts! In the meantime though, please keep in mind one thing – hire slow, fire fast! Don’t be in a hurry to hire another team member just to fill a position. Hire by design and with purpose, and if you make a mistake in your choice of recruit, use the probationary period to fire fast before damage is done to your brand and reputation.


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Michael Maynard
New Neighbors Realty - Milford, CT
"Welcome Home!"

it is always interesting to balance wether or not a recruiting agency is worth it or not.

Apr 19, 2012 11:27 PM #1
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA

I would rather train someone who already has "people skills" to be a property manager than take a failed real estate agent with NO people skills and train them

Apr 20, 2012 06:03 AM #2
Charles Stallions Property Manager
Charles Stallions Real Estate Services - Pace, FL
Pensacola, Pace & Gulf Breeze Property Management

I have never seen these recruiters work out in the professions that I have been in.

Apr 23, 2012 12:31 PM #3
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