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Make Better Recruiting Decisions Or Pay the Price

Tips from the Experts Cabot Jaffee

Cabot Jaffee
Maitland, FL
Most brokers don't have formal systems for interviewing potential agents, but those systems are becoming more important than ever as regulators take an increased interest in real estate industry practices, according to Dr. Cabot Jaffee, who joined recruiting expert Carol Johnson in a teleclass sponsored by on Aug. 7.

�There have been a number of Supreme Court cases over the last five years that have put at risk the interview and testing tools companies use and that call for treating people fairly and making sure you have the same data on all people before making decisions,� says Jaffee, president and CEO of AlignMark Inc. in Maitland, Fla.

�In a lot of organizations, especially in real estate but also outside, the interview process becomes question and answer, and if interviewers take any notes, it�s doodles as the interviewee is talking,� Jaffee adds. �They don�t collect notes on observable behaviors and statements. They don�t make sure they�re measuring and actually rating interview answers. They�re certainly not documenting interviews. And in a lot of cases, some questions aren�t relevant to whether the person will work out.�

That could lead brokers into a minefield, says Johnson, president of The Recruiting Network based in Schaumburg, Ill., which offers monthly teleclasses geared to help brokers make better recruiting decisions. �With the U.S. Department of Justice breathing down several companies� necks on related issues,� she says, �I think we�ll see more brokers paying attention after their attorneys look at how they�re actually running the recruiting process.�

Jaffee and Johnson offered insight on why brokers sometimes go astray in evaluating agents and how they can better recruit, screen, and choose agents. Here are just a few:

� Ultimately, the best predictor of whether agents will be successful is whether they have the skills and motivation to do the job, says Jaffee. Can they recognize buying signals? Can they manage a sales process? Can they analyze customers� needs before presenting solutions? Then, will they fit into this particular organization, team, and even with their manager? One tool to help brokers answer those questions is the Real Estate Simulator, a computer program offered by Jaffee�s company.

� Bad hiring decisions cost companies much more than most brokers think. Jaffee predicts that each bad hire costs brokers double the amount of revenue they expect to generate from an agent. For instance, if successful agents at a company earn $100,000, a washout hire costs the company $200,000, he says.

� Too often in real estate, interviews are dominated by brokers trying to sell recruits on their company rather than identifying whether recruits are right for the company, says Johnson. The result is production that�s heavily skewed, with 90 percent of agents producing little and 10 percent raking in all the business. Make sure interviews are balanced between information gathering and recruiting.

� The best interviews are behavior-based, says Jaffee. Those involve explaining scenarios to candidates and asking them how they would handle them or have handled them in the past. �For example, ask a candidate: �Pretend I�m a customer and you�re a real estate agent, and I just told you that I spoke to two of your competitors who�ve promised me all kinds of things. What would you say to me?�� explains Jaffee. �Then make notes on what candidates say and evaluate how effective the answers were. That makes it very easy to compare candidates against others who�ve gone through the same questions.�

� Nine out of 10 real estate companies keep no hiring records, says Johnson. �Even companies with 20 or 30 offices don�t have standardized test or interview questions or standardized items to send out when people walk in the office or make inquiries.� You may not get into legal trouble if you�ve got a mom and pop brokerage and you hire only relatives, but big companies need hiring systems badly, she says.

� Using a checklist during interviews helps you make sure you�ve covered all the information relevant to a potential agents� success, but it also helps you document that you haven�t asked inappropriate questions. �The biggest problem is a question like, �Tell me about your kids,�� says Johnson. �If you ask many interviewers to name protected classes, they can�t tell you. That�s another lawsuit waiting to happen.�

� Not only does having a diverse group of agents help you avoid claims of discrimination, it also helps protect your brokerage from being raided by your competitors. �It�s harder to rob a company of its agents if you have more diversity and agents aren�t in such cliques that when competitors get one, the others fall like dominoes because they�re interdependent on each other,� says Johnson.

� Be careful of the image you present to candidates. �How important is it for the interviewer to be on time?� asks Jaffee. �I�ve seen so many busy managers who think, �These people are here for a job; I can make them wait five minutes.� What kind of image does that portray about your company to somebody you may want to hire?� Johnson agrees, noting that the candidate cooling his heels in your lobby might be one with a major network and a major potential for success.

� The value of resumes and reference checks has decreased. �People tend to obviously exaggerate, partly because they know it�s almost impossible to double-check things,� says Jaffee. �And no one ever lists someone who�s going to give a bad reference.� Because of that, Johnson recommends that brokers run candidates� names, along with such terms as �arrest,� through major search engines like Google and Yahoo!. �I�ve found some interesting things,� says Johnson. �Recruits have been involved in some kind of legal action or arrest. Child abuse was a very recent one.�

�What we�ve seen over the last two years is that a lot of real estate organizations are growing up very quickly,� says Jaffee. �They�re realizing they need to have human resource and human capital services dedicated to people within the organization because that goes a long way.�
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