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Table of Contents
Introduction ........................................................................................................... 1 Setting .................................................................................................................. 1 Organizational Characteristics .......................................................................... 1 Competition ....................................................................................................... 2 Business Strategy ............................................................................................. 2 Problem Analysis .................................................................................................. 3 Current Approach to Training ............................................................................ 3 Gaps in Current Education/Training Process .................................................... 3 Ideal Condition .................................................................................................. 4 Recommendations: New Model ............................................................................ 5 New Model ........................................................................................................ 5 Explanation of New Model ................................................................................ 7 Evaluations ..................................................................................................... 10 Staffing Implications ........................................................................................ 10 Conclusions ........................................................................................................ 11 Rationale for Implementing the RAID Model ................................................... 11 Cost/Benefit Analysis ...................................................................................... 12 Benefits of the New Model .............................................................................. 13 References ......................................................................................................... 14
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Introduction
RE/MAX Advanced Realty is a medium sized real estate brokerage firm headquartered in Columbia, Maryland. The company is going through a period of rapid growth and expansion. At the present time no formalized process exists to address the companys training and educational needs. This paper describes the current training methods being utilized and illustrates a newly created situated instructional design model designed to meet the companys current and future training needs.
Setting
Organizational Characteristics
RE/MAX Advanced was founded in 1990 as a single office real estate brokerage operating as an independently owned franchise within the RE/MAX International organization. Since then they have grown to seven offices and are the largest and most profitable brokerage operating within the RE/MAX Central Atlantic region. Senior management includes the Chief Executive Officer, Senior Vice President, and the Chief Financial Officer, all of whom hold ownership stakes in the company. In addition, there is a Vice President of Operations and a newly hired Vice President of Technology whose position was created to update the companys current technology infrastructure in order to improve operations. The VP of Technology is also responsible for training all personnel in the use of new technologies. Seven managers and nine fulltime administrative personnel staff the companys offices. The agents, who are the primary target population for training and instruction, are all licensed real estate agents in the state of Maryland and work with RE/MAX Advanced Realty under an Independent Contractor Agreement. As such, each agent operates his or her business independently. Each agent pays a monthly management fee of approximately $1200 per month to the brokerage. In general, management treats
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agents as customers rather than as employees. However, under Maryland law it is the brokers responsibility to supervise, train, and oversee each agent.
Competition
Almost all real estate brokerage firms offer some sort of agent training. However, the extent and scope of training varies widely. At a minimum, brokers train agents on company policies and procedures and current changes in law in order for agents to remain in compliance with current laws and regulations. In addition, agents are required to obtain a minimum of 15 credit hours of state mandated continuing education every two years in order to maintain their license to practice. Additionally, agents seek out professional development courses in areas such as marketing, technology, and business planning. Many larger brokerages offer a complete curriculum of continuing education classes and professional development courses for their agents. They also open these classes to the general agent population for the purpose of recruiting. These classes give agents from competing companies a chance to visit a competitor, see their offices, and get to know the staff and management. As individual agents are responsible for obtaining their own continuing education credits and professional development, companies with well-developed educational opportunities are at a competitive Advanced.
Business Strategy
Over the past two years, through a merger and an acquisition of two additional brokerage firms, RE/MAX Advanced Realty has expanded from four offices to seven offices -- with a proposed 8th office set to open in the next 6-12 months. Their agent population has grown from 290 agents to 395 agents. They expect to add another 35 agents with the opening of a second Baltimore office. Their goal is to grow the company to 500 agents by the end of 2013 with a longer-term goal of expanding the company into neighboring Mid-Atlantic States. Senior management understands that developing a high quality educational program will be essential if they are to remain competitive and continue to grow and expand the company.
Problem Analysis
Current Approach to Training
Training is currently done on a very informal ad hoc basis. The office manager and staff train agents informally on policies and procedures when they join the company. New policies and legal updates are introduced at monthly office meetings. These meetings are sparsely attended. Continuing education and professional development classes are coordinated and conducted by individual office managers as the opportunity arises. Many classes are offered by outside speakers who offer their services. These training events are generally conducted by title, lending, and insurance companies seeking to develop business relationships with the companys agents. Office managers also conduct classes on topics they feel will be relevant to the agents. Classes are rarely vetted for content or objectives before they are held. No comprehensive class schedule exists and classes are rarely advertised more than two or three weeks in advance.
company is generally low and the opportunity to invite outside agents is lost. This lack of planning and coordination also prohibits the company from offering continuing education credits for these classes because all continuing education must be vetted and approved by the Maryland Real Estate Commission. This approval process generally takes three to six months. Management believes that the lack of training and educational opportunities for could be a primary cause of the high agent attrition rates. They also believe they are missing a key recruiting opportunity. Management is considering whether a dedicated training department is now needed in order for the company to realize the growth and expansion they hope for in the next several years.
Ideal Condition
The company would first benefit by having a companywide strategy and process for conducting training. By pooling the resources and training opportunities now being undertaken by individual office managers the company would have the ability to: 1. Offer a comprehensive training calendar to the entire agent population both within and outside of the company as appropriate thus increasing attendance. 2. Allow for strategic planning of educational goals and objectives thus remedying the fluctuation in quality of training. 3. Avoid duplication of effort among the individual offices that would allow office managers to maximize their potential as subject matter experts. 4. Afford the opportunity to develop credited continuing education through the MD Real Estate Commission thus preventing agents from seeking out training at competing companies. 5. Plan for and properly vet outside trainers and speakers, which would avoid the current problem of classes which are often merely a sales pitch. 6. Allow for systematic assessment of ongoing training programs.
Figure 1. Original Diamond Instructional Model, (Gustafson & Branch, 2002) First, a large part of the companys process will be in coordinating and designing a companywide curriculum. One of the largest gaps in the companys current training is the lack of attendance at many of the classes offered. This is due primarily to the lack of proper planning in time to advertise the classes internally and externally. Additionally, the agents who have been with the company for a longer period of time
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have experienced the variation in class quality and are leary of signing up for classes offered by the company. A more systematic approach to curriculum planning and scheduling is needed. The company will most likely benefit from a system that places emphasis on both the overall strategy and individual course design. Finally, the companys growth and expansion plans indicate a need for a model the company can grow into rather than one that would become insufficient and obsolete if the company were to grow beyond expectations.
4. Resources Human How many company man-hours will be required to develop and conduct this course?
5. Fiscal
Materials What materials need to be purchased or developed? Facilities Where will the course be conducted?
6. Students To whom will this course appeal? Will it be offered externally as well as internally? What prerequisite skills or knowledge will be required of students?
Based on this analysis the committee will develop a training calendar for the upcoming year. The committee will meet quarterly to evaluate and revise the current plan and meet annually to assess and revise the training goals and objectives and to create the following years plan.
2. Select Format A determination will be made whether the course will be developed and delivered by a person within the company or whether an outside course or instructor will be utilized.
3. Content & Materials In House Previous and potential courses and materials will be reviewed and evaluated. Outside Instructor A copy of the speakers syllabus, objectives, and course outline will be obtained and evaluated. Whenever possible a committee member will observe the instructors class.
4. Production, Modification, and Approval In House Instructional materials will be produced or existing materials modified as needed. Outside Instructor The instructors materials will be approved, disapproved, or a request made for modifications to meet the companys needs and standards.
5. Coordinate Logistics for Implementation The Office Manager in charge of the course will coordinate all logistics for the class. Instructional materials including objectives, outline, and syllabus will be sent to the Real Estate Commission for any course seeking to grant continuing education (CE) credits. The Office Manager will also coordinate follow up and logistics for CE certification and the issuance of certificates.
6. Implement, Evaluate, and Revise The Office Manager and the Training Director will implement the course. Whenever possible a course should be offered to a small group of agents within the company as a pilot test (Rothwell & Kazanas, 1992). Based on the pilot test, the course will be evaluated and revised before being offered to the general agent population. Once the course has been fully implemented it will be evaluated and revised as needed.
Evaluations
Evaluation will be conducted at four levels as described by Rothwell and Kazanas (1992) in order to assess the effectiveness of training.
Staffing Implications
The biggest staffing change necessary would be the creation of a new Training Director position within the company. At initial implementation, the remainder of the
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instructional team would consist of the Office Managers and their administrative staff. Currently, individual office managers each have their own training budget and conduct their own training. Each Office Managers training budget would be consolidated into one company training budget. As the company grows, the training department would most likely expand to include two to three additional team members. The Office Managers will then be able to delegate daily responsibility to the training department, freeing the managers to act as subject matter experts and advisors.
Conclusions
Rationale for Implementing the RAID Model
The recent economic downturn has led to increased competition and a decreasing agent population. Senior management at RE/MAX Advanced Realty recognizes a need to improve the quality and availability of training and professional development in order to retain their current agents and to attract quality agents to the company. By implementing a systematic training model they can improve their current training and better leverage the knowledge and expertise that exists within the company. The RAID model of instructional design will afford the company the opportunity to utilize or improve upon current courses and programs being offered and to deliver them in an organized and effective way. The initial goal of the model is to develop an overall plan and strategy for a companywide program of instruction. As the model is implemented, emphasis will be placed on utilizing or modifying existing courses and materials. As the company grows and the training program matures the emphasis will shift to creating more proprietary inhouse training courses and moving towards delivering more content online. The biggest obstacle to implementing the model will most likely be resistance to change on the part of the Office Managers. They are each accustomed to implementing their individual training efforts. Some manager may perceive the new companywide training model as a threat. They are also unaccustomed to holding outside instructors accountable for the content and structure of courses. It will be the responsibility of senior management and the Training Director to adequately explain the benefits of the new model.
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Cost/Benefit Analysis
According to Keller (2004), when planning a change a cost/benefit analysis is often used to predict if the results of the change will be worth the resources invested. RE/MAX Advanced has always viewed training as a necessary expense and not as a profit center. Managements goal has always been to minimize training expenses. Costs to implement the model should be minimal and the training produced using the new RAID model should prove to be profitable for the company in the long term.
Cost
$85,000 (salary & benefits) $0 $0 $0 $0
Source
Agent retention and recruits Office managers From training & recruiting budgets of individual offices Training rooms at offices VP of Technology and team currently support training
The largest upfront cost to implementing a new instructional model will be the creation of the Training Director position. This cost should be easily offset if the objectives of the training program are met. Within the last twelve months, 32 agents left the company with many of them discussing the lack of quality training in their exit interviews. This agent attrition equals a $460,800 loss to the company for a 12-month period. If only 3 of these agents had been retained while another 3 new agents had been recruited through better training opportunities, the cost of hiring an instructional designer would have been more than recouped. These are very conservative estimates and the company will most likely see a profit from implementing a systematic training model. Once the training program has been implemented, a full cost/benefit analysis should be undertaken to determine the economic effects of implementation of the RAID model. The company can also generate additional revenue by charging agents for CE credits and by continuing to solicit affiliate businesses for sponsorships of training events.
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Company Benefits Increased agent satisfaction assists in agent retention. Offering quality professional development and CE credit courses is a cost effective recruiting opportunity. Better-trained agents require less support from management and staff and pose less of a legal liability to the company. By working as a team, Office Managers will spend less time and energy on developing and coordinating training. Potential to create an additional income stream.
In the current competitive market, a brokerage offering a comprehensive training and continuing education program stands the best chance of attracting and retaining the best agents. The RAID model offers RE/MAX Advanced Realty a systematic approach for delivering quality training and education to the local Realtor population in a manner that can over time turn an ongoing expense into a profit center for the company.
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References
Gustafson, K., & Branch, R. (2002). Survey of Instructional Development Models. Syracuse: Syracuse University. Keller, J. (2004). How to estimate the cost-benefit of training: Calculating return on investment. Florida State University. Tallahassee: John Keller Associates. Rothwell, W. J., & Kazanas, H. (1992). Mastering the instructional design process: A systematic approach. San Francisco: Jossey-Bass Publisher.
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