Estate agency special: people, profits & career progression explored
When established estate agency Douglas & Gordon went into administration in early 2023 – after being sold to Foxtons two year’s earlier and the sales side transferred back to the original CEO – it brought the nature of agency today into sharp focus. The brand opened its first office in Sloane Square in 1958, and vast swathes of London were eventually covered by its final tally of 18 offices, staffed by a team of loyal and very much career agents.
The end of Douglas & Gordon in its traditional guise provided an unscheduled opportunity for Viewber’s Ed Mead to ruminate on how agency used to be run and how it is today. Ed was able to draw on 25 years of experience with Douglas & Gordon to aid in his deliberations, having worked there as a Director and a Non-Executive Director. There is much insight to be gained from Ed’s vlog but a recurring theme is career development and direction.
Have a listen and you’ll find many of Ed’s thoughts have been echoed in a new survey by Nested. The online agency wanted to identify the staff turnover rate in property, and why employees felt compelled to move from one company to another.
Nested’s analysis of Government data found the average annual staff turnover rate in agency, which includes sales, lettings and associated businesses, was 27.8% – just behind the average for all industries combined at 29.3%.
Armed with these figures, the online agency questioned almost 300 property professionals to find out why people resigned from their jobs. Firstly – and encouragingly – the data showed that employees are actually recirculating in the agency sector, with fewer than 10% saying turnover is because people are looking for alternative jobs outside of the property industry.
Instead, turnover is fuelled by more personal reasons. Of those questioned, the search for a higher salary was the predominant reason for resigning (36%). This was followed by employees looking for an improved role (16%), leaving due to a heavy workload (16%) and desiring a more flexible work/life balance (11%).
Ed’s long-standing property career and connections in agency have often led him to discuss the different approaches to agency. A point he often returns to is profit over customer service and how staff behave, perform and progress their careers within this particular framework.
Often observed are the habits of agents at large and highly visible networks. Long hours, intense competition but rich rewards are linked with burnout – with agents perhaps able to complete two or three years of employment before looking for a change in direction. Conversely, there are the professionals who survive – and even thrive – within this style of operation. These candidates frequently leave to set up their own agency brands, taking their past employer’s values and work ethos with them to create a self-perpetuating style of business.
Of course, there are many nuances when analysing working styles. It is highly possible – and proven – that a volume agent can deliver on client fees, company profit and customer service, and Ed highlights how there is room for all agents and their unique approaches.
What keeps drawing Ed back into the conversation is whether the pursuit of profit is eroding the art of customer service, and whether it’s also affecting personal satisfaction levels in the professional sector. Returning to the main reason agents leave their roles – the search for a better wage – Ed questions whether employers are willing to let good people go because higher wages may reduce profit? Are margins so slim they can’t afford pay rises for their best staff? We know it’s not as clear cut as above but a timely set of new figures were recently published, adding a little fuel to the fire.
In the same month as the Nested analysis, the trade website Property Industry Eye carried a piece of research by Company Insights that cast light on the amount of profit individual agents make for agencies. After analysing the finances of almost 50 agents, including groups, subsidiaries, independents and online operators, it found profit per employee was as high as £56,215 for an independent.
Looking at ‘profit per employee’ figures for specific agency brands, a random Company Insights selection revealed an individual working at Foxtons yielded £5,978, rising to £14,281 at Peter Alan (Connells) and £26,065 Arun Estate Agencies, with figures from 2021.
Maybe there is a correlation between big agency networks, turnover and profit? Maybe the days of an agent splitting commission with a colleague from another office – or even a rival from another agency – in the quest to deliver impeccable customer service are over? Maybe there are alternative ways to keep turnover low and income high? The latter brings us to part two of the Nested research
While it’s good to know why people move around the industry, it’s even better to know what would have kept them loyal in the first place. When Nested further questioned property professionals on what may have reduced turnover, better pay did not take the top spot. In fact, it was flexible work patterns that would have been most welcomed – an answer given by 18% of respondents. A further 16% said more trust and less micromanaging would have helped, and another 16% said consistent pay or enhanced bonuses would reduce turnover. In addition, 12% cited a better company culture.
Ed notes that back in the 1980s and 1990s when at Douglas & Gordon, he often worked shorter hours and took more holidays than his counterpart and good friend, Peter Rollings, who worked at Foxtons. Of course, there is also an acknowledgment that one party had been more profitable than the other but with Nested’s turnover research freshly published, is it time to question the true definition of a successful property career? We’d love to know your thoughts.
