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The use of pocket listing websites in real estate

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Pocket listings. The mere mention of them sets some real estate agents aflame, either defending or decrying their merit.

One side argues pocket listings are a blatant disservice to sellers, robbing them of full market exposure. Allegedly, pocket listings insulate a property from being subjected to outside forces, which cuts out healthy competition on the open market and can make a seller lose out on a potentially higher sales price. Some brokerages even have sellers agree to a delayed MLS posting, so that they can market the listing internally and procure their own buyers before it hits the public. They are perceived as nothing but a surreptitious tool to double end a deal & benefit no one but the agent.

The other side claims pocket listings were the method of choice in selling homes well before the concept of co-op’ing agents became mainstream. In fact, in many cities and foreign countries, pockets listings are how homes are still exclusively sold. If you have a buyer who wants to put an offer on a house that is listed by another agent. You are out of luck. That buyer must go through that listing agent to purchase that property.

The case for and against

Advocates of pocket listings also say this type of transaction protects the seller’s need for privacy. It’s true some people do not want others to know their house is on the market… This privacy argument doesn’t really hold water, unless you are a notorious celebrity. Even Candy Spelling, after trying to quietly unload her $150,000,000 56,500 square foot compound for years as a non-MLS listing, finally relented and listed it on the MLS this summer. (Although if you ask me, sellers who don’t want anyone to know their house is for sale probably isn’t very motivated to begin with.)

Whether these accusations leveled against pocket listings is true or not, I have in the past found myself slightly uneasy with the business practice of pocket listings and the agents who champion them. My main gripe is that it blunts the co-operative spirit of the agent community. When I hear the term pocket listing, I think “restricted access.”

A culture of transparency

I’m on the outside looking in….again. (flashback: a four-eyed flat chested nerd named Herman overhears the popular kids brag about their upcoming house party. They glance my way and say “No nerds allowed!”)

With the advent of technology, internet, and especially social media, the world is moving towards an open atmosphere where people expect the flow of information to be unfettered. This is function of a larger societal trend. The public increasingly expects, and will soon demand, a culture of transparency. Pocket listings strike me as secretive and anachronistic.

Furthermore, I just can’t help but feel the success of a pocket listing is limited by the listing agent‘s sphere. I mean, how many people can one agent possibly know? Compared to the thousands of eyeballs on the MLS? If I were a seller and an agent wanted to list my house as a pocket listing, my reaction would be “Just because you can bring me an offer from your own buyer, doesn’t mean that there aren’t even better offers out there for me.”

In the know

Now having said all that from the pulpit, I must disclose that I just got a tip from a real estate agent this weekend. Her client wants to discretely sell her property that my buyers have been coveting for years! (All over sudden, this outcast nerd is in the know, part of the in-crowd, invited into the inner circle! Oh joy!). Do I get off my high horse and arrange a showing for this non-MLS listing? Or do I succumb to my principles and let it slip through my fingers?

Hmmm, it‘s like junior high. When you’re not invited, you say those cool house parties are just for stuck up elitist snobs. But when they do throw you a bone and invite you, you ditch your geek friends in chess club and immediately beg your parents for a curfew extension. Yes, I suppose I have a love/hate relationship with pocket listings.

One case:

Oh while we are on the topic of pocketlistings, there has been some fanfare about a new website called pocketlistings.net launched earlier this year by a San Francisco agent and fairly successful blogger (thefrontsteps.com).

Dubbed as “The Off Market Real Estate Network,” some self-ascribed benefits to posting on pocketlistings.net include:

1. No Days on Market
2 . No Public price reductions
3. No publicized commission agreement
4. No definitive price, only price ranges
5. A place to “list” your home prior to MLS, or a place to list it if it is unsuccessful selling on MLS

I’m not sure what to make of this site yet. But is it me, or do these “benefits” resemble another little known San Francisco based website? Craigslist. (Goodness gracious, one dose of popularity and this nerd has become snarkier than the head cheerleader at the Sadie Hawkin‘s Dance!)

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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14 Comments

14 Comments

  1. James Malanowski

    September 20, 2010 at 3:52 pm

    I know this will piss off some folks, but the broker’s job is to sell the property, not to make sure another agent gets paid. The MLS is a tool and if you can do your job and get the property sold without that tool than more power to you. Most of my listings get sold because of the internet exposure I give them and the network of agents I prefer to deal with, not the MLS.

    Personally, I would much rather deal with agents that I know can get the job done with minimal hassle so therefore, my common practice is to premarket listings before they are officially “on the market” so I can stir up some interest and have some buyers in line beforehand.

    I don’t want to hear anything about ethics or fairness. I would challenge you to show me anything that makes that illegal or unethical. My job is to get the property sold and that’s what I do. Every time. Usually faster than my competition. I work for the seller, not a competing brokerage. My fees are mine unless I absolutely have to pay another broker to bring in a buyer.

    • Herman Chan

      September 21, 2010 at 12:42 am

      I agree it is our jobs to sell a clients property. However, getting it sold is just the starting point. the fudicary duty we owe is to get the highest and best offer for them….and that may not always be our own client. I’m just saying…

      But as vicki voiced below, if the seller is ok with that arrangement , then so be it. We’ve done our job.

      • Tony

        April 20, 2016 at 6:48 pm

        What?
        “….the fudicary duty we owe is to get the highest and best offer for them….and that may not always be our own client…”
        First: If the seller is NOT my client my “FIDUCIARY” duty to my client, in this case, is for the Buyer only.
        Second: Hence, my duty Is to get the property for my client, for the lowest price possible…

        In some cases the seller do not want to advertise the facts that their house is for sale for any of a million reason. My job , after telling them the cons and pros, is to protect that privacy and their desires.
        Tony

  2. Ruthmarie Hicks

    September 20, 2010 at 4:26 pm

    HOOOOO BOOOY!!!! Where does one begin…

    1. The Case Against:
    Unless the property is VERY unique or the agent VERY unique (I mean bordering on the ridiculous) nothing can really beat MLS exposure. I sell – because of my web presence – roughly 1 in 10 of my own listings… NOT scientific because I haven’t been an agent long enough to conclude that this is a trend. My marketing definitely does do the job in this case.

    BUT – there are 7000 agents in our area. I am among the more productive of these – but there is no way on earth that I can say that “I, Ruthmarie Garcia Hicks, have a bigger net than the other 6999 agents put together.” Anyone saying something like that is an idiot for even trying to justify it. I don’t care what you do – there is not a snowball’s chance in hell that this is the case.

    2. Transparency???

    We have more information – more “stuff” on the web now. But I don’t think this makes us transparent. The information has been twisted into “SPIN” and everyone’s got their angle. Look at lead aggregators and sites where you can buy your way onto a web page that makes it look as if you are the listing agent. Success in this world has more to do with your ability break out the plastic than your overall ability to sell real estate – or anything else for that matter. People are more confused then ever and their decisions are being guided more by hype than by facts. I do not call this transparency.

    3. In the Know:

    I don’t see the conflict for you. Seriously, I don’t – and true confessions here – I too was the nerd that was never looked on as “cool.” Heck – I even hold a doctorate – so the whole world KNOWS I’m a nerd. (If you can’t beat it – own it – but that’s another story)

    Point here is that your obligation is to your client. If you can secure the property that they want – then that’s what you should do. The Listing Agent is another story. But by representing your client you are doing your job.

    4. One Case:

    1. No Days on Market – and no real exposure to the full buying pool – in a declining market? Not a good idea.

    2 . No Public price reductions – but by stifling the buyer pool you have the probability of building in bigger reductions – private though they may be.

    3. No publicized commission agreement – So what? That could work for or against you when an agent shows up. If the buyer pays – they will expect the commission to worked into the pricing. I see no benefit here.

    4. No definitive price, only price ranges – It all comes down to what the market and the banks will let you sell it for. Putting up vague price ranges is smoke and mirrors.

    5. A place to “list” your home prior to MLS, or a place to list it if it is unsuccessful selling on MLS – and allow the price to decline further while playing games with the listing.

    The prosecution rests…..

    • Herman Chan

      September 21, 2010 at 12:49 am

      Very well argued! You got me convinced. NERDS UNITE!

  3. Vicki Lloyd

    September 20, 2010 at 5:45 pm

    I’ve seen pocket listings sell for more than expected, as well as less. Sometimes, the “I’m the first to know” buyer will over-pay because they don’t want to take a chance that another buyer will out bid them. I’ve also seen them “given away” because a seller just wanted to get it over with, and the listing agent knew that and took advantage by either selling it himself, or bringing in one of his friends.

    Limited marketing will always leave some doubt about the true value. If the seller is willing to live with the doubt, that is his choice, but he should be informed!

    • Herman Chan

      September 21, 2010 at 12:01 am

      very well put vicky! you are right, ultimately if the seller is ok with it, then so be it. but it is their choice.

  4. stephanie crawford

    September 20, 2010 at 7:01 pm

    In my market I’ve never seen anyone with a real pocket listing. Occasionally I’ll tell other agents that I have “a pocket listing in this or that neighborhood.” What I mean is that I have a hot listing that will hit the market as soon as the repairs, my photos, paperwork, are complete. I think this is what most agents mean by pocket listing now-a-days.

    What I do sometimes see is an agent who will enter one or zero photos in the MLS in an attempt to secure both sides of the deal.

    • Herman Chan

      September 21, 2010 at 12:39 am

      hi stephanie! u r right, the meaning of the term pocket listing has evolved.

      i think that this is a good time to point out that picket listings probably happen more than we realize. i mean that is part of the allure, it’s not publicized, so how would we know any different unless it was on our radar.

      for example in my market, when a deal closes a listing agent must post who the buyer agent is. increasingly, I’m seeing ppl marking the buyers agent as “non area member” or some other vague designation. Of course it can happen that an out of town agent writes on a house, but I became very suspicious one time. An REO house hit the market my clients loved! We wrote an all CASH over asking offer, short fast close, practically no contingencies. I never got a written response/confirmation the listing agent received the offer after several emails. and it was not until I tracked him down on a phone (via a # blocked) that he finally mumbled that he got it. Anyways, I saw on the MLS it went pending in a couple days w/ another offer. But the escrow period was almost 2 months and the it was marked “non area member” on MLS , so I knew something was fishy.

      After it closed, I saw the new owners in the driveway, and it turned out they were represented by the listing agent (that’s why he marked it as “non area member” on MLS so no one would know) and I also found out they were not all cash at all AND sales price was lower than our. I seriously doubt this listing agent even forwarded my offer to the bank. Ugh.

  5. BawldGuy

    September 21, 2010 at 3:00 pm

    Taking a so-called pocket listing, regardless of definition, is not a moral issue any more than double ending. It’s PC at its best, or more honestly put, worst. Same with transparency, with precious few exceptions. All false issues from where I stand. They’re used primarily as marketing ploys, and secondarily as weapons to control others.

    Sellers, again with hen’s teeth exceptions, know exactly what they’re doing when they insist on this approach. It almost always begins with, “Bring me a buyer and I’ll pay you X% commission.” Fair enough. I’m not your mother. I told you the pros/cons. You’re an adult.

    They’re no different than other sellers in that they want results. Sure, most times it’s better using a traditional approach — they may or may not believe this, regardless of what we advise. As long as they’re not woefully undervaluing the property, it’s their choice. I almost always tell clients they can opt for something less than ideal, and I’ll only refuse to execute it if it’ll cause them damage. If they still want to do it, I make it clear I’ll not be assisting them in its execution. That almost always causes them to pause and reflect.

    Bottom line? Most of this is a non-issue, and PC based.

    What I wanna know, is what do you guys think of the designated hitter rule? 🙂

  6. Homes In Pasadena

    October 6, 2010 at 9:18 am

    Excellent article! You can really make several points for both sides. I believe that it is our duty to negotiate the best deal for our sellers – sometimes that might not be the highest price.

    If I can sell a house by word of mouth great. However, casting the widest net possible will most likely bring the best options for my sellers.

    Part of my job is to make sure my clients understand the process and their options. Every client’s situation is different and what might be acceptable for one might not be for the other.

    Bottom line, if I look out for my client’s best interest, I’ll sleep well.

    Thanks for the food for thought – Steven

  7. Alex Clark

    April 11, 2011 at 10:29 pm

    Herman,

    Great article, and you make great points. I think it is fair to point out that since launching we are now in 34 States, have almost 1000 members, and have close to 500 posts. We’ve been live for 9 months, do not do any marketing at this point, and what you see is a very bare bones beta version. We’ve had TONS of feedback, and our next version is coming soon. If agents aren’t joining, they’re going to miss out on opportunities for their sellers and buyers (you failed to mention you can post “buyer needs” on our site).

    What I read in these comments and what I read and hear everywhere is the same, “Don’t pocket list, because you don’t get exposure for your clients”. That’s old school thinking. We’re not only going to change that argument, but we’re also going to change the way agents think about “listing”. Listings are not about agents, they’re about sellers and selling their homes at a highest and best price that is acceptable to them. That’s what we’re going to help you do.

    As far as transparency goes, our site is public. Anybody can browse it.

    If anyone has any questions, feel free to contact me directly aclark at pocketlistings dot net.

  8. Herman Chan

    April 12, 2011 at 12:49 am

    hi alex
    took ya about 6 months but thanks for joining our little conversation here! 🙂

    i think it would really help your site if you had some success stories. i mean 1000 members doesnt say much. it’s like 1000 who signed up for a facebook fanpage. ppl sign up for anything nowadays.

    as for transparency, there are not addresses. and to get more details you have to pay for info. isn’t that veering towards what an MLS board does already?

    looking forward to the new version of the site!

    H

    • Alex Clark

      April 13, 2011 at 11:05 am

      Herman,
      Been a bit busy keeping track of the articles. 😉

      You make good points and as agents share success stories, we will share them. https://blog.pocketlistings.net/2010/09/20/the-first-success-story-is-confirmed-in-san-francisco-on-pocketlistings-net/

      We put all marketing on hold until this next version is done.

      On transparency, we leave it up to the agent to share what they want to share. Our current version doesn't allow addresses to display, or contact info, or photos. All of which is changing. We took the feedback from our users, and will again leave it up to the agent to decide how much or little information they'd like to share, including contact info, photos,and webpages.

      The fact is, just like your article states, whether you love or hate pocket listings, they exist and are an integral part of our industry. I can bet that every single agent out there won't hesitate to do a deal if their client contacts them and says, "Hey, I found this house on PocketListings.net, I'd like to write an offer on it."

      We're just streamlining and consolidating something that already exists and will continue to exist and thrive in our industry.

      I'm looking forward to the new version too!

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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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