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Training - why it is essential to your business
It’s always difficult to get the balance in training right. Some training is heavier on theory, while others prefer more practical learning; some is based on the acquisition of specific knowledge, while other programmes focus on acquiring skills in practice.
Phil Bowden, at management and training consultants Bowden TMS, believes the estate agency sector is particularly split when it comes to training. “For small independents, it’s about productivity – training is about adding value to the business. But the corporates want to see agents get some letters after their names, they see qualifications as particularly valuable.” He believes that’s one way corporates try to even the balance and compete against the local strength of smaller agencies.
Of course there’s currently no legal or regulatory requirement for agents to be qualified. The Office of Fair Trading last year decided that there were no grounds for compulsory regulation of agents. That flies in the face of an increasingly emphatic body of industry opinion which advocates a basic level of training as a compulsory requirement.
Dorian Gonsalves, MD at Belvoir, thinks lettings agents should be regulated and that should require a training commitment and NAEA chief executive Peter Bolton King says training is a real issue – quite apart from other regulatory issues such as registration and protection of client monies. “We are concerned that anybody can just start up with no training, we are one of very few countries where that is the case.”
In the USA and France, being a real estate agent requires degree level qualifications. “We believe that if someone is giving advice on someone’s biggest asset, that person should be qualified, not necessarily at degree level, but certainly qualified to a minimum competency standard.”
NFoPP’s associations such as NAEA and ARLA require members to take the Technical Award, an NVQ Level 3 qualification, roughly equivalent to A-level (though some exempting qualifications are accepted, such as relevant degrees). The Technical Award covers relevant subjects such as law, building construction, property appraisal, and good business practice. Peter Bolton King says the Technical Award has become the basic entry qualification for the industry, despite the lack of regulatory compulsion; “A lot of firms we deal with insist that staff their staff take the Technical Award.” (Lettings agent Edmund Cude also gives staff a £500 bonus when they pass the ARLA exam.)
On the sales side, Peter believes standards are gradually rising. He points at the Property Ombudsman’s 2010 report, in which ombudsman Christopher Hamer stated that the fall in the average compensation amount from £547 (in 2007) to £258 (2010) reflected a diminished gravity of complaints.
Many training company managers agree with Peter that basic training needs to be given a higher priority. Adam Walker says, “McDonalds gives more training than many junior negotiators get. You can’t flip a burger without training.” Yet the cost of giving someone a burger that’s a bit overdone or with the wrong relish is small – the cost of a junior negotiator mishandling a booking could be several thousands of pounds in commission. “The returns of basic training are such a no-brainer, it’s hard to believe companies can miss it.”
Yet miss it they do. Phil Bowden says, “Compliance training is vital; you need to do it for your own defence” – in malpractice cases, the fact that training has been carried out forms a valid legal defence. “But a lot of firms just don’t do it.”
Peter Knight, of The Property Academy, also believes the Technical Award is useful. However, he says, its impact on business performance is limited. “I’m a fan of the Technical Award because anything that raises standards is to be supported, but it doesn’t necessarily make a good estate agent or help them be more productive.” For that, a different style of training is needed, focusing on productivity rather than compliance.
Adam Walker also believes “The two are completely different objectives – some companies do one and not the other, a very few do both.” He warns that some companies get obsessed with health and safety training and compliance training, that have a very limited return on investment. “These qualifications are very laudable but not connected to increasing profitability, whereas sales training should directly increase productivity and has a very high return.”
However, Peter Bolton King believes that compliance and productivity aren’t necessarily opposed to each other. He says, “One would hope that one is linked to the other. Best practice should mean better service, with fewer sales and lettings falling through.” But he admits that while the Technical Award covers business processes and the use of KPIs, “it is not going to do everything as far as productivity is concerned”.
There’s also a huge requirement for continuous training on compliance, as James Trimble, new franchising manager at Winkworth says, “Regulations come, and like HIPs, they go, you have to keep yourself up to date” – one reason that they run regular courses for franchise staff. That’s particularly true in lettings, which tends to be more technical than sales. Peter Bolton King says “some standards we see are appalling” – mentioning recent queries from lettings agents who wanted to know whether they needed to get gas safety certificates for let properties, and whether they had to lodge deposits with one of the registered schemes. It’s only fair to point out that these agents were not ARLA members.
Moving beyond compliance training does seem to be where the returns are. Sales techniques can greatly improve productivity and profitability; even simple things such as training staff to elicit maximum information from potential clients when booking a valuation appointment can improve the firm’s win rate.
While information-based training such as the Technical Award is easy to deliver, training on sales techniques and management skills has to be linked to the individual firm’s culture and business strategy. What works for a high end estate agent may not work so well for a lettings agent dealing mainly with student accommodation.
Peter Knight says that before they think about hiring a training company, agencies need to decide specifically what they want from their training. “For instance, they might say ‘What is our instruction rate? What can we do to improve that?’ – then they need to focus the training on addressing that issue.” That’s one reason that 90 per cent of his firm’s training is on a bespoke basis, rather than off the shelf courses. Bespoke training can take into account the company’s culture, marketing, branding, and how its IT system works, the local market and competitors.
Delivering succeccess – the holistic approach
At a certain level, it can be difficult to differentiate training from management consulting; many questions are the same – how to improve the business, how to compete better. Knight says, “I don’t know where training starts and finishes to be honest, the edges are blurred.” But while consultancy will deliver a recommendation, training goes a lot further. “It’s about not just saying what to do, but coaching people how to do it.”
Adam Walker agrees, he offers both management consultancy and training and it is sometimes difficult to divide the two. “A client might come to me for a training course, but then they say ‘We can’t do this because our PC doesn’t let us do it’, or ‘We don’t have enough staff’, so training leads to consulting.”
Most of his training courses focus on highly specific areas, such as how to qualify buyers, rather than general sales or management skills, they concentrate on topics such as refining the business plan, or motivating staff, linking into their everyday objectives; “I start off by showing them how what they’re going to learn makes them money; it’s all day to day nitty gritty.”
Phil Bowden’s clients include corporates such as Savills and Countrywide, as well as some independent agents.
For him, it’s important that training is not seen as something that can be contracted out in the same way as office cleaning; it needs to be part of general management development. “One of the things we looked at when we were setting up the training programme at Countrywide was a belt and braces approach. While he says, “Countrywide don’t want me telling them how to run their business,” they want their training to reflect the company culture and strategy – so training providers need to be clear about exactly what that is before they put together the courses. Managers need to be realistic about how much training can deliver and rigorous about ensuring the skills learned are actually used. “The fact that negotiators don’t stand up when people come in is not down to a failure of training, it’s down to the manager not enforcing it.”
Training also needs to be supported by career development plans. Deliver the best training in the world to junior negotiators, but if they’re still junior negotiators in a few years’ time, it won’t work – they will have burned out or left. James Trimble says, “The idea is that the best people are the people you’ve trained and given a career path; negotiators trained up to managers, perhaps buying their own franchises.”
Phil Bowden says that it’s important that training outcomes are reflected in performance management; staff should be assessed by their managers on whether they are demonstrating the improved sales performance expected after attending a sales course. “It has to be a joined-up business. Training can’t just be a bolt-on. You have to follow it up in the real world.”
At Countrywide, managers who have been on a course are brought back three months later to give presentations on how the course has helped them. That is useful feedback for the trainer, but it also encourages staff to think through the benefits of what they have learned.
While training can be seen as a one-shot investment, incremental returns can be gained from following up training courses with ‘refreshment’ sessions, e-mail newsletters, and so on. Peter Knight works intensively with some agencies who get a phone call every week to discuss how they are applying training in practice and how performance could be further improved. Without the follow-up, the benefits can slowly leach away – as if you took your driving test and then never drove a car again.
While many firms still train tactically – sending staff on individual courses from time to time – the best results come from continuous, well-designed training programmes. Yet Adam says very few firms systematically train all new joiners, or have an ongoing training programme. That suggests they are not getting the maximum return from expenditure. “What’s important is to have a proper follow up process – monitoring, some rewards, prizes, support” – and that means training needs building into the overall business plan.
The idea that ‘training’ equals ‘training course’ is no longer relevant and has led to some different approaches. The Property Academy runs a number of groups which meet regularly to share best practice and identify opportunities. They generate to-do lists and action points, but ‘training’ is delivered by the members, not by an
Coaching and mentoring is another ‘new’ method. Coaching is well known in sports – a leading cyclist or gold player might have a number of different coaches – but less so in business, particularly in the UK. But it can deliver good returns. Phil Bowden says, “Learning anything new is always discouraging – you need someone to dust you down and pick you up when you fail.” Mentoring can help stop staff becoming discouraged when they’re not immediately able to apply new skills consistently or productively. While mentoring might not be the only training that staff need, it’s a part of the mix which can ensure that the maximum benefit is derived from training.
The Property Academy handles coaching for senior management at larger firms focusing on how business owners can run their businesses better; issues such as how to generate more instructions, or managing a new acquisition, or addressing widely varying staff or branch performance.
Education and qualification
The options for training have never been so diverse. RICS offers the gold standard qualification for chartered surveyors and there are a number of degree courses available in property related fields, such as the estate agency degree available from Glyndwr University, Sheffield Hallam (International Real Estate,
at MSc level) or Ulster (again at Masters level).
There are also a number of courses that address particular areas of the property market and ancillary fields, but are not addressed primarily to estate agents. The College of Estate Management offers BSc degree courses in building services, quantity surveying and estates management by distance learning, as well as a short course in valuation and investment (24 weeks) – perhaps over the top for the average negotiator, but worthwhile for agents who want to move into property management or commercial property.
BRE Training offers energy assessor accredited qualifications, but also runs courses on construction and the built environment – useful to those who seek a broader knowledge . Meanwhile, the IFS School of Finance may not sound like a regular port of call for estate agents – but in fact, since it offers courses leading to regulatory qualifications for mortgage advisers, it can help agents who want to secure additional revenue from financial services. (Adam Walker also offers a course specifically focused on maximising income from financial services, though this doesn’t deliver a regulatory qualification), 200 hours of study, using self-study materials, are required to achieve the Certificate in Mortgage Advice & Practice. John Durrant at Hello Photo offers photography courses customised for estate agents, focusing on how to make property photographs that win business and how to avoid common mistakes.
The price factor
Costs vary significantly depending on the type of training and the level at which it’s delivered. At the top, fees for senior level bespoke training can be large – The Academy charges from £2,000 to £7,500 a day – while some training firms cost only £400 a day for off-the-shelf programmes.
Budgets vary. Some corporates spend a large amount on their own in-house training; some spend nothing at all. But according to Phil Bowden, size is not an issue. “Some of my smaller clients spend £3,000 a year in total and they see it as an investment.” The important factor is that properly planned and costed training should generate a return.
A cheaper way is the purchase of self study training materials. The Technical Award materials are available at £130 for NFoPP members (£220 for non-members), while sitting exams in all four modules costs £110 (if they are all taken at once, which the vast majority do). The study materials can be supplemented by in-house training, which many corporates provide, or by NFoPP’s own revision courses. At degree level, the College of Estate Management’s £2,900 a year fees come in vastly lower than the £9,000 top tuition fee allowed for universities – not to mention that students will be working to support themselves during their studies.
The internet has had a huge impact on property training, with self study replacing the need to attend training courses for many qualifications. There’s even free video content available, though the quality varies; some American real estate trainers have free sample videos on Youtube, while the Property Academy has targeted video sessions on its site. Other organisations, such as the National Realtors Association in the US, have webinars and presentation handouts from conferences on their websites.
Online delivery is accessible and low cost. It’s also useful for delivering refresher training, since most videos come in ten minute bites – cost effective compared to sending staff for a half day’s training. And it is particularly good for delivering training that’s information based, such as compliance training. It’s not surprising that many of the leading training organisations are using online delivery as a major component.
Peter Knight suggests that online and DVD based content is particularly useful because it’s searchable, enabling users to access exactly the content they want when they want it. Instead of spending two days on a spreadsheet course, it’s possible to look up exactly the ten-minute segment on how to format tables or how to calculate yield percentages – far more effective.
The DIY route
Some agencies are still committed to running their own training. Winkworth trains franchisees and staff through the Winkworth Academy; 28 courses ranging from foundation skills to advanced sales training, as well as legal refreshers. James Trimble says, “We’ve tailored the courses over the years to how we want them and how we see things.”
Adam Walker says that while smaller independents don’t have the resources, this is a common route for larger firms; “the big corporates tend to do things in-house.” But simply doing training in-house doesn’t mean it’s better than what’s available elsewhere. He says some of the corporates’ programmes lack depth – “they give their staff the basics when they go in, but there’s not always much ongoing development.”
On the other hand Winkworth readily accepts that training has to be delivered continuously. James says “We want to get our people to be the best in the market – and that means not just getting them up to that level but also improving standards all the time.”
A common theme is that agents learn best from trainers who have actually worked as agents before going into the training field. James Trimble says, “People get inspired by people that have been there and done it. Being taught by a man standing at the front of the room with a slideshow who doesn’t really understand the intricacies of estate agency doesn’t cut the mustard.” Only an agent can deliver training that is in-depth enough to address specifics in a way that will really boost performance – and convince those attending the course that it’s worth paying attention.
Thriving through training
You might think that the current state of the housing market would discourage investment in training. Phil Bowden says that past vicissitudes have certainly had an impact; “A lot of training has gone out of the industry during the recession.” But it seems that right now, business is doing well. Peter Bolton King says NFoPP’s short course booking is doing particularly well. Numbers dropped significantly in 2009, but even though housing sales dropped again in 2012, the number of people attending NFoPP courses went up. 2011 has seen demand at the same level; NFoPP has already delivered 86 open courses to the end of June, as well as 13 in-house courses, and plans roughly the same level of provision for the rest of the year. Peter Knight also says business is thriving.
Adam Walker believes the industry divides down the middle when it comes to training budgets. “If you look at people like Romans, KFH, Knight Frank, who have come through the downturn unscathed, all of them spent a significant amount on training – and continued to spend on training through the downturn.” He believes that training is increasingly where the best firms differentiate themselves; “They are increasing the gap between themselves and the other firms at a cracking pace.”
Meanwhile, though, there is a significant underbelly of firms which are not spending on training, and are seeing below average productivity and profitability as a result. “It makes me sad,” he says, “that so many firms have gone bankrupt as the result of management making very basic mistakes.”
The cost of training is easy to assess; measuring its value is more difficult. Phil Bowden says when he was developing the Countrywide training scheme, he asked blue chip companies and accountancy groups how they valued their training, “No one could really come up with a payback.” But he believes the absence of hard financial data doesn’t mean training is not valuable. “If you had two estate agents, one where you had skilled and competent people and one where you didn’t, which do you think would earn more money?”
Other trainers take a more disciplined approach to measuring the benefits of training by measuring its output in terms of business improvement or changed behaviour. It’s the output, not the input in terms of cost, training hours, or numbers of people trained, that is important.
Peter Knight mentions one firm where lettings conversions went from the low 80s to 90 per cent after a targeted training course, and another where the instruction/valuation ratio improved from 45 to 65 per cent. “At £5,000 a pop, that’s a major return,” he says. However, he admits there is a self-select bias – managers who sign up for the kind of coaching that The Academy delivers are already likely to be the more innovative and more likely to implement the ideas they hear.
Adam Walker helps his clients achieve similar business benefits. He points out that he’s delivered training for a valuer who was winning £300,000 of business every year, with a 40 per cent strike rate. Increasing the win ratio to 41 per cent would give that valuer £307,500 of work – so the payback is £7,500 from a £150-200 investment in a one day course. “The return on investment on it is astonishing,” he says, “yet so few firms make that connection.”
Phil Bowden points out that whether or not you can demonstrate a financial payback, training is still worthwhile. No one seriously questions spending money on having an expensive car serviced, or maintaining their branch in tip top shape – in the same way, having spent money hiring staff, agencies should ensure their staff say in top performing shape. “People are assets that you develop,” he says, “and that means you spend a bit of money