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Realtor matching ends – are agents just insecure posers?

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Last month, the Houston Association of Realtors was forced to ditch a map-based tool called “Realtor Match” that let consumers see which agents had sold what by ZIP code or neighborhood. Apparently, the realtors cried foul & torpedoed the tool. Why agents get so touchy about having their sales data public is beyond me.

I do have a theory though. Agents are posers. Well, not all of us, but one must admit there is disproportionate level of puffery in our business. Grab any business card and you will most likely see the agents name followed by some important sounding, albeit indefinable, title. And maybe the card will be peppered with equally vague acronyms of accreditations that frankly most people have never even heard of. Granted some realtors have indeed cultivated a niche market and have earned the right to brand themselves accordingly. However, there is just something disingenuous about inserting some abbreviations behind your name on a business card and all of a sudden you are a specialist. Wow, you pay for a weekend course about Luxury Homes, and voila, you’re luxury specialist! (Nevermind the fact that you never sold a house close to a million dollars…I mean, no one is going to ask. It‘s on your business card, so it has to be true, right?)

The same hype goes for agents’ websites & their social media. It’s almost absurd the lengths agents will go to in order to establish their cred. They drop buzz words like top producer, neighborhood expert, green specialist, local native. They post shaky flip-cam videos of their neighborhood attractions (what are we? Tour guides now?!). They regurgitate blog about some real estate article in their local paper. But what kills me is they do all this, without ever mentioning what homes they have sold.

Um, reality check: Realtors sell property. That is our job. Our sales history is probably our best asset to promote ourselves. Numbers don’t lie. One’s track record should speak for itself. If you have nothing to hide, you ought to be proud of your sales. Of the hundreds of websites I’ve perused, I can count on one hand the number of realtors who disclose their hard sales data. (and I am not talking about those agents who post “recent transactions” on their site with homes they sold half a decade ago!)

What happened to a culture of transparency? If you really are a top producer, prove it. If you really are the neighborhood specialist, show us your stats. It ain’t bragging if you can back it up. If you can‘t, then don’t brand yourself as such! Branding means squat (to clients or fellow agents) if you can’t justify it. Otherwise, it just comes off like a bunch of hot air. It’s like boasting on and on to a client about all the fabulous features of a house, but never ever mentioning the price. Your ill-fated attempt at marketing will just look like smoke and mirrors. As they say, too much window dressing is often just an attempt to hide a lackluster product.

But that’s the rub. My aforementioned theory is that most agents can’t back it up. Or rather, the public persona they are trying so hard to project really isn’t in line with who they really are or what they have really sold. I suspect agents who weave an overly glossy version of themselves and their careers are the ones who decried Realtor Match. (Can we say insecure?). I also suspect agents who are confident with themselves & their careers have no problem with having their sales data aired publicly.

How do you feel about having your sales data posted (like it or not, it will eventually happen)?  What are your theories why Realtor Match was buried shortly after its debut? Are we just posers?

Watch Real Estate Expert Herman Chan put the REAL back in REALTY. In his show Habitat for Hermanity, Herman skewers the real estate business and pokes fun at his fellow agents, all the while empowering buyers & sellers with behind-the-scene tips & secrets of the industry! Get a glimpse beyond the glitz & glam of real estate. It's a hot mess! Featured on HGTV, House Hunters & other media outlets, Herman is the undisputed Real Estate Maven whose helpful & hilarious commentary you just can't live without! In fact, his real estate TV show has just been optioned in Hollywood!

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43 Comments

43 Comments

  1. Erica Ramus

    August 10, 2010 at 2:16 pm

    Well that didn’t take long to torpedo. Folded under the pressure, eh?

    I agree. It is a culture where $98/mo can buy you any cred you want! Check out zillow and their neighborhood expert badge. It’s a paid ad. Anyone can be a branded expert if you cough up the cash.

    • hermanchan.com

      August 10, 2010 at 9:00 pm

      erica, oh my! i haven’t heard of the zillow badge until you mentioned it. wow, so is this where the industry is headed? “pay to play”, not unlike politicians who buy their way into office. hmmm

      this doesn’t sit well with me, but it does seem nowadays “perception is reality” (the new PR). as long as you can make someone believe you are an expert, then you are…truth be damned.

  2. Will

    August 10, 2010 at 3:13 pm

    The problem with such a system is that it torpedoes any “new” agent. It clearly favours the established agent who has spent years building up their territory/team/business. And as we all know, being the most “productive” does not necessarily mean being the best provider. It is a digital version of having the most signs in the neighbourhood. I’d wager that the vast majority of agents visiting agentgenius are the younger, hungrier, proactive, and growing types.

    Such a system sows seeds of doubt in a prospective client from choosing someone who may be a very good fit for them while pointing them towards the establishment. As we all know, the 80/20 (or 90/10) rule says that 80% of the business is done by 20% of the agents. Well, I suspect that the other 80% of the agents didn’t like another advantage being given to the successful 20% and shot it down. And I’d wager that the 20% voted to keep it as it further entrenched their “value”.

    It’s not about posing (despite how hard the industry appears to make it so with their mismanagement). It’s about an unfair system that negated the value of an agent trying to grow their business in the face of an estabilshed colleague.

    If they really want to statistically demonstrate an agent’s value they should do what Redfin does with their agent feedbacks from actual clients. Now that is a site and a metric worth exploring.

    • hermanchan.com

      August 10, 2010 at 8:36 pm

      will , you bring up a great point about feedback from clients. some prospects really do care about testimonials. realtors w/ yelp.com pages leverage that kind of direct public feedback to bolster their reputation too.

      speaking of testimonials on agent’s websites, don’t you find it puzzling when you see an self-described top producing veteran ……with only like 2 testimonials! if i were a client, i would think “what is wrong w/ that picture?”

  3. BawldGuy

    August 10, 2010 at 4:19 pm

    Gimme a break.

  4. Dan Connolly

    August 10, 2010 at 4:54 pm

    I get kind of exasperated with posts like this that make sweeping disparaging statements about Realtors. Painting a picture about Realtors who make stuff up just reinforces a negative stereotype that, in my opinion, is talked about by Realtors way more than by consumers.

    I think it is entirely possible that someone could be fairly new to the business and spend a lot of time studying the active listings and the sales in a neighborhood who could become a neighborhood expert without selling a single house. The could be able to recite from memory the days on market, square footage and sales price of all of the last hundred sales and bring some knowledge and expertise to the table that would allow him to legitimately advertise as a neighborhood expert. They could have taken an appraisal course, a staging course and have enough sense to hire professional photographers. They could have enough common sense to write professional ad copy and enough internet expertise to get it online.

    Raw numbers of how many sales you have doesn’t tell the consumer about ethics, common sense and ability to actually return a phone call in a timely manner that will make the difference in a transaction.

    I don’t think that you really want to promote a system that puts Realtors who have been around for a long time (like me for 24 years) at the top of the suggested list just because they can point to a lot of closed transactions. It should be about individual performance in the present tense. Lots of young hungry agents do a much better job for the client than the old farts who are ready to retire and spend all of their free time at the lake.

    • hermanchan.com

      August 10, 2010 at 10:29 pm

      hey dan!

      don’t get exasperated! a healthy discussion is always a good thing

      “Painting a picture about Realtors who make stuff up just reinforces a negative stereotype that, in my opinion, is talked about by Realtors way more than by consumers.”
      well, i think that is partially my point, consumers don’t talk about it b/c they aren’t made aware of it.

      “I think it is entirely possible that someone could be fairly new to the business and spend a lot of time studying the active listings and the sales in a neighborhood who could become a neighborhood expert without selling a single house. ”
      i wholeheartedly agree. the system has always been slanted to top producers, who have more money, more farms, more contacts, than newbies….but every year, newbies enter the business, and some to great success. remember, even top producers at one point were newbies. everyone starts somewhere. the playing field has never been level, but that is no excuse for someone not to try to join our terrific industry.

      “Raw numbers of how many sales you have doesn’t tell the consumer about ethics, common sense and ability to actually return a phone call in a timely manner that will make the difference in a transaction. ”
      very true dan. but all things equal, wouldn’t it serve the client best if they knew an agent’s track record? ….at the very least in the spirit of transparency. also, ethics, common sense and response time are not mutually exclusive to a great sales record.

      at the end of the day, you are right, it is about the individual. if you are a great agent (new or seasoned), success will find you, regardless of realtor matching or not

  5. teralmc

    August 10, 2010 at 5:02 pm

    I have to agree with Will in that this type of advertisng is not fair to the newer agents who have staying power but haven’t racked up the sales yet. I also believe that there’s a lot of bashing among agents right now primarily because there is not enough selling going on for everyone to stay happy.

    • hermanchan.com

      August 10, 2010 at 10:32 pm

      there will always be a new way of advertising, so realtor matching is just a convenient excuse for some ppl’s lack of success. and you make an excellent point about bashing! there is quite a bit of “hateration”. nothing like a downturn to bring out the worst in ppl. Thank goodness we are all positive

  6. Elaine Reese

    August 10, 2010 at 5:23 pm

    First let me say I agree with Dan regarding trashing the industry. Sales volume can mean nothing as to an agent’s performance. It can also mean nothing as to the income they put in their wallet. Plus, there is the volume of a team of 8-10 agents being compared to a single agent. An agent in a luxury market can sell two homes and have higher volume than one that sells 10 to lower-income buyers. Does that make the luxury agent better?

    My main beef to your proposal is that few other industries publish their sales volume. Have you ever seen an CPA advertise how many tax returns they did? Our volume is like our salary. How many people discuss their salary to the general public? It’s a private matter.

    • hermanchan.com

      August 10, 2010 at 10:17 pm

      hi elaine,
      interesting note about the salary. i hadn’t thought about that angle. would you feel any different if only the addresses were disclosed (and not sales price)?

      either way , i have no qualms about what I earn so i am indifferent. although it might actually help ppl to know what agents make…some ppl have this notion that we are swimming in dough. knowing what agents really take home would really curtail clients demanding rebates and the like.

  7. Bruce Lemieux

    August 10, 2010 at 6:50 pm

    From the consumer’s perspective, it seems to me that providing sales stats would only be a good thing. Right now, it’s impossible for a consumer to find any data to backup an agent’s supposed achievement as a ‘top producer’, ‘top 1% in sales’, etc.

    Publishing these stats wouldn’t necessarily lock-in the high-volume agents. Many of these are actually large teams managed under a single rainmaker. New, on-the-ball agents can develop their expertise, emphasize their association with a good brokerage, and emphasize their exceptional, one-on-one service. As they do more business, their hard work would be rewarded by having more sales.

    The big benefit would be to shine a bright light on the ocean of mediocre agents who don’t do much business and don’t work very hard. These guys would have a lot to lose — and rightly so.

  8. Broker Bryant

    August 10, 2010 at 7:30 pm

    Well I like the system. But I can see where it would pose problems. Not only would it harm newer agents but also agents that work on teams where another team members gets all of the credit.

    I’ve been giving potential sellers a list of my solds for many years now. It is a very strong listing technique. Sellers want results. It’s hard for them not to hire you if you just sold 10 houses in their neighbor hood.

  9. Matt Carter

    August 10, 2010 at 8:09 pm

    For the record, HAR pulled the plug on the Realtor Match capabilities that agents were objecting to back in April — just days after the tool was launched (and not in July, as stated above).

    When using HAR.com’s “Find a Realtor” seach tool, consumers can no longer see the number of transactions and listings agents have in a particular ZIP code or neighborhood. Agents can still choose to make MLS data showing their past transactions available on their profile page.

    BTW, you can still take Realtor Match for a test drive and see its full capabilities at a URL that HAR hasn’t publicized: search.har.com/realtormatch/

    • hermanchan.com

      August 10, 2010 at 8:25 pm

      thanks for the correctifying the timeline as well as the shadow URL, matt!

  10. Byron

    August 10, 2010 at 9:40 pm

    Great article! I’m enjoying all the comments and different point of views.

  11. Matt Burrus

    August 10, 2010 at 10:09 pm

    As the chief communications officer for HAR, I have very much enjoyed reading all of the comments about the REALTOR Match program, which was developed by HAR through funding from NAR’s Game Changer Awards. As background, the program was vetted through HAR’s Technology Advisory Group and Board of Directors (both 100% member bodies) during a six-month period of research and development.

    One problem with the launch itself is also evident in the comments here–a lack of complete information. The REALTOR Match system was not purely based on MLS sales data. It also incorporated HAR’s Client Experience Rating, which was launched more than one year ago and has since sent out about 50,000 surveys to previous clients, with a 49% response rate. (Someone above said they thought client feedback/ratings should be used–so you can see we agree.) This means that REALTOR Match took into account both quantitative (sales data) and qualitative (rating) aspects of the prior transactions.

    As for the system favoring established, experienced agents, the list of results from the criteria selected by the consumer listed the agent with the most recent sale or listing at the top, with the remainder of the list in reverse chronological order. It was not in order of the most transactions or listings. Granted, an agent would have to have a transaction or listing to be included in the search results, but I very much think there are plenty of other sources for clients aside from this one tool. Referrals from friends, neighbors and co-workers or prior experience with the REALTOR are consistently the number one and two responses in our annual consumer surveys, and they will continue to be the dominant ways people find their REALTOR. I have used my personal REALTOR prior to even joining the staff at HAR. He happens to be one of the top 10 REALTORS in Houston, but even if he wasn’t I would still ask him to help me sell my house or buy a new one because I’ve known him for years and trust him.

    Additionally, with REALTOR Match consumers could select whether they were in the market to buy or sell. This was one of the few times when buyer’s agents were highlighted, as the listing agent usually receives all the exposure. During its brief existence, we had consumers who used the search and specifically didn’t want a REALTOR who had 50 listings because they said they wanted someone with two or three so they would receive more personalized attention. Still others said this program was merely part of their overall search process and would be one factor in their decision about who to choose. Clearly, not everyone wanted the agent who had the most listings or most sales. Others also said they actually wanted someone who wasn’t as experienced (read younger) because they thought they would know more about technology and social media as marketing tools. Everyone seemed to have different ways to view the same list of results. Not all consumers are the same, nor do they act in the same way.

    If any of you attended the Inman News Real Estate Connect conference in San Francisco last month, there were several companies that have services just like this one in the works. The question becomes whether REALTORS want consumers going to third parties to search for a REALTOR or would prefer their own association, with pro-REALTOR messaging and pro-REALTOR policies and guidelines to administer it. For the moment, the answer seems clear. When others launch their own programs, we’ll see if the answer doesn’t get a bit hazier.

    Matt Burrus
    Chief Communications Officer
    Houston Association of REALTORS

    • Bruce Lemieux

      August 11, 2010 at 12:41 pm

      I have to say, I’m very impressed that HAR took this on. Adding transparency would ultimately only improve our profession. Knowledgeable, ethical and *professional* agents should not fear something like this. And, if any organization should do this, it’s the local professional Realtor board — not someone else.

      We shouldn’t avoid giving consumers more real information about our performance just because professional organizations representing doctors, etc don’t attempt to do the same. Imagine working in a profession that’s respected for placing the needs of the consumers ahead of everything else.

      I hope that HAR will persevere with this program and ultimately provide a working model for the rest of us.

    • hermanchan.com

      August 11, 2010 at 5:31 pm

      hey chief

      wow, thank you for such a well written post! very informative. Hopefully, agents who read this will finally understand this is not to be feared. embrace the change….b/c like you said, it is going to happen. it can originate from the realtor community or outside source. whether agents admit it or not, the public are starved for this info, especially in this info-hungry internet culture. and some company is going to fulfill this need, so why not let it be us.

  12. Fred Griffin

    August 11, 2010 at 12:37 am

    Herman, you are no stranger to controversy!

    First, about those designations… They make an impression on fellow Real Estate Agents, but John Q. Public is thinking “What is this?”.

    Designations that require actual sales or experience, okay… but the ones that can be obtained by shelling out $345 and sitting through a class for a week or two – so what?

    I know of one designation (tact will not allow me to name it) which implies that Agents are Technology Experts… but get serious! A one week course that implies years of expertise? Uh-uh.

    As far as Solds, etc. – I use personal Testimonials – not purported quotes on my website from “J. Smith, Anytown, USA”, but telephone numbers of satisfied Buyers or Sellers given to new prospective leads. All the letters in the Alphabet cannot top a live recommendation from a happy client.

    • hermanchan.com

      August 11, 2010 at 4:33 am

      “Herman, you are no stranger to controversy! ”

      well, i will take that as a compliment. in fact just last wk someone called me the Kathy Griffin of Real Estate. LOL!

  13. Matt Thomson

    August 11, 2010 at 12:42 am

    Curious as to where Realtor Match’s data came from. In our MLS (NWMLS serving greater Seattle) the selling agent wasn’t even a tracked statistic until June of ’09. Even now, only about 65% of the listing agents enter the selling agent info (the rest just enter the selling office). The listing agent is the only one who can input that.
    I’ve closed $6.2M this year. If you search me on the MLS, though, I’ve only closed $4.8M. I don’t have a problem with my stats being published, but I DO have a problem with inaccurate stats being published about me.

    • hermanchan.com

      August 11, 2010 at 4:31 am

      matt, that is a valid question. i suppose the success of a tool like realtor match really is dependent upon how the data is culled by MLS….

  14. J Philip Faranda

    August 11, 2010 at 3:49 am

    The full Monty is unthinkable to many licensees, and with good reason. The accolades they still trade on from the Reagan administration are past their expiration date. They might be exposed as not being a primary bread winner who is in fact subsidized by their spouse. They might not get as much mileage from tethering themselves to a large office with big producers.

    I’m all for transparency in the results. If I am getting my gall bladder removed, I want to know that the surgeon has done this many times.

    It amazes me that we have the largest trade organization in the USA, yet we still haven’t been able to get the public to ask the question “How many homes like mine have you personally sold in the past 12 months?” What is so unreasonable about that?

  15. Matt Thomson

    August 11, 2010 at 10:17 am

    Another thread I’m surprised hasn’t been brought up. This is in no way unique to our industry. Ford, Chevy, Toyota, and Kia all claim to be America’s #1 selling car company. Crest, Colgate, and Aim all claim to be preferred by more dentists. 6 of 11 HVAC companies in our yellow pages claim to be Gig Harbor’s #1 choice. Countless businesses claim to be the best in the West.
    Claiming to be #1, a top producer, or a specialist isn’t unique to Realtors. It’s up to the consumer to do their research and make the agents prove it.

  16. Anthony Rueda

    August 11, 2010 at 3:22 pm

    Like some of the comments stated above, I do believe this kind of data puts a newer agent at a disadvantage and gives experienced agents more of an advantage. I think the general public would like access to realtor statistics, but I think ultimate control of making an individual’s sales statistics public information should be with the individual, not the association.

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Opinion Editorials

Learning in the workplace: An exploratory mindset can foster efficiency

(OPINION) A typical business model is to run a tight ship with fear of inefficiencies, but cultivating learning can bring the best out of organizations

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Left side of brain showing calculations and right side of brain with colorful paint, resembling creativity and learning.

Despite living in an ever-changing world, many people assume that learning, be it academic or vocational, more or less stops with the conclusion of formal education. Harvard Business Review’s John Hagel III posits that an exploratory mindset, rather than fear, is the most effective way to cultivate an ongoing interest in learning – something that, as Hagel reveals, is more beneficial to a modern world than business owners realize.

Inefficiency is perhaps the most common fear of any business owner, and for good reason- Efficiency is tied directly to profits. Because of this, the majority of industries focus on establishing protocols, training employees rigorously, and then holding them to their prescribed models of operation.

And while those models can be extremely restrictive, the fear of inefficiency prevents employers from fostering creativity and personal learning, prompting some to go so far as to penalize employees who color outside of the lines. Indeed, Hagel describes one such interaction affecting an acquaintance of his: “As someone who was excited about improving the company’s supply network, she created and began testing a new intake form to assess supplier reliability.”

“She was fired for not using the standard procurement forms,” he adds.

But Hagel’s acquaintance wasn’t acting maliciously, at least by his description; she had simply identified a bottleneck and attempted to fix it using her own expertise.

We’ve written before about the importance of trusting one’s employees, implementing flexible procedures, and even welcoming constructive criticism in the interest of maintaining efficiency in a growing market. This is exactly the point that Hagel drives home – that holding employees to standards that are optimized for maximum efficiency discourages flexibility, thus culminating in eventual inefficiency.

“In a rapidly changing world with growing uncertainty, front-line workers find themselves consuming much more time and effort because they have to deviate from the tightly specified processes, so scalable efficiency is becoming increasingly inefficient,” says Hagel.

The irony of rigidly efficient practices inspiring inefficiency is clear, but the process of moving away from those structures is fraught with missteps and a general lack of understanding regarding what truly motivates employees to seek education on their own.

Let’s be clear: No one is advocating for a Montessori approach to work, one in which employees spend more time licking the walls and asking questions about the sky than they do attending to the tasks at hand. But employees who have been encouraged to explore alternative solutions and procedures, especially if they are supported through both their successes and failures, tend to be more ready to “scale” to increasingly changing demands in the work environment.

Ultimately, those employees and their expertise will create a more efficient system than all of the best-thought-out procedures and guidelines one can muster.

“Cultivating the passion of the explorer enables innovative thinking in the organization at a whole new level,” Hagel summarizes. “But harnessing that opportunity requires us to move beyond fear and to find and cultivate the passion of the explorer that lies waiting to be discovered in all of us.”

It is both Hagel’s and our own hope that businesses will find ways to appeal to that same exploratory passion – if not because it is in the best interests of employees, then, at least, in the name of improved efficiency.

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Opinion Editorials

Art meets business: Entrepreneurship tips for creative people

(EDITORIAL) Making your creative hobby into a business is an uphill battle, but hey, many other people have done it. This is how they crested that hill.

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creative artist doodle

If the success of platforms like Etsy has proven anything, it’s that creative people can launch successful businesses, even with relatively few tools at their disposal – and for many hobbyists, this is the dream. That doesn’t mean it’s easy, though, and what pushes someone from creator to businessperson can be hard to pin down. In one study, the determining factor was encouragement by family and friends. Others make a slower transition from hobby to side hustle to full-time employment in the arts. Whatever the motivating factors, though, artists interested in becoming entrepreneurs need to hone an additional set of skills.

It’s All In The Plan

From one perspective, artists know how to follow a plan. Whether we’re talking about a knitter who can work through a pattern or a novelist outlining a chapter and building characters, creative thinkers also tend to be very methodical. Just because someone can create or follow a plan, that doesn’t mean they know how to develop a business plan. Luckily, there are plenty of guides to starting a business out there that contain all the basic information you’ll need to get started.

Business development guides are full of valuable technical information – what paperwork you’ll need to file, the cost of licenses, and other similar details – but they can also help you answer questions about your goals. Before you can even start writing a business plan, you’ll need to consider what service or product you want to offer, who your clients will be, and what differentiates your product from others out there. This last question is more important than ever before as more people try to break into creative fields.

Assess Your System

Once you know what your business goals are and what products you’ll be offering, you need to consider whether you have the ability to scale up that operation to fulfill market demand. There aren’t very many art forms that you can pay the bills with fulfilling commissions one at a time. The ability to scale up the artistic process is what made the famous painter Thomas Kinkade so successful during his lifetime when many others have failed. For the modern artist, this might mean asking whether you can mechanize or outsource any of your activities, or if you’ll be doing only exclusive work for high-paying clients.

Find The Right Supports

Every business needs support to thrive, whether in the form of a startup accelerator, a bank loan, a community of fellow professionals, or some other organization or resource. Artists are no different. If you’re going to develop a successful creative business, you need to research and connect with supports for working artists. They may be able to help you access tools or studio space, get loans, market your business, or connect you with a receptive audience. These groups are expert repositories of information and you don’t have to be in a major city to connect with them.

Find Professional Partners

You’re a talented artist. You have a vision and a plan. That doesn’t mean you have to go it alone – or even that you should. To build a successful creative business, you’ll want to partner with people who have different strengths. Not only will these people be able to lend their expertise to your operation, but they’ll make you a better artist and entrepreneur by lending a critical eye to your approach. Just like a major corporation won’t thrive if it’s composed of yes-men who are just along for the ride, your creative undertaking needs internal critics whose ultimate aim is to support you.

Stay Inspired

It’s easy to get bogged down in business logistics and lose your creative spark. In fact, that’s why many artists are reticent to monetize their work, but you shouldn’t let that fear hold you back. Instead, put in the effort to stay inspired. Read books about art and creativity, keep a journal, or go to museums. Experiment with new forms. Be willing to push your own limits and know that it’s okay to fail. Many businesses that aren’t tied to creative output flounder and struggle to find their way, and there’s no reason your business should be any different. Still, the surest path to failure is stagnation and losing your spark. That’s worse for any artist than a sloppy business plan.

Artists are often told that they aren’t meant to be entrepreneurs – but the most successful businesspeople are creative types, even if they aren’t typical artists. Use that outside-the-box thinking to your advantage and make a splash. If you want to do more with your art, you owe it to yourself to try.

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Opinion Editorials

Why tech talent is in the process of abandoning Austin

(AUSTIN TECH) There is no single reason Austin tech talent is packing their bags, but a handful of factors have collided to create a tenuous situation.

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austin tech talent leaving

“Nothing’s keeping me here” is a phrase we keep hearing around town. Being in the center of the tech space, we’ve been able to keep my finger on the pulse, and what we thought was primarily housing that is driving folks out of town turns out to be far more insurmountable than we could have ever imagined.

A perfect storm is brewing as the housing market collides with a dramatically transformed workforce that has become accustomed to working remotely and shifted priorities.

Last time Austin was bleeding talent, the year was 2011 and most investments were focused on early stage startups and there weren’t enough open roles that were senior level, so we started losing people to competitive markets. In response, we built a massive employment hub (the Austin Digital Jobs Group (ADJ)) and volunteered hundreds of hours to help make Austin a magnet for high quality employers.

This time around, we expressed to the Group of over 55K members that we were frustrated that people were confiding in us that they were leaving (or considering it). Some are even people that we all imagined to be part of the very fabric of Austin tech. We feel helpless this time.

Many of these talented people said that the soaring housing prices in Austin had them eyeballing smaller towns in Texas, or worse, their hometowns outside of the state. There are only so many times you can try to buy a house, get rejected, or get outbid on 22 homes before you start looking at other places. Only so many people will accept a billion percent rent increase at renewal time before thinking that going back home to Louisiana’s lookin’ pretty good.

This week, Austin CultureMap reported that Austin now ranks number two among the most overvalued home markets in America.

Tesla is getting ready to open their Gigafactory, Oracle is moving their headquarters to Austin, and Samsung is currently trying to get buy-in from city officials in Taylor so they can build their mega plant near Austin. Home investors and firms from all over are salivating.

It all feels both exciting, yet overwhelming when you’re going to buy a house here, only to get outbid by $150K over asking price from an investor in California. It’s been demoralizing for so many.

Because we also own a massive real estate publication, we’re firmly in touch with that sector, and brokers in Austin are telling us that the summer was out of control and overheated, but they’re already seeing that hyper-activity slow a bit.

Housing alone isn’t enough of a reason for an entire sector to be packing up or dreaming of leaving. So what gives?

At last count, a thread in ADJ on this topic is at 806 comments, and I personally received several hundred more via direct message with people in tech explaining why they’re leaving or considering leaving.

There are challenges within the city limits of Austin that have bubbled over like crime and separately, the contentious issue of houselessness – it’s an ongoing and very serious issue that has people leaving downtown, but not necessarily leaving the surrounding areas.

So if housing isn’t the exclusive driving force, how has that problem combined with the employment market shifts? How has the job market changed in such a way that talent is ready to hit the eject button on this town? It boils down to a changing talent pool, fractures in the hiring process, a shift in priorities, and a lingering brokenness in the entire process that is exacerbating all other conditions.

Let’s dig into that further.

Because of the global pandemic, remote work has become a staple in the tech industry, teams adjusted and realized the office is more of a luxury than a requirement, and many large brands swear that they’ll never require their employees to come into the office again.

For that reason, tech workers’ expectations have been forever changed. Fully remote options will drive the market for years to come, and hybrid options or flex work hours will also be how large tech firms attract and retain talent – ping pong tables and chill vibes will be less of an appealing sales pitch.

The pandemic has also shifted the talent pool to include everyone in America – if all workers are remote, employers no longer have to look just to the local workforce. This talent pool expansion is a double-edged sword – if an Austin tech company can look to Nebraska for workers, then remote workers can look outside of Austin to other budding tech hubs, potentially shifting the entire environment. That’s the main driver for Austin brands continuing to hire in Austin, lest the entire ecosystem fail.

All that said, a disconnect in the job market in Austin tech remains. Holdouts from attitudes and old systems of the past linger on.

A theme we continue to hear from high quality candidates is that employers have increasingly unrealistic expectations. You already know the stereotype of job listings that say they’re entry level but require a decade of work experience. But as budgets tightened in the face of uncertainty, Austin tech companies are becoming phenomenally great at hiring someone to do three jobs that pay less than one. One of our Group members asserted that employers are looking for turnkey employees. It used to be that employer job descriptions were a realistic wish list and that if you hit over 60% of them, you might get an interview. Now people believe that the requirements are becoming unrealistic and if you meet less than 100% of them, there is zero chance of an interview. Many have complained that hiring managers and recruiters continue to not be aligned, slowing the process repeatedly.

The timing of the acceleration of unrealistic expectations has locals feeling like the pandemic created conditions that allowed for employers to take advantage of job seekers who must be desperate since the world is upside down. I don’t personally believe this has anything to do with the pandemic, rather it is a continuation of an ongoing trend.

If you think this is an exaggeration, just this week a job seeker let me know that a recruiter sent them a job description that required the “ability to code in any language.” WTF. The recruiter was serious. Try telling me this isn’t out of control and I will laugh right in your face, friend.

Another serious point of contention in Austin is that salary levels are not increasing anywhere near the skyrocketing living expenses.

Many believe the salary levels are a decade old and simply can’t keep up with the market conditions in Austin and while we’ll leave the “you are a remote worker, you shouldn’t earn as much since you moved to a less expensive locale” debate to another day, we will firmly assert that this problem will hold back the tech innovation and the overall economy in Austin.

In that massive thread in our Group, one member asked, “So I guess a question is: do we accept the idea that Austin is now only for those making 6 figures??”

What is so disheartening about the salary conditions is that changing this couldn’t possibly be done overnight – it requires time and structural changes, and the bigger a company is, the slower it is to turn the proverbial ship.

Meanwhile, numerous people retired early during the pandemic, or began freelancing or consulting full time. Many of these people aren’t likely to return to the workforce under current conditions, and they feel like they have less roots in Austin – they can live anywhere now. See how remote work has caused a ripple effect?

Do you remember when some tech executives in Austin reluctantly sent employees home as the pandemic hit, flippantly warning that it wouldn’t be a coronacation!? Bad behaviors like this and other employee treatment during the pandemic haven’t and will not be forgotten – the memories will remain as fresh as the time you got shoved by that bully in elementary school. You may have forgiven, but you’ll never forget. Trust has been broken.

Trust was also broken during the pandemic when people lost what they believed to be stable jobs. It has created a certain trepidation in the marketplace.

The pandemic has forever altered all of our lives as individuals. Thousands died from COVID-19, and those of us left behind lost loved ones. We were all sent home with no job security. Many of us became homeschool teachers and somehow also had to keep up with our careers. We were forced to share spaces with our partners, our children, our parents, our family.

Some would think all of this is a recipe for resentment, but in the majority of cases, what has happened is a serious shift in priorities to favor the family, to appreciate quality time, to find solace in more quiet time and a less full calendar.

People tell us they don’t intend on going out for drinks after work when they’re called back into the office – it turns out we actually like our kids or partners now that we’ve gotten to know them, or that we value our newfound connection to old hobbies. The priorities aren’t fleeting – this pandemic has changed us.

Because of this fundamental change in who we are, ongoing problems in the employment market are now magnified.

“Isms” still plague the hiring process. Ageism continues to be a very serious problem in Austin tech, for example. People tell us that they’re still experiencing sexism, racism, ableism, and every other sort of discrimination. In 2021. It’s unbelievable. You can say all of that is simply perception, but in this scenario, perception truly is reality. And because our priorities have shifted, our giveashitters are pretty low when it comes to tolerating bad actors.

That same shift has also lowered tolerance levels for burnout. One member in the Group pointed out that after the market crash in 2008, resource levels were depleted – and here we are in 2021, they haven’t been restored. People were burned out before the pandemic, and now they’re moving to the country to work remotely and begin healing this burnout that is coming to a head.

It’s difficult to deal with ghosting (be it computer-aided or overworked recruiters) when you’re already burned out and thinking you’re the only one. It’s giving this sector a terrible reputation that is spreading.

Resources aren’t the only factor here that is stuck in 2008. Companies were so used to getting a flood of applications for every single job listing, their ATS (applicant tracking system) filters were implemented accordingly. The volume of applications has dropped, yet the filters remain overly restrictive. They put their ATS on auto-pilot once upon a time, and it remains that way, yet they continue to reach out to us in confusion, asking us where all the applicants are.

In the eyes of tech talent, the hiring process has deteriorated. Simultaneously, in the eyes of companies hiring, the process has been improved. Enhanced.

The disconnect here is not in the unrealistic expectations previously outlined, or the rising opacity in salaries, but in the actual mechanics of the hiring process. Even smaller companies have added additional rounds of interviews and ridiculous red tape in what is an effort in vain to compete with the Googles of the world. There’s a lot of what I would call “playing office” going on, with non-technical hiring managers hiring for technical roles, or unrelated staff being roped into panel interviews to weigh in on whether or not someone is a “culture fit.”

The process has become lengthy and demanding with endless personality tests, whiteboard tests, Zoom calls, questionnaires, more phone and video calls, aptitude tests, and so forth. Most people have come to accept these as hoops to jump through, but the practice of having job seekers do extensive unpaid projects as part of their job application is creating deep resentment and a growing resistance. No one expects to shake a hand and get a job today, but doing a 12 hour assignment that is due in 24 hours is unreasonable, especially unpaid and with no promise of their intellectual property being protected.

It started off as a way to aide candidates into demonstrating their true skills and it was simple. But over time, the practice has “evolved.” It feels to some like every Austin tech recruiter and hiring manager went to some evil underground conference a few years ago and were brainwashed into thinking that if they ALL assign abusive tasks, no one in the sector will notice because they’ll just accept that it’s “how things are done now.” But that’s not happening and the overly complicated process combined with other market factors is driving seriously qualified tech talent out of Austin.

The hiring process has continued to degrade and for no good reason. We actually built ADJ in a way that would directly connect hiring manager and job seeker, promoting the concept of simplifying the hiring process. Yet here we are.

The final nail in the coffin is that candidates and employers are blaming each other for a power imbalance, and thinking that their situation is unique. A feeling of isolation is growing due to peoples’ inability to openly discuss this process – both hiring folks and job seekers.

The bottom line is that numerous market conditions have converged to create a scenario where people are tired and simply won’t settle anymore. Expectations have changed. And we have changed as people.

We will inevitably get hate mail because of this editorial and folks will say that the very publication of this piece will push people out of town, but we would argue that if no one makes an effort to diagnose the growing illness, it will metastasize.

This editorial was first published here on September 09, 2021.

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