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Your real estate venture has taken off and you’ve assembled a team of new hires to help get your operation running in high gear. Now that you’re growing your business, you’ll be faced with a myriad of difficult decisions that could have a significant impact on your career.
While this scenario is exciting, growing from a one-person startup to an entire team can be confusing and complicated. Processes, infrastructure and management techniques must all evolve in order to retain staff and keep your business healthy.
From retaining and training talent to setting up efficient digital systems and detecting fraud, we’ll help you avoid any missteps as you establish your workforce.
How to retain real estate star talent
Once you’ve built a team that works well together, staff retention becomes a constant concern. As a real estate developer or investor, there are multiple strategies you can employ to ensure your staff stay happy right where they are.
Profit-sharing/share ownership programs:
Some companies have found success with profit-sharing and share ownership programs, which help employees feel both valued and motivated. You can either create an Employee Profit Sharing Plan (EPSP) or an Employee Share Ownership Plan (ESOP), depending on whether or not you’re willing to give up equity.
With profit-sharing, an employer puts a percentage of their annual profits into a savings account, to be distributed to staff at the end of the year. This way, employees feel a personal connection to the company and will likely stay longer. Keep in mind, employees are still required to pay income taxes on the amount they earn through this program.
If you opt for the employee share ownership plan, employees can buy stock in your company, thereby giving staff a direct financial stake in the company’s future. Including vesting procedures in the program ensures employees must remain for a certain period of time before being able to purchase or cash out their stocks.
Human-centric leadership philosophies
While incentive programs are an important factor in retention, so is your leadership strategy. A team that feels seen and heard will work harder and more efficiently. Human-Centric leadership has become increasingly popular post-pandemic, as businesses begin to understand the importance of focusing on their employees.
While ‘good leaders’ used to be judged on their accomplishments, we’re now seeing a shift away from celebrating trailblazers to celebrating teambuilders, with skills like the ability to develop talent, motivate employees and promote diversity becoming just as valued.
Communication is key
When developing your real estate portfolio, it’s essential you have effective communication with your team. Successful leaders encourage active communication within their teams. As a team lead, it’s important that you avoid monologuing or passive listening, because effective communication means every employee has the right to speak up and feel heard. Not only does active listening help with retention, it also ensures nothing important falls through the cracks. A daily morning meeting is a great way to motivate your employees and get an idea of where your team stands.
Additionally, it is critical to your staff development and advancement to allow your team to own their mistakes without being chastised. Avoid placing blame and instead use these moments as learning opportunities.
It’s difficult to communicate effectively if your company isn’t organized. Streamlining communication through a Customer Relationship Manager (CRM) tool enables employees to find important data and messages, so everyone is on the same page.
Tips for training a successful real estate team
Before deciding on the best training method to use, you need to identify what type of team you’re building, as this will affect how you train your employees. The following are three popular philosophies for training real estate teams.
- Mentor/Mentee Model: In this model, you recruit and train team members, and then once they graduate from mentees to mentors, they take over responsibility for training new hires.
- Team Lead Model: This model centres on you and your work philosophies. Your employees are trained to extend your personal brand.
- Lead Team Model: This philosophy focuses on generating leads. Training focuses on lead generation and marketing.
Creating a culture of life-long learning is another critical tip when forming a new team. Training rarely has an end date. Team leads who encourage learning and continuously upgrade training have confident staff who are able to keep up with the ever-changing real estate industry. Keep in mind that as jobs evolve, new skills will have to be taught or even re-taught. It helps to have a training road map in place to ensure employees are always up to date on the latest skills needed in the field.
Setting up efficient internal systems
A solid real estate team should have internal systems in place for everything from ordering office supplies to organizing invoices, to reviewing inbound leads and closing deals. Well-structured internal systems help increase overall profitability and efficiency. We recommend linking all internal systems to your central CRM. Not only do these systems save time and simplify workloads, they also help address inefficiencies and provide quality control.
How to identify which systems you’ll need:
While it’s helpful to have a system in place for every office task, these are the most important in a real estate office:
- Marketing and Lead Generation: You can deal with new properties coming on the market quicker with an organized, efficient system. Marketing systems will help you organize any campaigns and can even assist with social media posting.
- Fostering Relationships with Buyers and Sellers: Internal systems can help you seamlessly communicate and interact with buyers and sellers, following up on leads and evaluating how serious each party is.
- Evaluating a Property: This is a complicated task that requires a simple solution. An easy-to-use tool will ensure you have a list of everything that needs to be checked so that you don’t miss anything during an evaluation.
- Creating a Deal Structure: When working on a deal, it’s important to have a system in place to help you determine which properties you’ll be looking to transact on as well as the type of financing you would be looking to accept or take on a given deal.
- Accounting: Definitely set up an accounting system for your office. We can’t stress this enough. No matter what your team’s focus is, you’ll need to organize cash flow, invoicing, bill payments, and taxes.
Automating your finances through cloud-based solutions
Organizing your finances is often the most time-consuming part of running a workforce. Even if you have an in-house accountant or bookkeeper, it’s ultimately your responsibility to ensure payments are coming in on time, suppliers are being paid, invoices are being issued, cash flow is consistent, receipts are filed, and income tax and GST/HST payments are completed.
Cloud-based and digital accounting solutions can take the financial weight off your shoulders and help automate these responsibilities so you can focus on your business. Having this type of internal system in place can help you:
- Identify and capitalize on opportunities
- Streamline accounts payables and receivables and organize expenses
- Improve the timeliness and efficiency of your invoicing
- Save time compared to manual processes
- And upon implementing the above, you should be in a position to maintain your cash flow requirements.
Fraud Prevention through Internal Systems:
According to the Association of Certified Fraud Examiners, the real estate and construction industries have the highest number of reported fraud cases and losses due to fraud. Common fraud schemes in real estate include bribery and corruption, bid-rigging, billing schemes, cheque tampering, expense account abuse, and falsifying payments. Fraud is more easily committed when there’s a lack of clearly defined duties in a team, meaning an employee is able to get their fingers in every part of the operation. Transparency is critical.
Rather than trying to deal with fraud after the fact, it’s better to be proactive and set up internal systems for identifying fraud. These systems should be able to:
- Compare your budgeted costs to actual costs
- Flag any changes to your budget so you can identify why the changes occurred
- Review any bid selections to ensure you’re complying with proper protocol and policies
- Analyze general/soft accounts, like contingencies
- Conduct random checks of outgoing payments to identify phantom suppliers or inflated billing rates
A workforce to be reckoned with
Setting up a solid workforce can be a long and complicated process, but with the right training procedures, effective communication and organized internal systems, it will ultimately lead to increased growth.
At Zeifmans, we have years of experience working with real estate developers and investors and are happy to offer support and guidance as you build your team. Contact us to get started.
