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Published on November 4, 2021

How much is a recruit worth?

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In this installment of our series: the new normal, we are going to look at benchmarks to determine the value a new recruit brings to an office’s bottom line in their first year with the company.

For this analysis, we based these benchmarks on:

  • 800 randomly selected offices from across America
  • The 6,352 agents recruited by these 800 offices
  • Since some agents are recruited into “100% offices”, we included revenue from both the Agent split and the Agent billing
  • We looked at agents who started after 1/1/2018 and finished the first full year before the start of COVID (3/31/2020). The benchmarks represent a full first year of new recruit production.

Question 1: How many agents are offices recruiting?

In our survey, offices are recruiting on average 8 agents per year (8.97).

Important Note: This calculation is per office, not per company. So a company with 5 offices would likely average 40 recruits.

In this analysis, the median and highs and lows are also very interesting. The median number of agents recruited per year is 5 agents per year per office. This means that some out-performing offices are making the averages higher.

recruits average median top performer
per office per year 8 5 88
per office per year 8 5 88

Question 2: What caliber of agents are being recruited?

If we look at agent’s production in their first year, we see a wide variation in production levels. The production levels give us some indication of the agents who will most commonly be recruited. The survey indicates that almost 30% of agents recruited will add nothing to the office’s net income.

1st year production # of agents in survey % of agents in survey
no production in 1st year 1864 29.35%
less than $25,000 AGCI 2660 41.88%
from $25K to $50K AGCI 845 13.30%
from $50K to $100K AGCI 582 9.16%
from $100K to $200K AGCI 290 4.57%
from $200K to $300K AGCI 53 .83%
from $300K to $400K AGCI 27 .43%
from $400K to $500K AGCI 9 .14%
from $500K to $7500K AGCI 13 .20%
from $750K to $1M AGCI 3 .05%
over $1M AGCI 6 .09%

Question 3: What is average production of a new recruit in their first year?

In our survey, we looked at 800 random offices who collectively recruited 6,352 agents. The average production numbers look like this:

AGCI: $42,665
Agent Net: $30,175
Company $: $9,270
Total Sides: 6
List Sides: 2.5
Sell Sides: 3.5
Total Volume: 1,597,375
List Volume: 684,507
Sell Volume: 912,865

Starting with 1st year recruits with the lowest production level (under $25,000 AGCI), offices are averaging 28.87% as company split % (gross profit) and the median company $ to the office on this group of recruits was $2,222 in the 1st year.

Median AGCI Median Agent Net Median Total sides Median Total Volume Median Company $ Median Company %
$8,505 $5,185 1 283,500 $2,222 29.9%

Categorizing 1st year recruits in our survey revealed interesting and consistent trends in the company dollar split percentages as outlined in the tables below:

For 1st year recruits in our survey with AGCI between $25K and $50K: Offices are averaging 26.6% as company split % (gross profit) and the median company $ to the office on this group of recruits was $9,205 in the 1st year.

Median AGCI Median Agent Net Median Total sides Median Total Volume Median Company $ Median Company %
$33,700 $22,206 5 1,284,500 $9,205 19.81%

For 1st year recruits in our survey with AGCI between $50K and $100K: Offices are averaging 21.59% as company split % (gross profit) and the median company $ to the office on this group of recruits was $15,093 in the 1st year.

Median AGCI Median Agent Net Median Total sides Median Total Volume Median Company $ Median Company %
$67,331 $48,667 9.35 2,563,091 $15,093 22.35%

For 1st year recruits in our survey with AGCI between $100K and $200K: Offices are averaging 18.78% as company split % (gross profit) and the median company $ to the office on this group of recruits was $25,017 in the 1st year.

Median AGCI Median Agent Net Median Total sides Median Total Volume Median Company $ Median Company %
$131,681 $98,149 15.5 4,890,142 $25,107 18.80%

Summary

  • Almost 30% of recruits are likely to have no production in their 1st year.
  • 1st year Non-productive agents when combined with recruits that have AGCI under $25K in their 1st year will likely represent over 70% of your recruits.
  • For recruits with AGCI under $25K in their 1st year can be budgeted to each bring $2,222 to the office’s gross Profit.
  • Recruits with higher 1st year AGCI are consistently receiving a larger percentage of the commission. So when reviewing recruits with AGCI between $100K to $200K we see that their production is double that of the recruits with AGCI between $50K to $100K. Yet, the income to the office is only 65% greater.
  • Agents with AGCI under $200K represent 98.26% of recruits in the survey

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