As a Director in the estate agency recruitment space, one of the things I get asked the most is ‘what should I be paying my staff?’
Historically, remuneration has always been fourth or fifth on a candidate’s reason to leave a job, trumped by lack of training, career growth and flexible working since the pandemic and poor management.
As demonstrated in Hintel’s recent article regarding the cost-of-living crisis, employee remuneration and benefits package is becoming more and more relevant to a person’s decision to stay in a role or dip their toes in the job market.
A recent survey conducted by deverellsmith and Hintel revealed how property personnel felt toward industry pay and benefits packages as well as career opportunities. This unearthed common trends and specifically how estate agents felt in their current role and prospects.
The results were interesting, although nothing was a particular shock, one of the more interesting statistics was around people’s ‘desired increase in salary’.
According to the ONS, job movers last year increased their average salary through changing jobs by 7.3%, yet according to our survey, the average desired increase in basic salary was a whopping 23.5% in estate agents. Unsurprisingly across all sectors of property that we surveyed, (development, commercial, property management, investment, and new homes) estate agency had the lowest average basic salary of £24,800 in London and £18,760 outside of London, although of those based outside of London over 50% had a car allowance on top of their basic salary.
This is a trend which isn’t going away, in our report earlier this year DNA of an EA, we highlighted that 43% of negotiators wanted a higher basic and this is still very much the case.
For an estate agent in the ‘noughties’, the career options were fairly limited and once your career was on the path of property sales or lettings, it was difficult to get out of the rabbit hole. Not so much these days, particularly with transferable skills being highly sought after in the PropTech and supplier space. This area of real estate is constantly growing, and business development roles are generally better paid basic salaries, although initially, employees may need to take a step back financially to step forwards longer term.
A significant draw for business development roles or those of a similar vein is that they offer a better work-life balance, with no weekend hours involved. Other benefits on offer include private medical care, which is rarely offered in estate agency roles, particularly at trainee to manager level.
New Homes has always been a sector with better basic pay but (normally) less commission, meaning it could be a good choice for someone wanting less risk with their pay packet fluctuations. deverellsmith’s data provide evidence of an increase in job applications between March and June 2022, of those wanting to transition to the New Homes sector from estate agency. 1 in 6 applications for a New Homes Sales Consultant role are from an estate agency professional who has no previous experience in the New Homes sector.
With a desire to increase their guaranteed salaries by nearly 25% and potentially alternative employment options available, how can estate agents keep their employees?
Of course, the obvious way to do this would be to pay them more, or at least in line with the Living Wage which is voluntary.
According to livingwage.org.uk the new Living Wage for the UK (£9.90) is 99p per hour more than the current government minimum wage for over 23s (£8.91) and the London Living Wage is £2.14 per hour higher.
A full-time worker paid the new £9.90 real Living Wage will receive over £1,930 in additional wages annually compared to the current Government minimum. For a full-time worker in London, this figure rises to over £4,170. The new UK Living Wage rates will also be 40p higher than next year’s NLW of £9.50, due to come into force next April.
The difference will be worth around £780 per annum.
Companies are signing up to join the scheme daily and recently Taylor Wimpey and Persimmon Homes have joined the list of employers committed to paying their employees in line with living costs.
How about commission and bonuses I hear you ask. Well, with 56% of the respondents to our survey having a bonus scheme in place, this is clearly a factor in earnings along with 25% having a commission structure and 6% with profit share or an LTIP scheme.
The estate agency sector has always applied a payment model of a low basic salary and high commission paid upon performance. But perhaps those days are behind us and with the demand for more stable salaries increasing, employers need to consider restructuring their pay or find new or alternative ways to reward and retain their employees.
If would like to discuss how your salaries align with the current market or want to know more about alternative ways to remunerate your employees, get in touch.