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Future Proof – Top Up Your Tank!

Kevin Magee, CEO of Raine & Horne SA, has been a strong advocate of using training and development to ensure that his team of offices continues to advance on the real estate “front line”. In the last two years, most of the program’s offices and trainees have been assisted through government funding. Here is how they did it.

During a battle in WWII the German forces had a moment when they seemed invincible as a result of the deployment of their formidable new Tiger Tank.The Tiger set a new standard for warfare at the time, it was the first German tank to mount their devastating 88mm canon, and had armour that was virtually impenetrable to the tanks and guns of opposing forces.In isolation one Tiger would cut like a knife through a section of the Allied line, but when combined in a pack the Tigers swept it away altogether.They appeared unstoppable until some bright spark attacked the soft targets of fuel trucks and supply depots, literally stopping the Tiger advance in its tracks.In real estate, even the most robust office is heading the way of “the Tiger”, but of the Generals out there don’t even know it yet.

If our office is our business engine,then our people are the fuel that keeps it running.However our fuel reserves are rapidly running low.

Due to a combination of factors including our ageing population, the mining sector boom, training qualificationcost, geographic isolation,traditional recruitment practises, low retention levelsand the career orientation of ‘Generation Y’; the pool of future employees is disappearing. In fact it is evaporating at a rate that the government hasalready recognised will increasinglyundermine the ongoingviability of residential and rural real estate businesses and associated services to the public over the next decade.

Most real estate operators are unaware of this impending staff drought as they have understandably been busy ‘getting on with the business’ which doesn’t include looking at nationwide employment and demographic trends.

The average age of a real estate principal is 55 years old with many in the ‘Baby Boomer’ generation that turn between 60 and 65 years old this year.As a result our sector is already being hit by the challenge facing many Australian businesses of finding skilled workers to replace the disproportionate amount of people retiring.

We presented this and other facts to the State and Federal Government, including references to Australian Bureaus of Statistics reports showing the real estate sector employs over 80,000 Australians and contributes in excess of 0.6% to Australia’s Gross Domestic Product (GDP), and provides services that every Australian utilises and will be substantially impacted by several times in their lifetime. On this basis we were also able to demonstrate that if the growing skill shortage in our industry continues, then the average Australian needing assistance in selling, securing, renting or managing what is commonly their greatest financial asset, will find the range of professionals available to assist them and the subsequent service quality substantially diminished in coming years.

We then presented a business case for having access to funds available under the Government Productivity Places Program (PPP) to financially assist existing employees to develop the skill sets they needed to become the employers of tomorrow and in turn, provide a positive grounding for the continued viability and growth of the real estate profession particularly in hard hit country areas.

In the country,the employer pool is even smaller as in most cases the local population is closer to retirement age, needed qualifications are prohibitively expensive due training being city based, and there isincreasing competition for employees from large employers offering highpaying mining jobs or city based employment.

The South Australian State Government was extremely supportive of our proposal and granted funds that allowed for 90% of Diploma training for country real estate practitioners to be funded under the PPP.This was an exceptional help and saw a large portion of the financial burden associated with developing the current real estate workforce and employers of the future removed, reducing the cost of Diploma qualifications from $7,000 down to $700.This was later followed by a Federal Government grant that allowed PPP funding covering 90% of the cost of Certificate III (Property management), Certificate IV (Sales) and Diploma (Manager/Principal) to be applied across country and metropolitan offices to assist in immediate staff development and ensure a deep and strong pool of professionally skilled for the sector to build on.

The results of these initial projects were so positive that it led to further extensions under the program to accommodate other initiatives, including onsite training at the country centres of Port Lincoln and Port Augusta for local practitioners plus as those from further afield such as Coober Pedy, Roxby Downs, and Whyalla.

We were also granted funds to facilitate a Generation Y scholarship program thatdevelops the skill sets of young administration and sales support staff so they can establish a long-term career and eventually replace retiring real estate professionals and employers.

In the last 2 years, Raine & Horne’s SA members have received in excess of $185,000 in government skill support that is used to actively assist to attract, retain, and encourage people with respect to a long-term real estate career.

Surprisingly, whilst these funds where available to all organisations seeking to develop their workforce, I understand we are the only commercial real estate business to have applied for them.Having now piloted these programs we are now working with our interstate teammates to develop similar models amongst their networks that will we hope benefit from the lessons we have learnt.

Many business owners who arequick to criticise the government for not helping their business, have never asked the government what help is available!The reality is there is a lot of help on offer.All you have to do is pick up the phone and ask – don’t wait for someone else to do it for you! After we had commenced our program, I was approached by training organisations who said some other brand managers had surprising declined offers to partner them in grant applications.So as Brian Tracey always says “if it’s going to be its up to me!”and as I always say “if you don’t ask, you don’t get.”So call your local RTO and see what they can do for you to keep your fuelled for the future.

As a result of the successful use of government funding for industry skill development,Raine & Horne’s program was recentlyselected as a case study that will contribute to a review of approval forcontinuance of PPP funding for all Australian Industry Sectors, including Real Estate.

Kevin Magee is the CEO of Raine & Horne SA.

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