Thursday, March 13, 2008
Wanted: Younger Realtors
I’m not referring to the slowing market and rumblings of a recession–I’m referring to the fact that the industry is facing a serious talent shortage.
It's hard to accept there might be too few real estate professionals anytime soon, given the huge numbers drawn by a market that only recently slowed. But real estate continues to be dominated by older workers, with a median age of 51 among Realtors, and far too few young professionals are entering the industry.
According to a national study conducted by Deloitte Research, it's become a serious problem that young people aren’t considering real estate careers. The report states the industry needs to do a better job attracting Generation Y workers (young professionals under the age of 26) or the retirement of Baby Boomers will have “dire long-term effects" on the real estate industry's work force.
I know there are brokers and real estate associations out there who are launching marketing campaigns, recruiting at colleges, and posting jobs on Craigslist and Monster.com in an effort to reach out to younger recruits already.
Other companies are adapting their traditional procedures to suit young employees, such as offering more access to technology and the opportunity to work in a team and benefit from mentoring relationships.
But is it working?
Not yet. I think the real estate industry will first need to do a little reputation repair before Generation Y considers it a viable career option, because like it or not this high-tech demographic doesn’t believe Realtors bring value to the table.
I recently browsed the Internet for Gen Y’s comments on the real estate profession. Here were a few of the comments posted out there:
- “The future will show that a real estate agent will become less and less necessary over time. The handling of the legal part of the transaction is rapidly being extricated from the hands of the real estate agent.”
- “Technology is eliminating the need for agents to broker transactions. While an agent is driving around one customer, ten other customers are searching the MLS online themselves and wondering why they are paying 3%.”
- “Realtors used to control the process, now with the Internet they are largely unnecessary.”
- “I don't think Realtors will ever be totally replaced, but we sure could get by on a lot fewer of them. Then maybe the remaining ones will actually earn their money.”
Keeping in mind that Generation Y is extremely tech-savvy and tends to be very skeptical consumers who aren’t swayed by marketing and sales pitches, it’s no surprise they have a low regard for real estate as a profession. The industry as a whole will need to engage in public relations efforts to build trust and persuade young professionals of their merit.
Real estate isn’t alone in this battle. Insurance, accounting, construction, manufacturing, and a plethora of other industries are equally endangered by the passage of the Boomers. Our society has changed, and if the industries don’t also change and cater to the needs of the next generation, it will be nearly impossible for them to survive.
The real estate industry’s desire to employ younger agents isn't just about ensuring desks aren't empty when the Baby Boomers retire. Younger agents connect with buyers, whose median age is just 39, according to the National Association of Realtors.
This makes the Gen X and Y consumers an especially hot commodity in real estate right now. Real estate relies on relationship management because most of the business comes from referrals. This is especially true with younger buyers, who trust the referrals of their peers more than anyone else.
According to statistics, the real estate industry is headed towards a rocky and uncertain future. The industry needs to consider the challenges that lie ahead and find ways to bridge the talent gap before it's too late.
Otherwise, this very well could indicate the foreclosure of the real estate profession.
Labels: Generation X, Generation Y, National Association of Realtors, real estate industry
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