I speak to lots of businesses across the property sector, I’ve had different feedback on how the market has been. Lots have reported that property sales have been particularly challenging throughout the year, particularly as we have got close to each Brexit deadline. For example, we’ve seen the lowest October rise in house prices since Oct 2008 (https://www.theguardian.com/business/2019/oct/21/lowest-october-rise-in-uk-house-prices-since-2008-financial-crisis)
Of course, uncertainty over Brexit has been the key reason we have seen this affect on the market.
This has also caused a number of property developers to push back launches throughout 2019 as they also wait for a decision in Parliament that will bring some confidence to the market.
How this affects the labour market…
As everyone presses “pause” the labour market also stalls. Less opportunities are available so fewer people are moving to new companies.
Despite the fact there are fewer opportunities, we still have a very “candidate-short” market. However, although finding top quality people for your organisation is still extremely difficult, there is less competition for candidates right now as businesses wait to see what happens in Westminster.
Creating a backlog…
This is creating a backlog. The development launches that have been postponed are still there. Companies growth plans are waiting to be realised, they have just been put on hold for a decision.
What happens when the damn bursts?
Once some sort of decision is made – whether it be the current deal presented by Boris Johnson, or a slightly tweaked one from Jeremy Corbyn, or referendum between one of these deals and remain. Then EVERYONE will be looking to hire, ALL at the same time.
This will mean finding, and even more importantly, securing top quality people will be even more challenging than it is right now. There will also be upward pressure on salaries and the offers required to secure those people.
Therefore, the savvy business leaders will be looking to snap up the top talent that is available right now before everyone is in the market.
Just as in property, the time to be active is when demand is down. That’s the time to maximise your investment.
I come across numerous senior people within business lamenting the lack of commitment from millennials. They are seen as a generation with a chip on their shoulder; as those who simply do not know how to graft; people who will give up at the first sign of adversity.
“The kids today aren’t like we were…”
They are thought of as “snowflakes”, as people who are easily offended and who are going to be up in arms at very little.
But is this really true?
Of course, there have been changes in society over the decades and there are some differences in attitude that have developed over the years, but to say a whole generation of people now lack the drive, graft and commitment, is totally inaccurate.
Of course, there are some people who are spoilt and ungrateful – the perennial victims, but there always have been. However, now these people are more likely to have their demands fulfilled.
And I do feel that there is a broader change in behavior in general.
There is definitely a trend towards people changing employment more swiftly and there is certainly a greater demand on businesses to improve their packages and working environments, but this isn’t because people have suddenly become ungrateful in nature.
it’s environment rather than upbringing that is changing behaviour…
The reason we see this change of behaviour, I feel, is because we have had record levels of employment across the economy, even in spite of Brexit. This means people have numerous opportunities available to them. There isn’t the same fear that losing your job means you’ll have no income and won’t be able to pay your rent/mortgage.
Highly talented people can quickly find a new (and potentially better) role.
Rapid innovation of working environments…
With so much choice available to millennials (and all the other generations in employment), ensuring you have the culture and environment to retain your best people is fundamental to business success.
The availability of numerous opportunities coupled with advancements in technology is driving innovation in the work place – the rise of collaborative workspaces, flexible working hours and work from home opportunities, reflect this.
This is a great thing – and if you don’t move with the times you will be left behind.
There are still frustrations for business owners…
Even with the improved working environments, the huge amount of opportunity available to job seekers still means if it very difficult to hire and retain the best people in the business.
Companies need to build a long term “people strategy”. Proactive forward planning, thorough in-depth calculated assessment, and robust internal appraisals and 1-1 procedures in essential to maximising retention.
Do you agree? Really interest to hear peoples thoughts on this topic…
If you are interested in discussing your own recruitment strategies with one of our consultants (whether when growing your team or planning your personal career growth) please feel free to get in touch.
IMPORTANT – Before reading through the costs calculated below, have a guess as to how much you think an empty Sales or Lettings negotiator seat might cost an Estate Agency or Property Developer…
Write it in the comments below and see if you’re close!
So, I’ve been doing some workings on the cost per hire for Sales people within the Property sector.
Here are the potential costs of what might go into securing a suitable Sales Negotiator, Lettings Negotiator or Property Consultant…
- Assuming that the position will remain open for 2 months and it will take this person 2 weeks to be fully integrated into the company – (based on a conservative £10k / month target) lost revenue – £25,000.
- Job Advertised across multimedia platforms– cost of £1500
- 600 CV’s will be received and need to be reviewed:
- Typical review time is 3 minutes per resume – 30 hours of time.
- 25 phone screens will take place (15mins / screening) – 6 hours, 15 minutes of time.
- 8 face to face initial interviews will occur – 8 hours of time.
- 3 face to face, 2nd, more detailed interviews will occur – 3 hours of time.
- Background checks and reference checks will take – 2 hours total of time.
- Hiring Manager earns £100k per year or £48.08 per hour (assuming only one person is involved in the hiring decision). Time invested of 49.25 hours = £2367.94.
- Training and two-week ramp up of new employee – £1,500.
Total cost: £30,367.94
I haven’t included the time lost from the core responsibilities of the hiring manager; they could be devoting a whole extra week per hire to generating revenue for the business.
Or they could be spending more time with the existing team to develop them and increase productivity and retention. This, in turn, would reduce the need to recruit.
Then, of course, you must also take into account the bad hires, people who aren’t right. These are the people who also take a wage out of the business and don’t generate revenue!
If you lose 1 out of 4 people hired at the end of their 3-month probation that would be £30k in lost revenue PLUS their wage cost of £4500 (3 months at £18,000pa) = £34,500 in total.
Spread that over the 4 placements = £8,625 / placement extra for each hire.
If that turnover is higher, I know many property companies and estate agencies where the turnover rate is as high as 1 in 2, that’s £17,250 extra/placement!
This makes the total cost per hire = £38,992.94 (or £47,617.94 if there’s a 50% dropout rate)
Of course, the biggest cost here is the loss of revenue – £33,625 / placement and the cost of bad hires.
So you want to see the best people as quickly as possibly but it’s important not just to hire anyone as you will be going through the whole process again, at more cost. Of course, recruitment companies can help but make sure you pick the right one – but before going down that route see my blog “recruitment agencies are a waste of time!”
The most important thing is getting the RIGHT person and do all you can to keep your BEST people. If you would like more information or advice on interviewing and selection as well as the best ways to increase retention – feel free to get in contact with me (firstname.lastname@example.org)
Really interested to hear if your guess on the cost per hire was close! And if you have anything to add or feel I’ve missed anything in my calculation please comment!
If you are interested in further reading on this topic here is an article posted in the Telegraph, it’s not specific to property sales people, however they calculate similar costs across various sectors…
Watch the below interview which was aired on Property Panorama, featuring our director Alex Wiffen discussing the property recruitment industry.
Click on the below image to watch the interview…