As the broking population ages, the industry is struggling with the challenge of bringing in new blood. So how can brokerages attract the best new talent without compromising their bottom line?
As the broking population ages, the industry is struggling with the challenge of bringing in new blood. So how can brokerages attract the best new talent without compromising their bottom line?
The number of brokers under the age of 30 currently sits at a worrying low 6%. Therese O’Neill , founder of Alphabroker Mentoring & Consulting, said there are a number of factors that are keeping the attrition rate high amongst young brokers.
One of the hardest difficulties that new entrants face, said O’Neill, is the need to front up capital until they start turning a profit.
“Most people in our industry are self-employed, or it’s fully commissioned-based, and that can be very hard for someone of that young age who might not have the financial backing,” said O’Neill.
Offering retainers or salaries can help bring brokers in, said O’Neill, but is not a practical option for all brokerages.
“It’s a real challenge. I do think it is one of the keys to rejuvenating the industry, but not a lot of practices are going to be able to do that.”
Inconsistencies in training practices, said O’Neill, are also a disadvantage to many who are starting out.
“Some of [the new-to-industry brokers] are really lucky and they’re at a good broking practice with a good experienced broker that can teach them a lot… and some of them spend a lot of time photocopying and putting post-it notes on things.”
James Pibworth, director of Iconic Home Loans, appreciates well the difficulties new brokers face. Iconic Home Loans currently employs six new-to-industry brokers, with plans to take on more in the coming months.
“With broking everything gets better with time. Those first two or three years are bloody hard, but once you get through that and you’re no longer relying on outside funding then you’re in, and it’s the best industry to be in once you get there.”
Iconic employs 18 senior brokers who act as mentors to the younger staff and receive a percentage from their mentees’ deals. The new brokers have the option of receiving a retainer or working on a commission-only basis.
While the time and effort required to train new brokers is immense, said Pibworth, the benefits of having fresh and innovative staff on his team are well worth it.
“The industry has changed and to deal with that you need people with a young mentality, who are proactive and have a positive attitude towards change and technology,” he said.
The key to successfully bringing new entrants into a brokerage, said Pibworth, is to ensure there are staff available with plenty of time to answer questions and to thoroughly check all the work of their trainees.
“The mentors check everything down to every single lead qualification so that quality is never compromised. It really does mean a lot of work for the mentors.
"It's a great system but you do need a lot of time, you need the staff, the infrastructure and the resources to make it happen."
Despite the challenges, said Pibworth, attracting new brokers is crucial for any business, and for the industry as a whole.
“The industry is getting older and times are changing. There is a lot more regulation now and a lot more technology. I think if you want to move forward as a brokerage and I think if the industry wants to move forward it needs to be with this new generation of broker.”
