The Net PPP Metric

by | Oct 19, 2023

It’s common for real estate companies to lose 25% of their agents each year.

Retirements, new agent attrition, losses to competitors, and other factors all naturally contribute to a diminishing base of productive agents.

Much can be done on the retention side of the equation to reduce your attrition percentage, but nothing can fully replace the role recruiting plays in replenishing your ranks.

It’s why most brokers track a “net hire” metric. From an agent count perspective, you can quickly tell if you’re growing or shrinking.

But some leaders don’t stop there. They also closely watch their per person productivity (PPP) metric from a recruiting perspective.

The CEO of one of our clients once told me:

In the last week, we broke even on net hires—25 hires and 25 losses.

But the average agent leaving was doing 4 transactions/year, while the average new incoming agent was completing 11 transactions per year.

Since 91% of our business is done by the top 50% of our agents, it’s important that we’re constantly upgrading our agent base to meet our customers’ desire to work with competent agents.

Do some quick math on your hires for the year.

Calculate net hires and then go a step further and calculate your “net PPP metric.”

Quality matters, and you can’t improve what you’re not willing to measure.

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