13 Jun Overcoming High Turnover Rates: Lessons From The Real Estate Industry
High turnover rates pose a significant challenge for businesses across various industries, with the real estate sector being no exception. In the dynamic world of real estate, the attrition rate among agents remains alarmingly high. In fact, according to 2020 estimates, up to 88% of all new agents quit before they reach 5 years in the industry. HR professionals who belong to different industries can learn a lot by taking a closer look at the causes of this particular issue in the real estate sector. At the same time, scrutinizing the roots of high attrition in real estate can help businesses prevent the same from taking place in their own sector.
The Causes of High Turnover Rates in the Real Estate Industry
There are several factors that contribute to the real estate industry’s persistently high turnover rates. Understanding these causes is crucial in formulating effective retention strategies. The primary culprits are as follows:
Lack of Training and Support
Insufficient training programs and lack of ongoing support can leave real estate agents ill-prepared to navigate the complexities of the industry. Many do not find sufficient guidance that can help them grow in the profession, and this lack of mentorship hinders their professional growth. This causes stagnation in new agents and contributes to higher turnover rates.
The real estate industry offers high rewards to established agents, but economic stability is hard to come by for agents who are just starting a career in real estate. The commission-based nature of the industry often results in irregular and unpredictable income streams. Agents who do not have enough to support themselves and fulfill their financial obligations while finding their footing may seek more stable career options. This, in turn, prompts agency HR managers to speed up their recruitment process through the use of solutions such as the BrokerKit real estate recruiting program.
Intense competition within the real estate sector places agents under immense pressure to secure clients and listings. Agents who struggle to establish themselves amidst fierce competition may become discouraged and exit the industry.
Limited Career Growth Opportunities
Successful real estate agents have learned to find their own direction and move at their own pace. Unfortunately, the absence of clear pathways for career advancement can be demotivating for people who are used to traditional organizational setups. Without tangible prospects for growth and progression, these agents may seek alternative career paths.
Work-Life Balance Issues
The demanding nature of real estate work, with its long hours and irregular schedules, often comes at the cost of maintaining a healthy work-life balance. This imbalance can result in burnout and dissatisfaction, prompting agents to seek industries that offer better equilibrium.
How HR Professionals Can Improve Retention Rates
HR professionals can draw valuable insights from the real estate industry to combat high turnover rates and promote employee retention. Consider the following strategies:
Comprehensive Training and Mentorship Programs
Companies can invest in training initiatives and mentorship programs to equip employees with the skills and knowledge needed to thrive in their roles. Providing ongoing support and guidance to young professionals and new hires fosters a sense of professional growth and encourages long-term commitment.
Financial Stability and Incentives
Implementing measures to address income instability, such as offering base salaries, performance-based bonuses, or financial stability programs, can alleviate the financial concerns that lead to turnover. These can help professionals who are facing financial instability tide themselves over for some time until they learn the ropes and adopt strategies that can improve their productivity.
Creating a Positive and Collaborative Culture
Cultivating a supportive and inclusive work environment is essential in a growing and thriving workplace. Encouraging teamwork, recognizing achievements, and fostering open communication channels contribute to higher job satisfaction and loyalty among employees. The supportive environment and the presence of colleges that can encourage their growth can prompt young workers to stick with their place of employment for as long as possible.
Clear Career Progression Paths
Establishing clear pathways for career advancement and providing opportunities for professional development instill a sense of purpose and motivation in employees. If employees have something to strive for and look forward to, they are more likely to feel fulfilled in their roles. HR professionals can implement mentoring programs, internal promotions, and skill-building initiatives to support career growth and skill transfer in their respective organizations.
Work-Life Balance Initiatives
Promoting work-life balance is vital for employee well-being and retention. Companies that offer flexible work arrangements, promote self-care practices, and foster a healthy work environment can reduce burnout and increase employee satisfaction. At the same time, these organizations will become sought-after places of work for people who want to pursue personal fulfillment while also nurturing the growth of their careers.
The real estate industry serves as a valuable source of lessons for HR professionals seeking to overcome high turnover rates in their own organizations. By addressing the root causes of turnover and implementing effective recruitment and retention strategies, businesses can improve employee retention, create a thriving workforce, and reduce the cost of recruitment, onboarding, and training.
About The Author
Germaine Ignacio is a freelance writer. As a Psychology major, she is interested in how investing in personal growth and happiness can improve professional productivity. She is also an avid baker who lives with two cats.