Contingencies

It’s not unusual for a recruiter to work on a contingency – you pay them if you happen to hire one of the bodies they send your way. It’s also not unusual for companies in certain industries to recruit salespeople on contingency – they’ll pay a commission if the salesperson sells anything. It’s a common practice in Real Estate for salespeople to pay a rent of sorts – for their desk, phone, chair, and computer. As independents they could actually pay out more than they collect if their sales don’t take off.

Real Estate is a great example of an industry where the broker/owners prefer not to invest in their people because their people are paid on a 1099 basis. The reasoning is the biggest bunch of bull; it’s self perpetuating: “Hey, we’ll let anyone come to work for us. As long as they’re willing to pay for the space they take up, why not?”

Why not? I’ll give you a bunch of reasons:

• It supports the hiring of conditionally committed people;
• It supports the backward thinking of not investing in your people;
• People on boarded from a “we’ll take anyone” hiring criteria are usually ineffective;
• Ineffective people don’t get many listings and don’t sell many houses;
• Ineffective people don’t impress home buyers or sellers;
• Unimpressed people don’t refer your firm;
• Stronger salespeople won’t find your firm an attractive place to work;
• Salespeople with potential for greatness won’t have good role models from whom to learn;
• You have little ability to control the growth of your firm;
• You still have to bring most of the business in yourself;
• It doesn’t cost a penny more to bring on good people;
• Strong people can be developed; weak people can’t;
• It’s stupid!

It makes sense for every company to incorporate an accurate sales specific pre-employment assessment into their recruiting process. It even makes sense for a company that operates similarly to a Real Estate firm. They should be certain that the salespeople who come knocking on their doors will be productive members of their team rather than rent-paying squatters that take up space. It doesn’t matter what kind of business you’re in. Having an effective recruiting process that incorporates the use of an accurate sales assessment early in the process is as important as an accounting system that provides cash flow reports. If you don’t have an accurate analysis of how much money you’ll have available, you can’t plan for how you’ll use it. Similarly, if you don’t have an accurate analysis of how much salesperson you’ll be getting, you can’t plan for how much business they should be expected to generate.