Does the real estate industry really need HR? In short, the answer is YES! Even though a majority of the agents in your real estate office may be independent contractors, you will still have W2 employees. Human Resources can play a pivotal part in the organization, supporting both W2 employees and independent contractors. This blog will focus on three ways HR can support the real estate industry by going into more detail about recruitment, compensation plans, and performance evaluations.
1. Help Attract and Retain Top Talent
When you think of top talent in the real estate industry, you need to think of it twofold. First, attracting your real estate agents, who generally work as independent contractors. Then, hiring your administrative staff and location managers, who are typically your W2 employees. Before even going to market, your HR resource has the knowledge and experience to help you understand the critical difference between an employee and a contractor, and make sure you aren’t misclassifying your team.
Before recruiting any team member, you’ll want to work with the HR team to first understand what position you are looking to fill and what kind of candidate you are looking for. This will include responsibilities for the role, how they will integrate into the culture of the organization, and deciding what qualifications and experience you are looking for in a candidate. Once these questions are answered, HR crafts a job description to speak to potential candidates. During the recruitment process, the Human Resource team determines if the candidates are qualified for the position and ensure they are aligned with the core values of your agency. If all goes as planned, you offer the candidate the position.
Once you’ve hired the candidate, how do you retain them? The HR team supports you in keeping top talent by:
- Recognizing high performing members
- Provide ongoing training and educational opportunities
- Engaging with the members of the team
- Ensuring the company is living out their core values
2. Develop Compensation Plans
An HR consultant supports your real estate company by developing a compensation and benefits plan for your agency. These plans will be different from most organizations as real estate agents are typically paid on a commission basis only. The HR team will focus on creating contracts and statements of work that will attract agents and will encourage them to exceed agency goals. Besides the agent’s compensation, HR will also help you determine how you pay your W2 employees. The compensation plan for these employees will be similar to other organizations. The HR team will conduct benchmarking to understand your own internal pay philosophy and how you are placed against the market regarding compensation.
3. Performance Evaluations and Support
The HR function can also provide guidance with performance evaluations and support. Having honest and open communication helps everyone in the organization move forward toward goals and become successful in their roles.
When providing support and performance feedback for real estate agents, it is important to talk about what is working for them, what kind of support they need, and what they want to adjust moving forward to see better results. As a reminder, these members of the team are independent contractors and may be reluctant to participate in performance management discussions. However, this is where HR can support to ensure these are open ended communications that help them grow in their real estate agent experience. Since real estate agents tend to be classified as independent contractors, this is more about providing ongoing support for individual growth, not necessarily about dictating how they should do their work or tying their compensation to performance metrics.
For W2 employees, performance evaluation discussions should take place multiple times a year (preferably each quarter). Your HR team creates a detailed performance evaluation document that helps the employee and their manager have impactful conversations. The performance document will have sections for the employee to talk about their success over the specific time frame, what their future goals are, and any feedback that their manager should be aware of. Similar to the agents, these conversations will also be honest and open communication. The ultimate goal of these conversations is to support and see the success of the employees and encourage ongoing behavior that aligns with the goals you’ve established for your agency.
Is Your Real Estate Agency in Need of HR Support?
If you read this blog and have realized your real estate company might need HR support, then you have come to the right place. Our dedicated consultant team would be happy to help you and your company achieve great success with HR support. Contact us today!
