I don't believe in a one size fits all. That's not how the real estate world works commercially. Talented people get paid more in every industry. As a leader be prepared to give more and you will get more.
For the right person who can make a big difference, you should go all out to secure them and you should continue to reward talent within the business. Just remember to bring people through, get talent early but recruiting a star can create momentum that creates success for you in other areas.
At the heart of an agent/principal relationship is value. There are four scenarios in the agent/principal value position.
1. The principal doesn't value the agent.
2. The agent doesn't value the principal.
3. Neither party values each other.
4. Both agent and principal value each other.
Of course number four is the only scenario that can work. Sure, financial agreement is important but each party has to see value in the other. When they do they are happy with the financial agreement as they see value in what they share from the gross commission with each other.
Most agents can get a job anywhere. An experienced agent can walk down the street and drop into just about any competitors office and they would have a gig immediately.
The work of an agent can also normally be clearly defined. Sometimes this isn't as clear with the principal. I've asked principals the same question, "Why should an agent work here?" or "What value do you bring to the relationship?"
How simple it is, the most basic questions surely must be at the heart of a principals offering yet often a principal will struggle to articulate why an agent should work at their office. Sure, the principal knows all the backend work that gets done and the responsibility they take on just operating the office but that is a standard platform that every office has, it's the personal value the principal brings that is generally the value an agent measures.
This question is one you can ask yourself now and one you should ask frequently. Ask this simple question to yourself but be warned it could be hard to be authentic with this. You may quickly blurt out "Because we are the best or we are number one." People aren't generally interested in the old story of we are better. That's talk from a time past, selling more property isn't the only measure of better.
The modern-day principal must be clear on what their offering is, what they represent and what their value proposition is. A principal just needs to reset their thinking sometimes and actually change their approach. What a wonderful experience this can be.
I've had two light bulb moments as an office leader. One was the realisation that I work for the agent - they don't work for me. As said above an agent can get a position anywhere.
Number two was when I articulated and understood why people should work with me. There was a time when I lacked clarity around this subject then it just came to me. I sat with this question and the words appeared. Agents should work with me because I help improve and develop people. That was my purpose, to improve and develop people. I definitely wanted to pay them well though. I've never thought that because I'm helping them get better I should be overly rewarded for this. I feel this is the basic offering of a principal.
So when it comes to recruiting an agent paying a super high commission may get you someone but it rarely lasts long term as the agent saw the value just in the money, not on you. If you've built a reputation for being a leader who supports and helps improve the performance of your team, people will see value in your skills and know you're very likely to help them be better agents which makes them more money but just as importantly brings them personal satisfaction. If they value you as a leader the commission split is easy to work out. However, then it's the case of the principal staying relevant to the agent and staying of value as a principal we all need to constantly work on. It never ends. Be willing to train yourself and improve, change and evolve so you can lead with purpose and inspiration.
Written by Andrew Acton, leader and founder of the Explore Property Group.