Recruiters are warning of a ‘brain drain’ in the estate agency high street industry.
One, Anthony Hesse of Property Personnel, said “a significant number” have gone to work for online agencies.
Deverell Smith, chiefly specialising in the London market, said that huge attrition in staff at some of London’s best known estate agency brands – including national names – means that firms in the middle market are having to keep on and on hiring.
Both Property Personnel and Deverell Smith said that good people are leaving the industry.
Andrew Deverell-Smith, founder of recruitment company Deverell Smith, said that some London firms are seeing an attrition rate of 70% a year, and climbing.
He said that already high staff churn is increasing due to a combination of the cost of living in London, very low basic salaries and poor work morale.
Deverell-Smith told EYE: “In London zones 1 to 4, it is common to see basics of £10,000 to £14,000.
“One board director I spoke to recently said that they were effectively paying the minimum wage, so why would anyone want to go and work for them.
“I said that was a very good question.”
Firms are not, however, making redundancies because they don’t need to, said Deverell-Smith.
He went on: “But what is happening is that a lot of very good people are leaving, and being replaced with someone more ordinary.
“There is a flight of talent from the industry.”
He said some are permanently leaving estate agency, often going to tech start-ups which he says “are on the front foot” when it comes to offering a dynamic work culture.
He went on: “If they are not leaving for other industries, then they are leaving for other parts of estate agency with broader prospects.
“For example, the very top brands – Knight Frank and Savills – offer really interesting and varied careers. They also pay much better basic salaries.”
He said: “Over the last 24 months – since Osborne introduced his Stamp Duty reforms – the London market has been very difficult.
“There is a lack of energy and positivity within some of the biggest names. Four or five years ago, London agency was a completely different place to work.
“It used to be good fun and energetic, but people are now working in very negative environments.
“There are a lot of weary senior managers and they are not inspiring their staff.
“If you are in the middle of a two-year cost-cutting exercise, it’s not going to be much fun.
“However, the market will recover and one day the sun will come out.”
However, he said that too few firms are thinking about the leadership in the years ahead – and need to be hiring strong and able candidates now.
He said they need to be more broad-minded in their recruitment approach: “They always ask for the same thing, someone with two or three years’ experience. But that person may have been little more than a door-opener.
“But someone in their 40s or a woman who has taken time out for children may have a lot to offer, and really understand sales.”
He said that the industry is getting younger. “I am all for youth, but a first-time buyer in London is now aged 38 and may be unwilling to take advice from a 21-year-old who doesn’t own a home.”
He said that at the very top end of the market, which he says is “bursting back to life”, it is a totally different story.
Here, some firms are now looking at their top tables: “As a recruitment company, we are doing some of the largest deals we have ever done. For example, we are about to place the chief executive of a big London brand.”
Negotiators pulling off sales of prime-homes worth £25m and more, are earning £250,000 to £450,000.
He said: “It is a fascinating time in the industry – but in London at least, it is a difficult market in the main.
“The recruitment industry as a whole will have had more vacancies to fill this year than last, but for the sake of the future, estate agents must be more open-minded as to how they recruit and what they are offering.”
Deverell-Smith concluded: “Despite the challenges, I remain very confident and optimistic. I love this industry and want to help it survive and thrive.
“We have designed a number of bespoke solutions to our clients as a result of the challenging conditions they face which enable them to tackle many of these challenges head on and attract outstanding talent.”
Another recruiter, Joshua Rayner who deals in markets across most of the UK, confirmed the huge growth in the number of vacancies.
He said his firm, Rayner Personnel, which is active across the UK, dealt with 629 vacancies last year. So far in 2017, it has had 1,987 on its books.
He said: “Everyone wants the same people, which is creating a shortage of good candidates.”
Anthony Hesse, managing director of Property Personnel, said: “The market is pretty challenging at the moment. It’s polarised, with sales struggling much more than lettings. The two usually mirror each other, but this year we have noticed far more positivity in the lettings side of the industry.
“The market is both candidate and employer driven. There’s a massive shortage of the right quality candidates out there at the moment.
“Clients’ expectations have risen and they’ve set the bar much higher than perhaps three to four years ago when the market was flying. Now they are very careful where they spend their hire money.
“So clients are much fussier. But then, so are the candidates.
“The good ones know they are in demand because they are aware that there is shortage of them, so they are being pickier about who they choose to work for. This means there is something of a stagnation in the industry, with the two sides eyeing each other up and down.
“A lot of employers think that they are in the driving seat because people want to work for them. But candidates know they are in demand, so they have high expectations too.
“In terms of movement, there are a lot of people registering – but what they are looking for is not really available in the market place. In sales, which has been hardest hit, a significant number have gone to work for online agencies, and quite a lot of people have moved out of the industry.
“What’s changed with vacancies is that they now represent the junior level of jobs.
“Employers are much more open to considering trainees because they have to look more closely at their costs. In lettings, people are still moving around within the industry, or looking to move into other sectors where they can utilise their lettings skills – such as support roles in property management or the PRS. But in both sales and lettings, all of them are hankering after the right work/life balance.
“Vacancies have been quite consistent throughout the year. Whilst there are shifts on the sales side, they are just much more junior over all. In lettings, there has been a significant increase in the number of business support roles – property management in particular.
“Ultimately, the ideal candidate everyone wants is someone with 12-18 months experience: a typical second jobber.
“But those people are thin on the ground – because at that stage, either they stay where they are, or they get out of the business altogether.”
[Editor’s note: The recruitment firms mentioned here are entirely unconnected with the one referred to – although we have chosen not to name it – in the next story.]
Recruitment companies have a place in the world but not in High street agency for branch roles.
Rich for the recruiters to say pay more, they going to drop their extortionate recruitment fees?
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Seriously?
I’ve worked in recruitment, I think they serve a fantastic purpose, if you have time to sift through hundreds of CV’s pre screen every applicant then select the best three for interview then you are not doing your job.
Your job is generate business for your company, not the whole recruitment process.
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My job is to run the firm, staff recruitment, training and retention is a big part of it.
If you are are getting 100’s of CV’s your advert is not very good. You want to find quality applicants appeal to the best not just every Tom, Dick and Harry.
Also most agents know the competition, they know the better agents. I make sure if we have a spot coming up we approach them before we advertise.
Recruitment companies for branch level is just not needed. If you are looking for an area manager or head office member of staff to help with strategy, then yes its well worth it.
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Actually, a friend of mine got his job as a trainee neg through a recruitment company and went on to be a director of the company expanding it from 2 branches to 7 in just a few years.
The recruitment consultant rang the owner of the estate agent and said I think I have a rising star for you, please give him an interview.
The owner said I don’t have a vacancy but I’ll interview him as it’s always good to have people in reserve.
Obviously my friend was so good he was hired immediately and the rest is, as they say is history.
Did the recruitment consultant (also a friend of mine) earn her keep?
Of course she did, she is a brilliant recruitment consultant (and also a director of her company too!).
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The world has changed
23 years ago I was earning £45000 as a branch manager in a large town with only 8 agents covering 100 square miles – now there are fifty agents in the same area
Recruitment costs are too high
Agency has been dummed down by on-liners, and only business owners expect to earn decent salaries these days
A shame but a reality – you just have to look at last nights news to see the lack of wage growth in the UK
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. It’ s a terrible job with no support from govt. Trading bodies do nothing, Rightmove ******** everyone except the onliners . no point in playing a game that’ so 1 sided.
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Estate Agents’ salaries outside London are pretty poor.
In April next year the minimum wage for over 25s goes up to £7.83. That’s £19,543.68 per annum for a 48 hour week.
As an estate agent I NEVER worked a 48 hour week.
For most of my career I worked about 60 – 70 hours a week. In these tricky times a good neg is going to have to work at least that hard.
Basic salaries at £10-14k is absolutely criminal.
FFS – I got paid more than that as a basic in my second year as an estate agent in 1993. That’s 24 years ago…!
The number of estate agency branches has doubled since 2004.
The commission (percentage) has halved in that same time.
The value of property has gone through the roof.
The commission per transaction is marginally lower, but the effect of inflation means that it is worth considerably less.
So we have double the number of agents fighting over a shrinking pot of money.
Oh dear…
BTW – My commission at the time was outstanding and I do not regret a single minute of it. I admit that I count every minute at work as “working” – I never took a lunch break, if I had time it was usually in the car between appointments.
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No Estate Agent can really say recruiters are too expensive when their fee is usually similar to one sale…. plus it’s money well invested if you make the right choice and get 5 years out of someone who is hitting target every month. It’s a two part process they send you the applicants most suitable it’s up to you to decide. Whilst it’s wise to get a “newbie” who you can mould into what you want, you have to look after them, my first estate agency job I was there for three years and they invested a lot into me. After a bit of travelling I’ve worked with agencies 9 months – 18months at a time because they don’t look after you and it takes time as an employee to find the right agent for you, the same as your clients. I think it’s up to your company/managers to be realistic about the year going forward and find ways to make the job fun and rewarding that way you’ll find staff who will stick out the lull and be there with their experience and drive for when the market becomes more buoyant. If I had this experience as a 19 year old I would have left the industry all together after a year,
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Anyone worried about the 10-14k basic is clearly not expecting to achieve much commission, and anyone with that approach isnt wanted anyway. The good people earn considerably, especially those in central London, the poor do indeed work for a very small amount, but then they leave very quickly as a result. I see no problem here. Other than from a recruiters point of view where people want to clawback the fee they have paid. If recruiters put the right people forward there is no problem there, clearly they aren’t in too many cases.
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The way agencies approach staff & salaries is due a huge overhaul. Agents also need to increase the efficiency of their operations through the adoption of tech. In London living costs are so high how can we possibly hope to attract the best for disgusting salaries? All agency staff should be placed on much higher salaries of £25-35k with bonuses for exemplary results and pooled commission to drive cohesion as a team. London agents should strive to generate £100k+ per head enabling the easy payment of such salaries. Do more with less and deliver a better service to clients at the same time.
Part of the evolution also needs to be a migration away from viewing targets. If you expect your staff to do 5 viewings a day then your employees increase proportionately to your applicants. However, deals is all that really matters. Therefore the focus should be on deals/revenue generated and agents should actually aim to undertake as few viewings as possible to be efficient. This again delivers a better service to applicants- they’d rather see 3 good possibilities with an agent then be dragged around 10 to see 3 good ones.
So many of the old metrics & targets need removing from our industry for us to improve, survive & thrive.
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So you adopt that model do you?
How many staff do you have and pay them that?
London really must be a different world…..
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A quick check online it would appear you have 3 props for sale and half a dozen to let.
You have 6 members of staff including yourself, if you average out 30k a staff member than add in these bonuses that you feel staff should get you are running a wage bill inexcess of 200k!
Best of luck. not a business model i will be adapting anytime soon.
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I’ve resisted getting involved with this but I am very passionate about recruitment and I don’t like seeing our ‘industry’ being knocked. However, for the record there are a significant number of candidates I have introduced to estate agency, many of whom now either own their own businesses or are at director level. Added to that, three candidates I placed in jobs are still at the same company over 20 years later. PS we don’t get renewal fees 😉
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